Intel has officially joined Elon Musk's ambitious Terafab semiconductor project, partnering with SpaceX, xAI, and Tesla to develop next-generation silicon fabrication technology. The initiative aims to produce a staggering 1 terawatt per year of compute power, primarily for artificial intelligence and robotics applications.
The chip manufacturing complex will be built in Austin, Texas, and will consist of two advanced factories. One facility will focus on powering vehicles and humanoid robots, while the other will be dedicated to AI data centers for space applications. Tesla and SpaceX will operate these factories jointly. Intel's role is to contribute its established chip design, fabrication, and packaging capabilities to accelerate the project's goals.
The announcement, made via a post on X, follows a visit by Elon Musk to Intel's facilities the weekend prior. Intel CEO Lip-Bu Tan emphasized the strategic importance, stating, "Elon has a proven track record of re-imagining entire industries. This is exactly what is needed in semiconductor manufacturing today. Terafab represents a step change in how silicon logic, memory and packaging will get built in the future."
Intel's stock (INTC) reacted positively to the news, climbing roughly 2-3% on the day of the announcement. The chipmaker's shares have already gained approximately 38% year-to-date in 2026. In contrast, Tesla's stock fell close to 2% on the same day. The partnership arrives as Intel continues a corporate turnaround under CEO Tan, involving restructuring, cost cuts, and regaining full ownership of key manufacturing assets.
Analysts from Wedbush have suggested the Terafab collaboration could be an early step toward a potential future merger between Tesla and SpaceX. The project's website, terafab.ai, went live following the official announcements.
