Intel will collaborate with SpaceX and Tesla to establish a semiconductor factory in Texas, although the specifics of Intel’s contributions are not yet defined.
The partnership aims to produce 1 terawatt (TW) of compute annually, supporting advancements in AI and robotics. Intel stated that its expertise in designing, fabricating, and packaging ultra-high-performance chips will be crucial for the project, named Terafab.
Elon Musk announced this partnership in March, highlighting the development of chips for AI compute, satellite operations, and autonomous vehicle technologies. However, constructing a chip fabrication facility is notoriously challenging and expensive, typically requiring over $20 billion and years to build.
Intel is proud to join the Terafab project with @SpaceX, @xAI, and @Tesla to help refactor silicon fab technology.
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… pic.twitter.com/2vUmXn0YhH
— Intel (@intel) April 7, 2026
SpaceX and Tesla lack prior experience in semiconductor manufacturing, raising questions about their ability to execute the project effectively. Intel’s involvement may mitigate some concerns by providing the necessary technical expertise.
This collaboration aligns with Intel’s strategy to attract large anchor customers for its foundry business. The participation of SpaceX and Tesla represents significant clients and could reshape expectations regarding Terafab’s development approach.
Intel has historically been a leading player in silicon production, but it has recently fallen behind competitors like Nvidia and AMD, which utilize a fabless business model. Following the announcement, Intel’s stock rose by more than 3% to $52.28, marking an increase of approximately 2.9% from its opening price.
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