More on Elon and chips.
From MarketWatch, November 19:
Elon Musk says all of Tesla depends on one tiny — but very expensive — proposition
All of Tesla Inc. depends on making a tiny silicon chip that will power everything from driverless technology to robots, Chief Executive Elon Musk said last week. But getting enough of those semiconductors will be an expensive task.
To start, Tesla is set to pay two companies — Taiwan Semiconductor Manufacturing Co. Ltd. TSM and Samsung Electronics Co.— to make its next-generation AI5 chips at four separate sites, two of which are in the U.S. Neither TSMC nor Tesla have said how much the chip maker will be paid for its work.Samsung has a $16.5 billion deal that lasts from July through the end of 2033 to supply chips to Tesla. However, Musk has said that figure is “just the bare minimum” of what Tesla could pay Samsung for its chips.
Tesla initially planned to have Samsung and TSMC alternate making the different generations of Tesla’s hardware, but it now plans to have both companies make the AI5. That’s somewhat uncommon, since it will likely mean spending additional funds to adjust the chip’s design to match each manufacturers’ respective equipment.
“If you’ve designed a chip for TSMC, and now you want to bring it to Intel, it’s not just, you know, ‘Here, take it,’” explained Jack Gold, a technology analyst and the president of J.Gold Associates, a consulting firm. Rather it’s about “what do I have to do to make it compatible with your design processes and manufacturing processes?” Gold added.
Some of Tesla’s costs will likely be diminished because the company has streamlined the AI5 chip to match its needs. Musk has said Tesla has a “long list” of components it took out of the AI5 chip, which he said will improve performance and allow Tesla to fit the chip on a “half reticle,” or half the size of chip designs from Nvidia Corp. NVDA and Advanced Micro Devices AMD.
Generally, smaller chips also translate to a higher yield per silicon wafer used in the lengthy chipmaking process, because more potential products can fit on each wafer used. Simplifying the chips should also make it easier to adjust the design to match multiple chipmakers’ technology, Gold said.
“We’re going for radical simplicity,” Musk said in October. “The net effect is that I think AI5 will be the best performance per watt, maybe by a factor of two or three, and best performance per dollar for AI, maybe by a factor of 10” compared to rival chips....
....MUCH MORE
This month:
Nov. 7 - "Tesla teases new AI5 chip that will revolutionize self-driving" (TSLA)
Nov. 16 - "Elon Musk's secret fab plan: new US chip plant targets 2026 ramp"
Nov. 24 - "Tesla Stock Pops as Musk Talks Up Its AI Chips Business. Why It’s a Big Deal." (TSLA)
And from 2024 - Morgan Stanley Analyst Adam Jonas Writes A Love Letter To Tesla (TSLA)
A confession of bullish bias up front, from April 24's "Tesla Q1 2024 Earnings Call Transcript (TSLA)":
In pre-market action the stock is up $17.47 (+12.07%) at $162.15.
Below are the words that are adding billions ($50+) to the company's valuation.
Personally I think Musk is going to pull it off, but that's just me—perhaps informed by posting on the company and its stock since before the June 2010 share flotation (which, adjusted for the 5:1 and 3:1 stock splits gives a $1.133 IPO price)—however, there are plenty of other opinions to choose from if one doesn't care for that one....
