Intel is set to partner with SpaceX and Tesla on establishing a new semiconductor manufacturing facility in Texas, though the precise extent of its involvement is currently undefined.
In a corporate post on X, Intel stated, “Our capacity to design, fabricate, and package ultra-high-performance chips at scale will contribute to accelerating Terafab’s objective of generating 1 TW/year of compute, thereby fueling future breakthroughs in AI and robotics.” Intel has not provided further details.
In March, Elon Musk revealed a collaboration between his two tech ventures to create chips for AI computing, satellites—including SpaceX’s proposed space data center—and to enable future autonomous Tesla vehicles and robots.
Nevertheless, constructing a chip fabrication plant represents one of the most challenging and costly corporate infrastructure undertakings, usually demanding years and over $20 billion to establish a facility featuring a massive clean room for thousands of highly precise machines to process silicon. The efficient execution of such a project by SpaceX and Tesla, two companies without prior industry experience, was not immediately apparent.
Now, the strategy is clearer: Intel will undertake the manufacturing. The company has been actively seeking substantial anchor clients for its foundry operations, and it has now secured two. However, any investor expectation that Terafab would adopt a novel, greenfield engineering approach influenced by SpaceX and Tesla’s distinct methods may not materialize.
Intel, formerly the dominant U.S. silicon producer, has witnessed competitors Nvidia and AMD emerge as leaders in advanced processor development, embracing a “fabless” business model where semiconductor manufacturing is outsourced by chip designers. Following today’s announcement, Intel’s stock climbed over 3%, trading at $52.28, approximately 2.9% above its opening price, by 2 pm ET.
Neither Intel nor SpaceX had responded to inquiries for comment by the time of publication.