Intel joins Elon Musk’s Terafab chips initiative

 Intel is set to join SpaceX and Tesla in a new effort to develop a semiconductor manufacturing facility in Texas. However, the exact scope of Intel’s role has not yet been detailed.

In a statement shared on X, Intel said its expertise would contribute to the project’s broader ambitions. “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,” the company noted. Beyond that statement, Intel has not disclosed additional specifics about its involvement.

The initiative, known as Terafab, was introduced in March by Elon Musk, who leads both SpaceX and Tesla. The project focuses on developing advanced chips to support artificial intelligence workloads, satellite systems, and a proposed space-based data centre concept. It is also intended to support Tesla’s long-term goals around autonomous vehicles and robotics.

Building a semiconductor fabrication plant is widely regarded as one of the most complex and capital-intensive undertakings in the technology sector. Such facilities typically require several years to complete. They can cost more than $20 billion, given the need for massive cleanrooms and highly specialised equipment capable of manufacturing chips with microscopic precision. Until now, it remained unclear how SpaceX and Tesla — companies without direct experience in semiconductor manufacturing — would manage such an effort.

Intel’s involvement offers a clearer path forward. The company has been actively seeking large-scale customers to support its foundry business, and the Terafab initiative effectively positions SpaceX and Tesla as anchor partners. At the same time, the collaboration suggests that the project may rely more on established semiconductor manufacturing practices rather than a completely new engineering approach envisioned by Musk’s companies.

Once considered the dominant force in U.S. chip manufacturing, Intel has in recent years faced increased competition from Nvidia and AMD, both of which have advanced high-performance processor development while adopting fabless models that outsource production. Following the announcement, Intel’s stock rose by more than 3%. Shares were trading at $52.28, approximately 2.9% above the opening price as of 2 p.m. ET.