How Elon Musk's Texas Terafab will Make AI Chips | Manufacturing Digital
Elon explained: “We're still working out the details of the Terafab deployment. "In the near term, Tesla will be building the research fab on our Giga Texas campus.
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Elon explained: “We're still working out the details of the Terafab deployment. "In the near term, Tesla will be building the research fab on our Giga Texas campus.
“We either build the Terafab or we don’t have the chips,” Musk had said during a presentation in Austin in March, adding that current global chip production would meet only a small fraction of his companies’ future needs. The only loser that I can see here is Samsung Foundry. Not long after Samsung and Tesla signed an 8 year $16.5B 2nm wafer agreement Elon Musk announces to the world that not enough 2nm chips can be made?
At the same time, Tesla and SpaceX chose Intel’s upcoming 14A manufacturing process for the Terafab AI chip project, giving Intel a high‑profile external foundry customer just as AI‑related data center demand pushed its Data Center and AI segment revenue higher year over year.
This partnership, which involves companies like Tesla, SpaceX, and xAI, is centered around a project known as TeraFab. While the exact details are still not fully clear, the collaboration appears to focus on Intel’s upcoming 14A chip manufacturing ...
SpaceX’s plan is that 80% of Terafab’s output will power data centers in orbit, not on Earth.
Elon Musk has laid out plans for Terafab, a massive AI chip manufacturing project in Austin intended to support Tesla, SpaceX, and xAI. The project would reportedly involve Intel’s next-generation 14A process and could become a major test of U.S.
Elon Musk announced that a significant part of this massive investment will be transferred to the Terafab chip factory, which will be established in Texas in collaboration with Tesla and SpaceX at a cost of $3 billion.
Intel’s own materials on advanced packaging underline how much of modern compute capability now depends on combining multiple dies within a single package. Performance, bandwidth, thermals, and density increasingly depend on packaging and integration choices rather than on logic scaling alone. That is one reason the repeated pairing of “logic, memory, and packaging” in the Terafab discussion is significant.
For practitioners, the practical consequence is a potential new source of advanced node capacity that could open alternative supply for AI accelerators, but with uncertainty on timelines and unit economics. Monitor concrete agreements between Intel and Musk entities (licensing terms, IP transfer, and capacity commitments), yield and qualification milestones for 14A, and funding or permitting signals that move Terafab from concept to large-scale construction.
Intel announced earlier this month ... chips for Tesla's vehicles and robots, as well as future orbital data centers for SpaceX.Musk noted that 14A is still under development by Intel but, "by the time Terafab scales up, 14A will likely be quite mature or ready for prime time."On ...
As Intel has discovered, making chips exclusively for yourself is great when your factories and chip designs are the best in the world. When they aren’t, competitors can use contract manufacturers like TSMC to make better ones. If Terafab chips are a couple of generations behind TSMC’s, Tesla might regret being tightly tied to its own factories.
“By the time Terafab scales up, 14A will probably be fairly mature or ready for prime time,” Musk said. ... Intel also recently bought back a 49% stake in its Ireland chip fab from Apollo Global Management for $14 billion — a sign Tan is betting on the foundry business long-term. CFO David Zinsner told CNBC that advanced packaging — one of Intel’s genuine strengths — could bring in billions per customer.
TrendingApple Nvidia TSMC AI Search NTN Convergence Inference Era AI Advanced Packaging · Trending · SUBSCRIBE · CONNECT WITH US · Home Tech Semiconductors · Elaine Chen, DIGITIMES Asia, Taipei Apr 23, 2026, 11:30 0 · Credit: AFP · Tesla plans to use advanced semiconductor manufacturing technology from Intel in its ambitious Terafab project, a development that could mark a significant milestone in Intel's efforts to re-establish itself as a leading global chip foundry.
During its Q1 2026 earnings call, Tesla CEO Elon Musk made it official that the TeraFab project was going to use 14A, Intel's much-discussed process technology, which is expected to be a game-changer for them in the Foundry business.
Intel Secures Teslas Terafab via 14A Process Intels foundry division gains major boost through AI chip partnership, reviving U.S. semiconductor ambitions
Meanwhile, the Terafab initiative has also drawn in its chip manufacturing partner Samsung Electronics, though Samsung is said to have suggested that additional capacity from its under-construction Taylor, Texas fab could be allocated to Tesla instead, Bloomberg notes.
Tesla chief Elon Musk said on Wednesday ... project, an advanced artificial-intelligence chip complex Musk has envisioned in Texas. Musk's SpaceX, its xAI unit and Tesla will build two advanced chip factories at a sprawling facility in Austin, one to be ...
Gigafactory Texas will be the site of at least a portion of that spending. Tesla has said it will begin its so-called Terafab project with a research fab on its campus east of Austin.
Tesla CEO Elon Musk confirmed that the 14A process will be central to manufacturing chips for the Terafab project, which envisions advanced AI processors for both humanoid robots and space data centres. This strategic alliance is designed to fuel Musk's expansive robotics and data centre ambitions, providing the computational horsepower required for future innovations.
Tesla has selected Intel’s next generation 14A manufacturing process for its Terafab project, with SpaceX also planning to use the technology. The decision represents Intel’s first major external foundry win on an advanced node with a high profile customer.