Elon Musk’s Texas-based Terafab AI chip production project has a new partner in one of the world’s largest semiconductor chip manufacturers. Intel said on Tuesday that it is signing on to help design and build the chip-producing hardware for the $25 billion project backed by Musk’s SpaceX, xAI and Tesla.
The semiconductor technology that Terafab is slated to mass-produce is necessary for many of the billionaire’s promised products, including self-driving cars, humanoid robots and sprawling AI data centers.
Building chip fabrication plants, or fabs, is no simple task. US companies have for years relied on the Taiwan Semiconductor Manufacturing Company, which produces 90% of advanced computer chips globally, to actually create the chips that power our electronics.
But as the AI industry calls for more and more computing power, US companies are scrambling for control over chip production. Musk’s Terafab facility is far from the only domestic investment in AI chips. Nvidia and TSMC, for example, have partnered to manufacture chips and supercomputers in Arizona.
Intel CEO Lip-Bu Tan wrote on X, formerly Twitter, that the partnership is “exactly what is needed in semiconductor manufacturing today.”
“Terafab represents a step change in how silicon logic, memory and packaging will get built in the future,” Tan wrote.
Intel said it aims to produce enough chips to provide one terawatt of computing power per year once the facility is operational. This aligns with Musk’s own claim when he initially announced plans for the Terafab facility.
Despite publicly committing to Musk’s Terafab, Intel is still dealing with its own AI chipmaking struggles. The US semiconductor giant has faced delays bringing two fabs to fruition on its Ohio One campus despite receiving significant government subsidies. While the company previously stated AI chip production would begin in 2025, its first fab is now slated to be completed in 2030 and to begin operations in 2031. The second fab is expected to be completed in 2031 and to begin operations in 2032. Intel’s total expenditure on these facilities has reached $5.26 billion.
The company is also building two fabs in Arizona, competing with more than 70 other semiconductor producers looking to establish a foothold in the state.
Musk and his companies also have a history of announcing things with big expectations that never happen or take far longer. Remember the Hyperloop? So it stands to be seen whether the Terafab’s eventual reality meets today’s hype.
Representatives from Intel, Tesla and SpaceX didn’t immediately respond to requests for comment.
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