TSMC.

Anyone ever wonder about the possibility of Tesla/Elon entering into semiconductor manufacturing?

I can't imagine this thought hasn't crossed some minds in their boardroom.

Even Apple doesn't do the actual manufacturing. I'm not sure adding another product line with crazy difficult production processes would be a good idea for Tesla.

But Tesla likes to bring production in-house, whereas Apple outsources everything possible. It would not surprise me in the slightest if Tesla is looking to build a fab at some point in the future

I don't think it's profitable to build a leading edge chip fab with only yourself as the customer. At least, nobody else is doing it. Even with Intel's huge sales volumes they are still trying to bring in other customers to use their fabs to share the cost.

So I think getting in the fab business for Tesla would mean trying to be a direct competitor with TSMC, Intel, etc. by making chips for a large number of customers.

That seems way down the list of Tesla's priorities and best uses of dropping hundreds of billions of dollars.

This was my initial reaction as well, but considering the scale of Tesla I thought I should validate it.

Intel reportedly produces roughly 10 million wafers per year [1]. Roughly 70 million new cars are sold per year [2], with Tesla currently accounting for 0.5 million of those [3] with roughly 50% YOY growth numbers and a plan on continuing those for multiple years [4].

Cars/wafer is a pretty unclear number, at 5 Tesla is 1% of Intel's market (today), at 25 0.2% of Intel's market. It will take quite awhile for Tesla to hit intel's scale - but the automotive market as a whole might actually be pretty close to it if all new cars start including giant computers.

[1] 884k/month * 12 months/year, from https://www.eenewseurope.com/news/top-five-chip-makers-domin...

[2] https://www.statista.com/statistics/200002/international-car...

[3] https://backlinko.com/tesla-stats (or see [4] but then you have to add up quarters yourself)

[4] https://tesla-cdn.thron.com/static/ZBOUYO_TSLA_Q2_2021_Updat...

Interesting to think about, but I still don't see it making business sense for Tesla, even if they follow some crazy optimistic curve and take half the car market.

There are already multiple competing companies whose sole job is to make the best fabs at high production rates.

Tesla doesn't even make most of their batteries in-house, which is way more core to their business of EV manufacturing. They partner with Panasonic, LG, CATL, etc. because they are in the business of building out manufacturing capacity for battery cells.

Musk's companies win(usually, not always) by finding niches with sleepy competition and doing great engineering work there.

The semi industry is really far from that.

Surely you mean chip design and not manufacturing.

They already do chip design.

You could s/chip/battery/ and make the same incredulous statement 5 years ago

Or upholstery, or charging infrastructure, or casting equipment, etc.

Tesla had the capital to go as vertical as they want.

Tesla doesn't makes their own casting equipment (yet?). They do custom order the largest presses built by Idra Group in Italy (owned by a Chinese company) though [1].

[1] https://en.wikipedia.org/wiki/Giga_Press

No - I mean manufacturing. At a certain level of demand it could make sense, especially if the classes of devices you seek to produce are heterogeneous in their engineering - aerospace vs phone vs car.

The other advantage with vertical integration through the manufacturing piece is turn around time on new designs. It is a lot faster/easier to spin new test lots for speculative designs when everyone works for the same org.

They're apparently already in chip design, so surely he means manufacturing as the potential new business line?