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 scope of its contributions are unclear.

“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 said in a corporate post on X. Intel hasn’t shared any more information.

Elon Musk announced in March a team-up between the two tech companies he leads to develop chips for AI compute, satellites, and SpaceX’s mooted space data center and to support the possibility of autonomous Tesla vehicles and robots.

However, building a chip fab is one of the most difficult and expensive corporate infrastructure projects out there, typically requiring years of time and more than $20 billion to create a facility with a huge clean room for thousands of ultra-precise machines to carve silicon. It wasn’t obvious how SpaceX and Tesla, two companies with no experience in the sector, could team up to execute the project efficiently.

Now we have a better idea: Intel will do it. The company has been hunting for large anchor customers to support its foundry business, and now it has two. Still, if investors thought that Terafab would be a greenfield approach based on SpaceX’s and Tesla’s unique approach to engineering, that may not play out.

Once the leading U.S. silicon producer, Intel has seen rivals Nvidia and AMD take the lead in developing advanced processors and adopt the “fabless” business model where chip designers outsource the manufacturing of their semiconductors. Intel’s stock rose more than 3% on the news today. It was trading at $52.28, about 2.9% higher than its opening bell price, at 2 p.m. ET.

Intel declined to comment on the partnership, while SpaceX didn’t respond to TechCrunch’s query.