Elon Musk has reportedly found an ally in his plan to launch a chipmaking factory. As Intel recently shared on X, the tech company has joined forces with the founder and CEO of SpaceX to build the latter's Terafab semiconductor project (1). Exactly how deep that partnership goes, however, is still something of a mystery.
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Musk officially announced the Terafab project in March (2), calling it "the most epic chip building exercise in history by far." And that's putting it mildly. Terafab, according to Musk, will eventually create a terawatt of computing power each year. It's expected to make two kinds of chips — one of which would be used for Tesla vehicles and Optimus robots, while the other will be designed to be used in space as part of Musk's plans for a space-based data center.
The factory is expected to start with a smaller fabrication scale than Musk's ultimate vision, then slowly ramp up production. When fully operational (assuming it actually does what Musk is predicting), Terafab will be the world's largest chip fabrication facility, with a production capacity that is 70% of the Taiwan Semiconductor Manufacturing Company's total current global output. Intel's involvement brings something Terafab had sorely lacked: experience in building and running a chip fabrication plant.
Building such a facility is one of the most expensive infrastructure projects around, taking billions of dollars and a lot of time. Micron, for example, began constructing one in Boise, Idaho in 2022 which isn't expected to begin shipping chips until the middle of next year, and Micron is well-versed in the chipmaking world. Read More: How to apply Dave Ramsey's 7 Baby Steps to your own life Tesla, at one point, did have a chip design team, but most of those workers left the company after Musk ended the Dojo project, which was working on Tesla's custom-built supercomputer.
Musk's comments about the process have since raised further concerns. In January (3), for instance, he said the semiconductor industry is "getting clean rooms wrong," betting Tesla would build a 2nm fab where he can "eat a cheeseburger and smoke a cigar." Intel, meanwhile, has been looking for customers to help support its foundry business. The company, once the leader in U.S. chipmaking, has seen Nvidia and AMD surpass it in recent years.
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