Elon Musk and Intel’s Terafab: The Future of Chip Manufacturing

Kind: captions Language: en Elon Musk's Terafab project now in collaboration with Intel aims to revolutionize semiconductor manufacturing by integrating logic, memory, and advanced packaging through critical details like funding and timing those still unclear as AI demand pushes limits of the current supply chain. From all that said to Florida, we're joined by Brad Gastwirth from Circular Technologies. Brad, talk to us. What is Terafab? What is the actual primary goal of the project? Yeah, so this is something that Elon Musk announced. And essentially, it's sort of recreating the whole semiconductor foundry supply. You know, right now you have many different processes. You have Taiwan Semi being the leading foundry along with in Samsung and then Intel, you know, a far third. Then you have, you know, advanced chip and packaging like an ASE or Amkor. You also have all these other chips that go into the process. Usually each of these are done separately. What Musk is trying to do is vertically integrate the fab. So each of them takes place together. There's really some healthy skepticism from the industry if he will be able to achieve something this ambitious. You know, the one thing that I think most people have learned is betting against Elon has not proved right. So, you know, if there's one person in the world that can do it, he's probably the person. But this is no easy task at all. What's the involvement of Intel here? And how does that impact Elon Musk's project objectives? Yeah, so this was the the big news today that Intel is going to be part of this Terafab. So Terafab is going to be this sort of venture between XAI, Tesla along with SpaceX. And it's going to be, you know, could be one of the world's largest type fabs ever built. Now it's still unclear exactly how Intel will be helping. You know, clearly it's going to be on advanced processing for the foundry side. So the, you know, one reason why vertically integrating it is incredibly tough. Just the, you know, the best companies in the world in each of the respective parts have problems by themselves. So now, if you try to integrate that all, you know, that's a that's a lot of a lot of pain points. So what I guess are the key components of semiconductor manufacturing that Terafab is aiming to integrate? What are they hoping to achieve? Yeah, so I mean again, right now from the the way semiconductor is made, you start with a wafer, you go to Taiwan Semi, it gets etched, then it goes to another company for packaging, you go to another company for substrate. There's all these different areas along the road that this wafer goes to. And then it gets a finally, you know, a final test and assembly, it gets tested, and then it's sent out. None of these things, none of those steps are all done together. And what Musk is trying to do is really vertically integrated, so it's all done within the same process. Again, it's there's Some people think this can never be achieved. You know, I I think there's, you know, again, there's if there's somebody can do it, he's probably the person. But the the size of the fab that he's talked about and there's been the, you know, lack of information, you know, there's no timeline, there's not really, you know, a funding schedule. But you know, I wouldn't be surprised that after like a SpaceX goes IPO and you get another, you know, 70 100 billion dollars, that a very significant portion will be going to this project. Yeah, he's an incredible person, isn't he? The amount of stuff that he deals with and decides to have projects to take on as well. I mean, you mentioned there the SpaceX IPO. How do you think that will go? Yeah, I mean it's I think it will go quite well. I I think there's incredibly strong appetite for it. I think it's going to be, you know, the largest, if not the largest, you know, one of the largest IPOs ever. I think, you know, the next the next big wave and the next big move is really, you know, things into space. And you know, again, he's he's shown that he's able to, you know, even though he's CEO and was CEO of few large companies, he was still able to get the job rolling. So I think there's incredible demand. I think it'll do quite well. What do you think the biggest challenge is at the moment for AI? Do you think it is the funding side, which seems to be plenty of money, but the question of ROI? Few articles over the weekend I was reading in terms of how OpenAI, the biggest growth ever that we've seen, but also the biggest loss ever that we're seeing as well. And then on the other side you have the semiconductor problem, and you also have the chip problem where it's a struggle to try and get these AI chips. So what do you think is the thing that could hold AI back the most? Yeah, it's I I I definitely don't think it's the funding side. I think there's so much money on the sidelines that could be, you know, used in the AI side. And I still think we're only at, you know, tier one and tier two funds. So we haven't even gone, you know, these companies haven't even scratched the surface for the lower tier companies yet for money. So I think funding is not an issue at all. I do think it's really supply. There's just not enough stuff. And you know, using stuff pretty loosely, there's not enough semiconductors, not enough memory, there's not enough storage. There's just not enough capacity to have, you know, to