Elon Musk says he does not know how to make microchips, but backs a massive chip-factory plan

Elon Musk has acknowledged that he does not personally know how to manufacture microchips, even as he supports plans for a chip factory valued at $15 billion, according to a business report published through Yahoo Finance.

The comments underscore a familiar challenge in the semiconductor industry, where the work is highly specialized and capital intensive, involving equipment, clean-room processes, yields, and supply-chain steps that typically take years to scale. Microchips, or semiconductors, are the core computing and control components inside vehicles, running everything from battery management to driver-assistance systems.

While Musk’s remarks focus on know-how, the reported centerpiece is the scale of the effort, with the proposed facility described as a $15 billion project. That figure, if accurate and finalized, would place the undertaking among the largest industrial bets on chip capacity in the private sector, far exceeding what most auto suppliers can directly fund on their own.

Tesla, like other automakers, has faced the industry’s chip shortage era and the ongoing risk that complex electronics schedules can be disrupted by component bottlenecks. The strategic appeal of moving closer to chip supply, whether through dedicated production or tighter integration with chip design, is that it can reduce dependence on external manufacturing timelines.

Still, building chips is not the same as building cars. Even companies with deep engineering talent can struggle with semiconductor manufacturing, where small process changes can have outsized effects on performance and defect rates. Musk’s admission, as reported, brings that friction into the open and sets a high bar for execution.

The report does not, in the information available here, provide additional specifics on how Tesla intends to handle manufacturing expertise, partner with established chip equipment and process teams, or the timetable and location details for the proposed plant. It also does not clarify whether the $15 billion figure is an announced budget, a conceptual estimate, or a fully approved capital plan.

For Tesla and the broader auto sector, the main market question is whether the move is primarily about securing supply and controlling designs, or about creating a full manufacturing capability that competes head-on with leading chipmakers. The next disclosures to watch would be any formal project approvals, partnership announcements, permitting and site selection, and guidance on when chips would be available for vehicle production.