10 Sources
[1]
Elon Musk says his TeraFab facilities will use Intel's 14A process technology to make AI chips -- SpaceX will be responsible for high-volume chip manufacturing in likely Intel tech licensing deal
Elon Musk on Wednesday said that TeraFab plans to use Intel's 14A fabrication technology when it has its own production capacity later this decade and when the manufacturing process matures. He also revealed that Tesla will be responsible for building and operating a pilot production line, whereas SpaceX will be responsible for high-volume manufacturing of chips. TeraFab to use Intel 14A "We plan to use Intel's 14A process, which is state-of-the-art and in fact not yet totally complete," Elon Musk, chief executive of Tesla, said during Tesla's earning's call with analysts and investors. "By the time TeraFab scales up, 14A will be probably fairly mature or ready for prime time. 14A seems like the right move and we have a great relationship with Intel, a lot of respect for the CEO, the CTO, and the new team there." Based on the comments made by Musk, he wants to use Intel's 14A manufacturing technology at TeraFab, which likely means licensing the fabrication node from Intel and integrating it at a fab operated by TeraFab. Meanwhile, Musk has never mentioned licensing per se, which means that while Intel is expected to participate in TeraFab as a partner, actual details of its role have yet to be defined. As for Tesla and SpaceX, the division of responsibilities is straightforward: Tesla handles the research fab, while SpaceX builds and operates a high-volume manufacturing facility. Tesla handles R&D, SpaceX handles manufacturing In the short term, Tesla intends to construct a semiconductor R&D facility at its Texas campus, with an estimated cost of around $3 billion. This site will be a small pilot line capable of processing a few thousand wafers per month, and its purpose will be to experiment with new ideas in semiconductor manufacturing as well as validate whether these ideas can be realized in a production-like environment. From what we can tell, 14A will barely have anything to do with the pilot line in Texas. "In the near term, Tesla plans to build a research fab at its Gigafactory Texas campus," Musk said. "This is something we expect to be a $3 billion initiative and support a few thousand wafers per month. "It is really intended to try out ideas [...] for improving the fundamental technology of how chips are made, some of new physics we would like to test out. We also want to test out the ability to see if something is working in production [environment]. You need kind of like a few thousand wafer starts a month to make sure that a production process is sound." For scaling beyond the pilot phase, SpaceX is expected to build an actual high-volume manufacturing facility. However, coordination between Tesla and SpaceX introduces many challenges, as any joint effort must be approved by both companies' boards and pass conflict-of-interest reviews, which will inevitably slow down the project. "That is basically what we have figured out thus far is Tesla's doing the research fab, SpaceX doing the initial part of the large-scale TeraFab and then we got to figure out the rest," Musk said. Licensing a process technology is one of the ways for TeraFab to get a fabrication node quickly (as it may take a decade to design a manufacturing tech from scratch), whereas for Intel, this could mean an influx of cash. Historically, chipmakers have licensed process technologies from others if they could not design their own node on time, or the parties wanted to create a virtual foundry with compelling capacity to compete with larger contract chipmakers. For example, GlobalFoundries licensed Samsung's 14nm-class process technologies in 2014 - 2015 after it failed to complete development of its own 14nm XM production node. While there were rumors that GlobalFoundries produced some of Samsung's Exynos processors at its fab in New York, the first clearly attributable, high-volume GF-built 14nm products -- AMD's Radeon RX 400-series 'Polaris' GPUs only showed up in 2016. This incited rumors about GF's inability to integrate the node and maximize yields. Rapidus is a more recent example, as it has licensed IBM's 2nm technology for its fabs. It remains to be seen whether it is possible to license Intel's 1.4nm-class process technology and then port process recipes, tune tools, and maximize yields at a TeraFab facility. After all, modern process technologies are dramatically more complex than those from a decade ago. Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds.