to make sure that demand is met. And I think again, this is another part of Terafab where they're trying to answer those questions, but ultimately, you know, even with the spending and I, you know, I give a lot of these companies credit because they're not overbuilding capacity like we saw in last cycles. And they're being smarter this time around. But we're also in this hyper exponential growth, you know, territory where being conservative really being an issue because now you're getting bottlenecks. All right. Well, Apple is reportedly delaying its highly anticipated foldable iPhone maybe to next year citing ongoing issues with hinge durability and display reliability raising investor concerns about its next major growth driver. We saw investors, well, Apple share price take a hit as a result of this. Tim Cook, the operations man, what is going on at Apple because you and I've been speaking about a foldable phone, and you've been pretty confident, Brad, it will happen this year. I still believe it will. I I think that, you know, first of all, in terms of moving the stock, we're talking about such a low million number of units for this year for the foldable. So from a stock perspective, for the stock to get hit on this is is really sort of short-sighted. I do think they'll still come out with it this year. I I don't believe that it's going to be fully pushed into 2027. I do think that design, you know, if you have some issues on the hinge, I think the the initial units probably will be less and they're probably going to eat, you know, any type of returns. But I I do feel, at least from my early checks, that right now we're still on target for this year. You know, I'm we'll be going back to Asia in in the next probably four to six weeks. And you know, maybe I'll get a better update after that. But right now I'm still fully expecting it this year. Now obviously Apple has been shifting production for the iPhone around. Is that having anything to do with this? They've been building Foxconn in India. There's been talk about manufacturing iPhones in the United States, at least certain parts, the glass for example, to keep President Trump happy. Is all of this movement, would it have just been simpler to keep it in China? Um yeah, maybe. I I don't think these other areas, I don't think Foxconn over in India or some of these semiconductors built in the United States have anything to do with the foldable, quite honestly. I think this is just a design issue where, you know, these type of devices, you know, break. I mean, the Samsung foldable, it's not covered by insurance. So, you know, when you have one of those very expensive phones and that screen cracks, you're not getting insured on that phone, at least here in the United States. So, I think there are, you know, issues with that design. I think it's a very difficult one. Is it a revolutionary? No, I mean, they're four years late to the party. Will they get it right the first time? I expect it'll be better their first version versus others. But I mean, the the funny thing just to bring up on the Taiwan Semi side, you know, Taiwan Semi making some of these Apple chips here in the United States, they you can't even say made in the United States cuz it's just the wafer. And going back to the Terafab, you know, Taiwan Semi then sends those wafers overseas to put substrates to package them, and then they're sent back to the United States as a full package. So, I mean, to say made in the United States I think is something Cook has said. It's definitely um Hey, well, look, it keeps the White House happy, and that probably counts for something at the moment, at least in terms of the share price. I have the iPhone Air. And trying to convince other people to get the iPhone Air has been rather tricky. And here in Australia, they've been on sale at most stores. You can get it instead of the 1800 that I paid for as a dummy when it came out. It's now at about 1400 Australian dollars. The iPhone Air was touted as Apple's step one to the foldable phone. And it hasn't really sold that well. I think we can blame Marques Brownlee for that one and his initial review about the battery life. What does that say about demand, do you think, for the foldable iPhone? Do you think Apple should be going down this path? I think they needed to do something innovative. Right? I mean, they haven't had a change, and I can't think about how long. Now we could see the Air is a change, but not really. It's just a little bit thinner. They're using an old aluminum aluminum design. I mean, I I think I mentioned this last time with you, Aaron. Almost every person I know who bought that Air has gotten rid of it for one reason or another. And you know, it's just not built that well. And you know, for me, you know, being very close attention to the components that go into these things, it's not best-of-class components. So, you You for me, I I I you know, I used to carry both devices. I carried my iPhone and I carried I used to carry a Huawei before they banned it here in the United States. Um so, now I have my 24 Ultra um and you know, I think that I mean, I got my five cameras, I have a 100 times optical zoom. It's um you know, far superior camera compared to anything else out there and you know, maybe in a year, maybe in 3 years we'll get a five camera iPhone. All right, Brian. Really appreciate your time. Uh thanks so much. We'll talk to you soon. Cheers. Sounds great.