Intel is set to collaborate with SpaceX and Tesla to establish a new semiconductor factory in Texas, though the extent of its involvement remains unspecified.
“Our expertise in designing, fabricating, and packaging ultra-high-performance chips at scale will support Terafab’s goal of producing 1 TW/year of compute for future AI and robotics advancements,” Intel stated in a corporate post on X. Further details from Intel are pending.
In March, Elon Musk announced a partnership between SpaceX and Tesla to create chips for AI computing, satellites, including a prospective space data center, and to facilitate the development of autonomous Tesla vehicles and robots.
Constructing a chip fab is notoriously challenging and costly, typically requiring several years and over $20 billion to establish a facility equipped with a vast clean room for precision machinery to shape silicon. There were doubts about the capability of SpaceX and Tesla, lacking sector experience, to effectively execute the project.
The picture is clearer now: Intel will undertake the task. The company has been actively seeking major clients to bolster its foundry business and now counts two. However, the anticipated Terafab project, which investors might have expected to feature a novel approach inspired by SpaceX and Tesla’s engineering methods, may not materialize as imagined.
Formerly the top U.S. silicon producer, Intel has witnessed competitors Nvidia and AMD surpass it in advanced processor development, adopting a “fabless” model where chip design is outsourced for manufacturing. The announcement pushed Intel’s stock up by over 3%, trading at $52.28, about 2.9% higher than its opening price, by 2 pm ET.
Intel and SpaceX did not provide comments in time for publication.