[2]
Musk Asks Suppliers to Move at 'Light Speed' on Terafab Project
The project aims to produce cutting-edge chips for artificial intelligence, robotics, and space, with a goal to supply a significant amount of annual computing capacity, but its feasibility and timeline are uncertain. Elon Musk's lieutenants have reached out to chip industry suppliers including Applied Materials Inc., Tokyo Electron Ltd. and Lam Research Corp. for his envisioned Terafab, early steps in an audacious and likely arduousBloomberg Terminal attempt to break into the production of cutting-edge chips. Staff working for the joint venture between Tesla Inc. and SpaceX have sought price quotes and delivery times for an array of chipmaking gear, people familiar with the matter said. In past weeks, they've contacted makers of photomasks, substrates, etchers, depositors, cleaning devices, testers and other tools, according to the people, who asked not to be named disclosing private discussions. The Terafab team also asked chip manufacturing partner Samsung Electronics Co. for support. The South Korean company instead proposed allocating more capacity for Tesla at its planned factory in Taylor, Texas, according to the people. The outreach suggests Musk is pressing ahead with Terafab in the face of skepticism from the semiconductor industry. The project, as envisioned, aims to reshape the chipmaking landscape and propel the world's richest person into an arena dominated by Taiwan Semiconductor Manufacturing Co. Intel Corp. said it will join the Terafab initiative, with its Chief Executive Officer Lip Bu Tan posting a photo of Musk on a recent visit to the chipmaker's Santa Clara office. Musk's representatives have asked for speedy price estimates while providing minimal information about the products to be made. In one case, they asked a supplier on a holiday Friday for an estimate to be delivered the following Monday, one of the people said. Musk wants to move at "light speed," the person was told. The Terafab project -- which has a mind-boggling goal to supply 1 terawatt of annual computing capacity -- is the latest ambitious undertaking by Musk. While Tesla designs its own autopilot FSD chips, Musk's companies have never manufactured semiconductors. Yet he's now proposing to make them at a scale that would dwarf the world's current capacity, starting with a pilot line in Austin that taps Tesla's existing EV factory and infrastructure. The idea is that the chips would be used to support Musk's artificial intelligence business xAI, a line of humanoid robots and data centers in space -- ambitions that many in the semiconductor industry don't take seriously. The ultimate scale of the project, and whether it expands into a single mega site or multiple locations beyond Texas remains unclear. Read more about Terafab Musk's Terafab Fever Dream Exposes Reality of the AI Chip Crunch Musk Says Tesla, SpaceX, xAI Chip Project to Kick Off in Texas Iran War Chokepoints Begin to Cast Doubt on Global Chip Supply Why the AI Boom Will Make Phones, Cars, Devices More Expensive The project is offering to pay a considerable amount above the quoted figures if suppliers give Terafab priority, according to the people. No fixed orders have been placed as it's not clear what technology will be used or where the chips will be made, but the first step will be construction of a pilot line to process 3,000 wafers per month, the people said. The goal is to begin silicon manufacturing by 2029 and then scale up, one of the people said. The project would require something like $5 trillion to $13 trillion in capital spending, according to estimates from Bernstein analysts. Applied Materials, Tokyo Electron, Lam Research and Samsung spokespeople declined to comment. Representatives for Tesla, SpaceX and xAI did not respond to requests for comment. Musk -- echoing similar concerns in corners of Silicon Valley -- has said the semiconductor industry isn't ramping up fast enough to produce the chips that AI companies will need. Amazon.com Inc., Alphabet Inc. and other hyperscalers expect to spend about $650 billion this year alone to build out data center infrastructure. That's already creating a severe crunch in memory chips, and is beginning to spill over into AI accelerators. Musk in March outlined plans for the massive operation to build cutting-edge semiconductors for artificial intelligence, robotics and space forays. In so doing, he would take on the best chip manufacturer