February 2, 2026 /SemiMedia/ — Tesla chief executive Elon Musk said the company is considering a large-scale semiconductor manufacturing plan known as “TeraFab”, as it looks to reduce dependence on external chip suppliers and secure access to advanced semiconductors.

Musk made the comments during Tesla’s earnings call on Jan. 29, describing TeraFab as a broad manufacturing concept rather than a single wafer fab. The plan could cover logic chips, memory production and advanced packaging, and may include fabrication capabilities at the 2-nanometre process node.

Tesla expects capital expenditure in 2026 to exceed $20 billion, mainly for new factories and related infrastructure. While the company has not disclosed how much would be allocated to semiconductor manufacturing, the scale of investment suggests chip production could become a strategic focus.

Musk has previously said that if Tesla were to build its own wafer fab, initial capacity could reach around 100,000 wafers per month, with long-term expansion potentially reaching 1 million wafers per month. By comparison, TSMC’s annual wafer output in 2024 was estimated at about 17 million wafers.