Apr 10, 2026
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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"Our ability to design, fabricate, and package ultra-high-performance chips at scale will help accelerate Terafab's aim to produce 1 TW/year of compute to power future advances in AI and robotics," Intel shared on X. But since then, the company has not shared any additional information.
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.
Much needed experience
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.
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."
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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. That led to a sharp decline in the company's stock price, a fall that was halted in August 2025 after a direct investment from the U.S. government.
Analysts are praising the deal, with Neil Shah, a counterpoint research analyst saying it strengthens Intel's foundry credibility and gives Tesla/SpaceX/xAI greater control over its supply chain (4).
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Lingering doubts
Despite the praise from analysts, there are still a number of potential hurdles facing Terafab. Exactly what Intel will be providing is still largely guesswork at this point.
With the limited information it has provided (and none from SpaceX), it's difficult to say whether Intel is planning to take a primary role in creating and running this facility or whether it will be little more than a close consultant. Despite the announcement, it's not altogether certain whether the two parties have signed any sort of binding contract for the work, either.
Meanwhile, Musk's well-known history of overstatement continues to hover over Terafab. Last November, for instance, when he began talking about developing a chip fabrication facility, he told investor Ron Baron (5), "Five years for me is eternity. My timelines are one year, two years."
Musk, however, did not give any sort of timeline when announcing the project last month.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
X (1, 2); Tom's Hardware (3); Counterpoint Research (4); Baron Capital/YouTube (5).
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Chris Morris is a veteran journalist with more than 35 years of experience, the majority of which were spent with some of the Internet’s biggest sites, including CNNMoney.com, where he was director of content development, and Yahoo! Finance, where he was managing editor. His work has also appeared on Fortune, Fast Company, Inc., CNBC.com, AARP, Nasdaq.com, and Voice of America, as well as dozens of other national publications.
