Facility is designed to vertically integrate the entire chip production pipeline — design, lithography, fabrication, memory, advanced packaging, and testing — all under one roof.
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Terafab will produce two types of chips: the A15 and A16 chips, optimized for edge inference in Tesla's Optimus robots and self-driving cars, and a second type of rugged, high-powered chip designed for use in orbital data centers in space.
COLLEGE STATION, Texas — Elon Musk appears to have identified a site for his massive Terafab chipmaking facility — and it's right outside of Aggieland.
The chipmaker will help Terafab's semiconductor manufacturing facility get off the ground. While the revenue impact of the Terafab collaboration is unknown, Intel's business is showing signs of a comeback.
SoftBank put in $2B. In April 2026, Intel joined Elon Musk’s Terafab project in Texas — the chip-manufacturing venture between Tesla, SpaceX, and xAI targeting one terawatt of compute per year.
Terafab is a semiconductor fabrication facility being built near Tesla’s GigaTexas site in Austin, Texas. The plant would be vertically integrated and produce one terawatt of AI compute capacity per year. It would make chips for Tesla vehicles and robots, as well as non-terrestrial chips for space-based data centers.
Intel was named as the foundry partner for Elon Musk’s Terafab, a 25 billion dollar AI chip fabrication facility in Austin that claims it will produce one terawatt of AI compute annually.
For all the Musk haters. https://www.msn.com/en-us/money/other/elon-s-terafab-is-moving-at-light-speed-and-that-could-mean-big-things-for-tesla/ar-AA22irvx
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TSLA's $25B+ CapEx for Terafab, Cortex, and Optimus will likely drive negative FCF and margin compression in H2-FY2026, exacerbated by one-off Q1 margin inflators.
Intel has invested heavily in its foundry division to compete directly with Taiwan Semiconductor Manufacturing, the world’s top contract chipmaker, and other major rivals, such as Samsung. However, differences in manufacturing technology have made it hard for Intel to attract large outside clients. The TeraFab deal with Tesla and a government equity stake have helped support Intel’s turnaround story, but a confirmed deal with Apple would be a much bigger sign of success for Intel’s foundry goals
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Tesla sits at the intersection of electric vehicles, energy storage, and software, and the push into heavy trucks and chips adds new dimensions to that mix. The Tesla Semi targets commercial freight customers looking at electrification, while Terafab focuses on supplying chips for both vehicles and robotics.
Intel is aggressively looking for external customers for its foundry business and recently announced a deal with Tesla for Terafab. Lip-Bu Tan, Chief Executive Officer of Intel, appears at an event organized by the company.
SpaceX will manage the initial phase of the larger-scale Terafab build. The motivation: Musk sees no path to sufficient AI chip supply at the volumes Tesla needs without making its own silicon.
On April 9, Intel's Foundry-branded chip manufacturing services scored a couple of massive wins. The unit signed a long-term partnership with Tesla (NASDAQ: TSLA), making Intel a founding partner of the upcoming Terafab chip-making facility. At the same time, Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) committed to using Intel Xeon processors and jointly developed accelerators in Google Cloud's AI operations.
Design commitments from external customers are expected to begin in the second half of 2026. The partnership with Tesla, SpaceX, and xAI’s Terafab project, announced alongside these results, is the first major external signal that 14A is a production-credible target.
With Ranade becoming Intel’s permanent CTO after first taking on the role in December, his responsibilities will include the advancement of its technology strategy, the oversight of special technology projects like the Terafab initiative with Elon Musk, and the development of “critical emerging areas” such as quantum computing, neuromorphic computing, photonics and novel materials, according to Tan’s memo.
Musk himself signaled where this ... convergence.” Tesla and SpaceX announced a joint semiconductor fabrication facility in Austin called Terafab on the Gigafactory Texas campus, covering two advanced chip factories, with one ...