Elon Musk's recent statements around building up a chip supply were seen as 'ambitious' by analysts out there, but it appears that Tesla already has efforts in place to fulfill the vision of the company's CEO.
Musk Has Already Started Work on an Advanced Packaging & PCB Facility in Texas, Laying the Foundation For a Robust Chip Supply
For those unaware, Musk has apparently decided to take America's chip industry into his own hands. After revolutionizing the domestic automotive and launch service provider sectors, the billionaire now plans to build a sufficient chip supply chain in the US. Back at Tesla's shareholders event, Elon Musk revealed the intentions to create a Tesla 'TeraFab', which would be responsible for the production of 100,000 wafers per month, and now, based on a report by DigiTimes, it is claimed that Elon has already started development around having a manufacturing ecosystem.
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
It appears that Tesla plans to address a significant bottleneck in the US supply chain by building an advanced chip packaging facility in Texas, which will utilize the FOPLP (Fan-Out Panel-Level Packaging) technology. It is claimed that SpaceX is currently managing the development of the facility, and initially, it will be responsible for producing Starlink components, such as RF front-end chips. By using FOPLP, Starlink can essentially integrate RF chips with power ICs in a single, tightly integrated module, which is why the technology is essential for the firm.
It is claimed that equipment installation in the packaging facility has already begun, with limited production expected to commence in Q3 2026. It is reported that the monthly output during the initial production timeline is expected to be around 2,000 units. Apart from a FOPLP facility, Musk already has a PCB factory operational in Texas, which shows that the ambition around creating an independent chip supply chain for America is definitely being implemented, which also indicates that Project 'TeraFab' is a real long-term possibility.
In a previous report, we discussed why Elon is eager to build chip fabs in the US, as competing with TSMC isn't his only goal; instead, the supply chain will enable America to have an alternative in case geopolitical tensions rise in Taiwan. Similarly, it is claimed that Tesla's collaboration with Intel is close on several fronts, such as advanced packaging, which yet again indicates that both companies could enter into a formal partnership.
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