Intel will partner with SpaceX and Tesla to develop a new semiconductor factory in Texas, although details of Intel’s specific contributions remain unclear.
The collaboration aims to support Terafab’s target of producing 1 terawatt of compute power annually for advancements in artificial intelligence and robotics. Intel stated that its expertise in designing, fabricating, and packaging ultra-high-performance chips will be instrumental in reaching this goal.
Elon Musk announced in March that Tesla and SpaceX would work together on developing chips for AI applications, satellites, and autonomous vehicles. The planned facility will also contribute to a proposed space data center.
Building a semiconductor fabrication facility is a complex project that typically requires over $20 billion and several years to complete. The construction demands a massive clean room designed for precision machinery essential for silicon processing.
The partnership raised concerns about how SpaceX and Tesla, which lack fabrication experience, would manage the logistics of such a project effectively. Intel’s involvement signals an execution strategy, as the company seeks large clients for its foundry services.
Intel’s position has become more critical amid rising competition from Nvidia and AMD, which have gained market share by adopting a fabless model that outsources semiconductor manufacturing.
Following the announcement, Intel’s stock rose by more than 3%, trading at $52.28, approximately 2.9% higher than its opening price, as of 2 pm ET. Intel and SpaceX did not respond to requests for comment by press time.
