Tesla and SpaceX CEO Elon Musk said the two companies plan to build and test roughly 10 chip designs each year at the Terafab research and development wafer fabrication facility located within the Texas Gigafactory.

Musk stated that traditionally, a major chip takes up to two years from development to mass production, and this goal is intended to dramatically accelerate the chip development process.

Musk said the two companies hope to challenge the risk-averse mindset that is widespread in the chip manufacturing industry. "I think the original intention behind Tesla and SpaceX building this wafer fab is to attempt some high-risk, high-reward projects," he said in an interview.

He emphasized that 10 designs per year refers to accelerating the chip manufacturing and testing iteration cycle, not putting 10 different chips into large-scale mass production each year. "We want to complete approximately 10 chip designs per year," he added, noting that two years from design start to mass production for a flagship chip is already considered relatively fast in the industry.

The planned R&D wafer fab at the Texas Gigafactory will integrate chip manufacturing, testing, packaging, and photolithography mask production all within the same building. Musk said the team can complete chip testing, produce new versions of photolithography masks, and iterate new versions without interrupting the development cycle.

"When you try many different technology paths in large numbers, many approaches will fail." But a faster testing mechanism can accelerate overall R&D progress.

Musk admitted, "I have absolutely no idea how to make chips, but we will figure it out." He said achieving this ambitious vision could take several years: "It may take many years, but in the long term, I am very confident we can do it."

Musk called this R&D closed loop a powerful tool: "Within the same building, complete full-machine manufacturing, testing, then produce new masks, tape out new chip versions, maximizing the speed of this iteration cycle."

He explained that Tesla Motors (TSLA) will initially use off-the-shelf equipment, modify equipment to boost capacity, and later develop customized equipment for production bottlenecks.

The R&D wafer fab's goal of "10 designs per year" is not the same as the overall Terafab plan. Musk previously explained that the overall project includes two factories, each responsible for mass-producing one chip. The entire large project aims to supply chips for Tesla vehicles, the Optimus humanoid robot, and space AI data centers.