Intel is set to collaborate with SpaceX and Tesla in an initiative to construct a new U.S. semiconductor fabrication plant in Texas, though the precise extent of its involvement remains undefined.
“Our ability to design, fabricate, and package ultra-high-performance chips at scale will help accelerate Terafab’s aim to produce 1 TW/year of compute to power future advances in AI and robotics,” Intel stated in a corporate post on X (formerly Twitter). The company has not provided further details regarding its role.
In March, Elon Musk unveiled a partnership between the two technology companies he leads, SpaceX and Tesla, to develop chips for diverse applications. These include AI compute, satellites—such as SpaceX’s proposed space data center—and to support the capabilities of autonomous Tesla vehicles and advanced robotics.
However, establishing a semiconductor fabrication plant represents one of the most challenging and capital-intensive corporate infrastructure projects globally. Such endeavors typically demand years of development and investments exceeding $20 billion to create a facility housing vast clean rooms for thousands of ultra-precise machines designed to etch silicon. Previously, it raised questions about how SpaceX and Tesla, lacking prior experience in the sector, would efficiently execute such a complex undertaking.
The current development offers significant clarity: Intel will assume a pivotal role. The company has been actively seeking substantial anchor customers to bolster its foundry business, and this collaboration provides two such key partners. Nevertheless, if investors anticipated Terafab to be an entirely greenfield approach, driven solely by SpaceX and Tesla’s distinctive engineering methodologies, this might not materialize as anticipated.
Historically a dominant force in U.S. silicon production, Intel has more recently seen rivals like Nvidia and AMD surpass it in developing advanced processors and embrace the “fabless” business model, where chip designers outsource manufacturing. Following the news, Intel's stock experienced an uptick of over 3% today, trading at $52.28 by 2 PM ET, approximately 2.9% above its opening bell price.
Intel and SpaceX had not responded to requests for comment by the time of publication.
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