Jensen Huang Challenges Elon Musk on Ambitious Chip Fab Plans

Nvidia Corporation CEO Jensen Huang has expressed skepticism regarding Elon Musk‘s plans to establish a large-scale chip fabrication facility for Tesla Inc., emphasizing the significant challenges associated with semiconductor manufacturing. During a recent shareholder meeting, Musk announced his intention to create an in-house chip fab capable of producing up to one million chips monthly. These chips are intended to support Tesla’s expanding artificial intelligence initiatives, specifically for the next-generation AI5 processors and the Dojo supercomputers.

Huang’s comments came during his visit to Taiwan this week, where he highlighted the complexities involved in constructing and operating a state-of-the-art chip manufacturing plant. He stated, “Building an advanced chip fab is ‘extremely hard,'” pointing out that it requires not just physical construction but also a deep understanding of engineering, science, and the nuanced skills that enable TSMC to maintain its position as the world’s leading semiconductor foundry.

Musk’s ambition to diversify Tesla’s supply chain aligns with his broader strategy of reducing dependency on external suppliers. At the shareholder meeting, he acknowledged Tesla’s existing partnerships with TSMC and Samsung Electronics, hinting at potential discussions with Intel Corp regarding future collaborations.

As a key player in the semiconductor industry, TSMC closed at $286.50 on the stock market, reflecting a slight decline of 0.94%. However, after-hours trading saw an increase of 0.72%, bringing the stock price to $288.57. Analysts from Benzinga’s Edge Stock Rankings have noted that TSMC continues to show a strong upward trajectory in both short and long-term forecasts.

Musk’s announcement follows the recent approval of his substantial $1 trillion pay package, which has drawn attention and debate among investors and industry watchers. The proposed chip fab represents a significant shift in Tesla’s operational strategy, potentially positioning the company to gain more control over its technological advancements.

In summary, while Musk’s plans for an in-house fabrication facility signal an ambitious direction for Tesla, Huang’s cautionary remarks serve as a reminder of the formidable challenges inherent in semiconductor manufacturing, underscoring the expertise and resources required to succeed in this complex field.