Musk warns of chip shortage in 3–4 years with only Samsung and TSMC, calls for U.S. semiconductor production

[The Financial News] Elon Musk, CEO of Tesla, has once again stressed the need to build an in-house semiconductor manufacturing facility in the United States, citing geopolitical risks. He argued that relying solely on the global supply chain will not be enough to withstand the risks expected over the next several years.
On Tesla's earnings conference call held on the 28th (local time), Musk said, "Even if we assume a best-case scenario for production by our major suppliers, including strategic partners such as Samsung Electronics, TSMC, and Micron Technology, it still will not be sufficient." He went on, "To remove constraints that are highly likely to emerge within three to four years, we need to build a Tesla TeraFab factory."
The TeraFab Musk mentioned is envisioned as a large-scale semiconductor facility in the United States that would integrate logic, memory, and packaging. "This is extremely important for protecting the company from geopolitical risks," he emphasized, adding, "People may be underestimating geopolitical risks, which could become a major factor within a few years."
Musk repeatedly raised concerns about semiconductor supply risks in the context of competition in artificial intelligence (AI) technology as well. "Tesla's AI is extremely efficient in terms of memory usage, but if we look three years ahead, there is always a risk that the chips we are counting on will not arrive on time," he explained. "Without AI chips, Optimus becomes as useless as the Tin Man in 'The Wizard of Oz.' For Tesla, this is a matter of survival."
He also warned, "Countless companies are complacent about geopolitical risks," and added, "We will prepare so that we can continue producing batteries, robots, and AI chips under any circumstances." However, he did not specify particular risk scenarios or regions.
Meanwhile, Tesla plans to halt production of the Tesla Model S and Tesla Model X and convert that production space at the Tesla Fremont Factory in the State of California into a dedicated plant for Optimus robots. Musk's long-term goal is to produce 1 million Optimus units per year.
According to Tesla's fourth-quarter 2025 earnings report released the same day, revenue came to $24.9 billion, down 3% from a year earlier, or about 35.58 trillion won. Operating profit for the period fell 11% to $1.4 billion. Tesla projected that capital expenditures this year will exceed $20 billion.

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km@fnnews.com Kim Kyung-min Reporter