in the world -- TSMC. Such an endeavor will involve hundreds of steps that intersect multiple engineering fields, with collaboration from companies ranging from suppliers of industrial gases to testing equipment. Applied Materials and Tokyo Electron are critical players in the $1 trillion chip market, supplying the equipment that TSMC and its rivals require for complicated processes such as etching and deposition. ASML Holding NV is perhaps the most essential piece of the chip production supply chain: It's the only company that can make extreme ultraviolet lithography machines, essential for any chipmaker that wants to fabricate the most sophisticated semiconductors at scale. It's unclear whether Musk's team has reached out to the Dutch company as well. Get the Tech Newsletter bundle. Get the Tech Newsletter bundle. Get the Tech Newsletter bundle. Bloomberg's subscriber-only tech newsletters, and full access to all the articles they feature. Bloomberg's subscriber-only tech newsletters, and full access to all the articles they feature. Bloomberg's subscriber-only tech newsletters, and full access to all the articles they feature. Plus Signed UpPlus Sign UpPlus Sign Up By continuing, I agree to the Privacy Policy and Terms of Service. Tesla board member Ira Ehrenpreis accompanied Musk on his visit to Intel's headquarters earlier this month. In addition to the US chipmaker's expertise, Musk has been recruiting people with knowledge of many different facets of chip plant operations, from chip design to power management, construction and procurement. In the manufacturing sphere, offers have been made to engineers at companies including Applied Materials, Samsung and TSMC, the people said. The project seeks to handle the entire chip manufacturing process from photomask production to testing and packaging in-house. Terafab aims to make AI chips for devices such as robotaxis and Optimus humanoid robots. It also seeks to manufacture high-power semiconductors for use in space by SpaceX and xAI. Musk said he expects xAI to use the vast majority of the components. Some question whether Musk will ever be able to build anything like the Terafab project he sketched out in Austin. The billionaire has accomplished what others believed impossible before -- creating a commercially viable rocket business with SpaceX and bringing electric vehicles to the mainstream with Tesla. Yet he may settle for more modest accomplishments in the chip industry, given the extreme costs and complexity. Hamburg-based Berenberg has yet to include Terafab into its financial models for ASML, whose High NA EUV equipment would likely be used in such an endeavor, Tammy Qiu, the bank's head of tech equity research, said on Bloomberg Tech. "The intention is real," but it won't be something happening in a significant way for another two years, she said. "We haven't put Terafab in our numbers."
[3]
Intel lands Tesla as first major customer for 14A chip technology
April 22 (Reuters) - Tesla (TSLA.O), opens new tab CEO Elon Musk said on Wednesday the EV maker plans to use Intel's (INTC.O), opens new tab next-generation 14A manufacturing process to make chips at its Terafab project, an advanced AI chip complex Musk has envisioned in Austin. The contract would mark Intel's first major customer for the technology, a breakthrough for the chipmaker which has struggled to stand up its contract manufacturing business essential for taking on top rival TSMC (2330.TW), opens new tab. Intel CEO Lip Bu Tan has said that the company would exit the chip manufacturing business altogether if it failed to secure an external customer. Intel has previously said it was in discussions with large customers about 14A, but has not yet disclosed a major external customer. It declined to comment on Musk's remarks. The chipmaker's shares rose 3.6% in extended trading. Intel joined Musk's Terafab AI chip complex earlier this month with SpaceX and Tesla to make processors to fuel the billionaire's robotics and data center ambitions. Tesla on Wednesday sharply boosted its capital investment plans, with Musk saying the outlay was necessary to fuel future revenue streams. The carmaker's investors were less than impressed, pushing its stock down slightly after hours. Musk, who has wooed investors with his promises to build ubiquitous humanoid robots and data centers in space, has also drawn criticism for his loose timelines and often-missed deadlines. The Terafab, too, would be a