Elon “every home will have an affordable robot” Musk has suckered interested Intel into getting involved in his Terafab idea.
For those who came in late, in March, Musk pitched a single Austin, Texas facility to design and make chips under one roof for SpaceX and xAI, which merged in February, plus the publicly traded Tesla.
Fabs are among the most complex and expensive facilities in the world. It can cost $30 billion and take as long as five years to bring a modestly sized facility online, and that’s if you already know what you’re doing.
Neither Musk nor any of his companies has ever built a fab before, so when he announced his pie-in-the-sky plan to build a factory capable of churning out enough chips to make his dream a reality, folks saw it in the same way as his dream to have a Mars colony or his insistence that everyone would have an affordable robot.
He is promising rapid experimentation, with chip design and manufacturing parked in the same building so his engineers can iterate quickly and break things without waiting in someone else’s queue.
On Tuesday, Intel said it would work with the firms to “design, fabricate, and package ultra-high-performance chips at scale.” It even pushed out a photo of Intel chief executive Lip-Bu Tan shaking Musk’s hand.
For Intel, the tie-up lands as a much-needed morale shot after years of stumbling, shrinking capacity and missing the data-centre chip boom while Nvidia and AMD feasted.
Last year, the Trump administration struck a deal to take an equity stake worth around $9 billion, pitched to secure the US chipmaker’s business.
The US government held 8.4 per cent of Intel’s outstanding shares as of 20 March, according to securities filings, and that excludes warrants that could bump the stake higher.
Intel chief executive Lip-Bu Tan said, “Terafab represents a step change in how silicon logic, memory and packaging will get built in the future,” on X.
The plant is slated to supply silicon for Tesla’s robotaxis and the Optimus humanoid robot, two big bets as the carmaker leans harder into artificial intelligence-flavoured gadgets.
SpaceX is meant to get space-optimised parts for satellites, with plans to deploy large numbers capable of handling AI computing tasks in orbit.
Plenty of firms design their own semiconductors, then hand the manufacturing to a foundry, because building a cutting-edge fab is a cash bonfire.
Musk’s outfit has bought chips from Nvidia, Samsung and Taiwan Semiconductor Manufacturing, and he has argued Terafab is needed because demand is set to outstrip what partners can deliver.
Chipzilla is now on the hook to turn that hunger into wafers and packages at scale.
