On Sunday, TF International Securities analyst Ming-Chi Kuo said Elon Musk's remarks confirm that Tesla Inc.'s (NASDAQ:TSLA) move to build its own semiconductor production plants isn't just an ambition — it's a calculated step toward full control of its AI future.
Musk's Chip Push Aligns With Analyst's Predictions
Kuo said on X, formerly Twitter, that Musk's comments at Tesla's shareholder meeting validated his earlier analysis about the automaker's semiconductor roadmap.
At the meeting, Musk said, "I'm hopeful that we can within less than a year of AI5 starting production, we can actually transition in the same fab to AI6 and double all of the performance metrics."
Kuo noted that while many doubted Tesla could move from the AI5 to AI6 chip in just a year, Musk's statement supports that aggressive timeline.
Why Tesla Wants To Build Its Own Chip Plants
According to Kuo, Musk's desire to build Tesla's own fabs goes beyond fears of chip shortages.
While Musk warned that even in the best-case scenario, chip production from "our suppliers" is still not enough, Kuo said supply isn't the real issue — at least not with Taiwan Semiconductor Manufacturing Co. (NYSE:TSM).
He cited TSMC CEO CC Wei's past remark to Musk: "If you're willing to pay, there will be chips." Instead, Kuo believes Musk's motivation stems from three factors — geopolitical risks, R&D flexibility and vertical integration.
Musk is clearly aware of the concentration of advanced chip capacity in Taiwan, Kuo said, adding that even by 2030, only about 10% of TSMC's advanced packaging capacity will be in the U.S.
Gene Munster Say Breaking From Nvidia Won't Be Easy
At the shareholder meeting, Musk declared he's "super hardcore on chips right now," boasting that Tesla's AI5 chip would rival Nvidia Corporation's (NASDAQ:NVDA) new Blackwell chip while using a third of the power and costing less than 10% as much.
However, Deepwater Asset Management's Gene Munster cautioned that moving away from Nvidia is easier said than done, warning that Tesla has "better places" to spend $20 billion than building chip fabs.
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