TSMC To Produce Advanced FSD Chips Using 4nm – 5nm Technology As Tesla Prepares For Unsupervised FSD And Robotaxi Launch

Please note that this article does not constitute investment advice. The author does not hold shares in any of the companies discussed herein.

Current Trends Affecting Tesla’s Stock Performance

Tesla’s stock has been on a downward trend for more than a month, primarily influenced by Elon Musk’s intensified political engagements and a noticeable decline in sales, especially within the European market. Although a dip in sales was anticipated as the company phases out the older Model Y in favor of the new Juniper model, the recent, significant drop in sales momentum has led some analysts to attribute this to the increased politicization of the brand and a subsequent negative impact on its public image. Nonetheless, Tesla remains steadfast in its operations.

REPORTEDLY, TESLA TAPS TSMC FOR NEW FSD CHIPS IN CHINA$TSLA‘s Full Self-Driving is rolling out in mainland China, and industry sources suggest $TSM has secured orders for Tesla’s new FSD chips, built on the 4nm-5nm process. Meanwhile, Samsung is still supporting the older FSD… pic.twitter.com/77wVoZ2PI3

— Wall St Engine (@wallstengine) February 28, 2025

Innovations in Tesla’s Technology

Recent reports from MoneyUDN reveal that Tesla has partnered with TSMC to produce its latest Full Self-Driving (FSD) chips utilizing cutting-edge 3nm to 4nm technology, while Samsung will continue to manufacture the existing chip versions.

Additionally, the capabilities of Tesla’s Dojo supercomputer, designed for training its neural networks, currently utilize chips produced via TSMC’s 7nm technology.

Latest Software Enhancements and Future Ambitions

In conjunction with these hardware advancements, Tesla is launching a new software update in China intended to enhance driver assistance for city driving. Features such as automatic lane changes, traffic sign recognition, and improved local maps will be available; however, users must have HW4 vehicles and an upgraded Autopilot subscription to access these functionalities.

Looking ahead, Tesla aims to introduce an unsupervised FSD service by June 2025, starting in Austin, Texas, with plans to expand this service to California shortly thereafter. According to Bloomberg, the company is actively seeking regulatory approval to implement a ride-hailing platform in the Golden State.

NEWS: Morgan Stanley analyst Adam Jonas said he was left “speechless”after he spent an hour this week being driven in a robotaxi in London.

Adam rode in a development vehicle from Wayve that used 7 cameras, no radar, no LIDAR, no HD maps and no labeling. It was all end-to-end… pic.twitter.com/zz28Ni3f1H

— Sawyer Merritt (@SawyerMerritt) February 27, 2025

Competitive Landscape in Autonomous Vehicle Technology

It is crucial to recognize Tesla’s increasing competition in the autonomous vehicle sector. While proponents of Tesla often brush off concerns regarding Waymo’s reliance on an extensive array of sensors, the emergence of Wayve’s robotaxi service—equipped with seven cameras and minimal additional technology—poses a more significant challenge than initially perceived.

A recent analysis from Needham noted that Tesla’s future growth potential, especially regarding FSD systems, robotaxis, and the Optimus humanoid robot, may already be overvalued. According to their assessment, Tesla currently operates from a “trailing position”in the sectors of autonomous ridesharing and robotics, highlighting the need for vigilance amidst fierce competition.

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