Elon Musk is making bold moves in the tech industry, with his latest focus on developing a domestic chip supply chain in the United States. His plans, initially viewed as ambitious, are now materializing as Tesla starts laying the groundwork for a robust chip infrastructure. Musk’s vision is to revolutionize the semiconductor landscape, much like he has done with automotive and aerospace sectors.
Building a Texas Hub for Chip Manufacturing
Elon Musk has decided to take America’s chip industry into his own hands. At a Tesla shareholders event, he disclosed plans for a ‘TeraFab’ facility, aiming to produce 100,000 wafers each month. Reports suggest that development for this manufacturing ecosystem has already begun. The FOPLP (Fan-Out Panel-Level Packaging) plant in Texas has reached the equipment delivery phase, with volume production expected by late third quarter 2026.
Elon Musk, owner of SpaceX and Tesla Inc., is making significant strides to develop a comprehensive semiconductor manufacturing supply chain in the US. Sources indicate that the fan-out panel-level packaging (FOPLP) plant in Texas has reached the equipment delivery phase and aims to commence volume production by late third quarter 2026.
– DigiTimes
Tesla plans to address a significant bottleneck in the US supply chain by constructing an advanced chip packaging facility in Texas, utilizing FOPLP technology. SpaceX is reportedly overseeing the facility’s development, which will initially produce components for Starlink, such as RF front-end chips. This technology allows Starlink to integrate RF chips with power ICs in a single module.
Strategic Aims and Future Collaborations
Reports indicate that equipment installation has commenced at the packaging facility, with limited production anticipated in Q3 2026. Initial production is expected to yield about 2,000 units monthly. Alongside the FOPLP facility, a PCB factory in Texas further indicates Musk’s commitment to building an independent chip supply chain, making ‘TeraFab’ a tangible long-term goal.
While Musk aims to establish chip fabs in the US, his goal isn’t solely to compete with giants like TSMC. It’s also to ensure the US has alternatives should geopolitical tensions arise, particularly concerning Taiwan. Moreover, Tesla’s collaboration with Intel on advanced packaging suggests a potential formal partnership may be on the horizon.