massive undertaking. Musk said in March his space startup SpaceX and Tesla would build two advanced chip factories at this sprawling facility, one to power cars and humanoid robots, and another designed for the space data centers. Many details of the Terafab project - such as who will pay for pricey chipmaking equipment, who will operate the factory and when it will come online - remain unknown. Musk has said, though, that Terafab will eventually produce one terawatt of computing capacity a year, compared with about half a terawatt currently generated across the United States. Building enough chip capacity to power one terawatt of annual compute would cost between $5 trillion and $13 trillion in capital expenditure, according to Bernstein estimates. REAL VOLUMES For Intel shareholders, though, this is good news. "Given that by the time Terafab scales up, 14A will be probably fairly mature or ready for prime time," Musk said. "14A seems like the right move, and we have a great relationship with Intel," he said. Ben Bajarin, head of technology consultancy Creative Strategies, said that Intel's 14A technology could "turn out to be a bigger deal for Intel than folks thought." "It's important to have multiple partners as early design partners to help clean the pipe and work through needed learnings at the leading edge. They will definitely have scale, so a great first non-Intel customer," Bajarin said. Seaport Research Partners analyst Jay Goldberg said Musk's vote of confidence in Intel's technology outweighed the unknowns about the Terafab project. "Having a customer is more important than the timing," he said. Goldberg said that Musk's lofty estimates of how many chips its robots could one day require may or may not materialize, but even making chips for Tesla's existing businesses would be a significant win for Intel. "It's not equivalent to Apple or Nvidia" in terms of chip volumes, Goldberg said. "But it's a real customer. It can be real volumes." Reporting by Zaheer Kachwala and Aditya Soni in Bengaluru and Stephen Nellis in Morgan Hill, California; Editing by Deepa Babington, Sayantani Ghosh and Kim Coghill Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Autos & Transportation * ADAS, AV & Safety * Sustainable & EV Supply Chain
[4]
Intel boosted as Elon Musk says his Terafab will use its latest chipmaking tech
Elon Musk has said his companies will use Intel's latest technology in their "Terafab" project, giving a boost to the US chipmaker's manufacturing turnaround. Intel shares rose about 3 per cent in after-hours trading on Wednesday after Musk said Tesla and SpaceX would deploy its "14A" manufacturing process in their giant semiconductor facility. Intel has spent billions of dollars attempting to catch up to Taiwan's TSMC to offer the most advanced chipmaking technology. But it has yet to publicly confirm it has secured any customers for its 14A technology, which is still being tested by potential Big Tech clients. The endorsement from Musk gives Intel a much-needed vote of confidence in the new technology. Analysts say the Terafab, if completed, would eclipse the entire current global output of the chip industry. "We plan to use Intel's 14A process, which is state of the art and in fact not yet totally complete," Musk told analysts on Tesla's earnings call on Wednesday. The technology would be "fairly mature" by the time Terafab started operating, he added, praising Intel's team, including chief executive Lip-Bu Tan. Intel has struggled to land external customers for its manufacturing business -- including its current-generation 18A manufacturing process -- since launching a vastly expensive bid to regain its status as a world-leading chipmaker. Intel did not immediately respond to a request for comment. The US chipmaker is due to report its own earnings on Thursday. Tan had earlier this month announced Intel was partnering with Musk on the Terafab but revealed few details. Musk has launched the manufacturing project with the ambition to build a full suite of chips -- encompassing logic, memory and packaging -- for his companies, including Tesla and SpaceX. The memory chip market, supplied by Samsung, SK Hynix and Micron, is experiencing a particular shortage as AI infrastructure builders seek unprecedented quantities of high-bandwidth memory. Without the Terafab, "we don't see a path to having enough" chips for AI given "the rate at which the industry is growing", Musk told investors on Wednesday.
