Musk is betting that his experience building cars and rockets will help him take on the world’s top chipmakers. How hard could it be?
By Jonathan Small | edited by Jessica Thomas | Oct 12, 2026
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Elon Musk has a plan to build one of the world’s most ambitious microchip factories. There’s just one minor issue. “I have no idea how to make microchips,” Musk told customers and investors Saturday during the X Takeover event, according to Business Standard, adding “we’ll figure it out.”
Musk is preparing to build a massive semiconductor factory called Terafab in Texas, a venture involving Tesla and SpaceX, with Intel participating in the project. The factory calls for an initial investment exceeding $15 billion and is expected to create 3,000 jobs.
Musk believes his companies can eventually outperform established chipmakers like TSMC, Samsung and Intel. “We’ll figure out how to make chips better than anyone,” he said, acknowledging that the process could take several years.
His strategy involves starting with conventional chipmaking equipment, then modifying it to improve production speed. Musk said his companies’ experience developing customized manufacturing machinery could give him an advantage.
Still, he called semiconductor manufacturing “one of the hardest things to do in the world.”
Elon Musk has a plan to build one of the world’s most ambitious microchip factories. There’s just one minor issue. “I have no idea how to make microchips,” Musk told customers and investors Saturday during the X Takeover event, according to Business Standard, adding “we’ll figure it out.”
Musk is preparing to build a massive semiconductor factory called Terafab in Texas, a venture involving Tesla and SpaceX, with Intel participating in the project. The factory calls for an initial investment exceeding $15 billion and is expected to create 3,000 jobs.
Musk believes his companies can eventually outperform established chipmakers like TSMC, Samsung and Intel. “We’ll figure out how to make chips better than anyone,” he said, acknowledging that the process could take several years.
His strategy involves starting with conventional chipmaking equipment, then modifying it to improve production speed. Musk said his companies’ experience developing customized manufacturing machinery could give him an advantage.
Still, he called semiconductor manufacturing “one of the hardest things to do in the world.”
Entrepreneur Staff
Jonathan Small is a bestselling author, journalist, producer, and podcast host. For 25 years, he... Read more