Intel signs on to Elon Musk’s Terafab chips project

Intel will join SpaceX and Tesla in an effort to build a new U.S. semiconductor factory in Texas, although the extent of its contributions is unclear.

“Our ability to design, manufacture and package ultra-high-performance chips at scale will help accelerate Terafab’s goal of producing 1 TW/year of computing power to power future developments in AI and robotics,” Intel said. said in a company post on X. Intel has not shared any more information.

Elon Musk announced in March a partnership between the two technology companies he leads to develop chips for AI computers, satellites, including SpaceX’s space data center, and to support the possibility of autonomous Tesla vehicles and robots.

However, building a chip factory is one of the most difficult and expensive business infrastructure projects out there, typically requiring years of time and more than $20 billion to create a facility with a massive cleanroom for thousands of high-precision silicon-cutting machines. It was not clear how SpaceX and Tesla, two companies with no industry experience, could work together to efficiently execute the project.

Now we have a better idea: Intel will do it. The company was looking for large anchor customers to support its foundry operations, and now it has two. But if investors thought Terafab would be a greenfield approach based on SpaceX and Tesla’s unique approach to engineering, it might not work out.

Intel, once the largest U.S. silicon maker, has seen rivals Nvidia and AMD take the lead in developing advanced processors and adopt the “fabless” business model in which chip designers outsource the production of their semiconductors. Shares of Intel rose more than 3% after today’s news. It was trading at $52.28, about 2.9% higher than the opening price, as of 2:00 PM ET.

Intel and SpaceX did not respond to requests for comment as of press time.