[5]
Intel Needed A Lifeline. It Just Got One -- And It's Got Elon Musk's Name On It - Tesla (NASDAQ:TSLA)
Intel Gains A Crucial Outside Customer Intel's role in Terafab first surfaced earlier this month, when Reuters reported that Tesla and Musk-controlled SpaceX planned two advanced chip factories in Austin to make processors for vehicles, humanoid robots and space-oriented data centers. That dynamic was reflected in after-hours trading, where Intel shares climbed roughly 3.14% following Musk's comments that Tesla plans to adopt Intel's next-generation manufacturing process for its in-house AI chips. Tesla Lifts Spending For Austin Ambitions On Wednesday, Tesla also raised its 2026 capital-spending plan to more than $25 billion from $20 billion, with Musk saying the higher outlay was needed to support future revenue streams. Musk said, "Given that by the time Terafab scales up, 14A will be probably fairly mature or ready for prime time," adding, "14A seems like the right move, and we have a great relationship with Intel." Tesla reported first-quarter revenue of $22.71 billion, up 16% year-over-year. Revenue missed the Street consensus estimate of $22.39 billion. Analysts See Upside Despite Open Questions Analysts said the announcement matters even with unanswered questions. Ben Bajarin of Creative Strategies told Reuters Intel's 14A "could turn out to be a bigger deal for Intel than folks thought," saying early design partners help refine leading-edge manufacturing and that Tesla "will definitely have scale, so a great first non-Intel customer." Seaport Research Partners analyst Jay Goldberg said, "Having a customer is more important than the timing," and added that even if Musk's robot-driven chip-demand forecasts prove too ambitious, supplying Tesla's current businesses would still mean "real volumes" for Intel. Price Action: Tesla stock was up 0.28% during regular trading and down 0.31% at $386.30 in after-hours trading on Wednesday, according to Benzinga Pro data. TSLA shows a strong 'Quality' score, according to Benzinga Edge Stock Ranking, but faces a negative short- to medium-term price trend. Photo: Frederic Legrand - COMEO on Shutterstock.com Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.
[6]
Elon Musk Tells TSMC's CEO That Terafab Wouldn't Exist if the Foundry Could Keep Up With His Chip Demand
Elon Musk confirms that SpaceX & Tesla will always remain a major customer of TSMC, but the Taiwanese chipmaker alone couldn't fulfill its demand, which is why they started the Terafab project with Intel. Terafab Is Essential To Elon's Ambitious "In-House" Chipmaking Goals, But Says That SpaceX & Tesla Will Remain A Customer of TSMC A few days ago, Lip-Bu Tan (CEO of Intel) and Elon Musk announced their partnership on the ground-breaking Terafab project, which will be responsible for producing custom and in-house chips for Tesla, SpaceX, xAI, and other ventures. The project is expected to begin its first trial run in 2029, producing 3000 wafers per month, which will scale up as the manufacturing process and yields improve. At the same time, Tesla is a major customer of TSMC and Samsung, where its next-gen AI solutions, such as AI5 & AI6, are being made. Elon shared the first pictures of the AI5 chip, freshly taped out of Samsung fabs in South Korea. He also confirmed that plans for the Dojo3 supercomputer are underway, but at some point, the rising demand for AI will prompt firms to open up multiple semiconductor fronts rather than relying on one. Even better is to start your own manufacturing setup, which is what Elon is doing with the Terafab project. During the TSMC Q1 FY26 earnings call, chairman and CEO, C.C. Wei, shared some of his thoughts on the Terafab project, stating that Tesla and Intel are their customers, and Intel is a very formidable competitor too. He also said that there are no shortcuts to building a fab. It takes 2-3 years to build and another 1-2 years to ramp up. So TSMC's chairman has shown that he is unmoved by the Terafab project. To this, Elon Musk replied to Wei's recent statement, and clarified that SpaceX & Tesla will always be major customers of TSMC, and not competitors in the normal sense of the word. He also said Tesla's Terafab project is designed to meet their own demand, rather than opening up a new option for fabless chipmakers. It will only address the shortcomings of the industry, which are expected to grow rapidly in the coming years, leading to a highly constrained fab business. Elon did say that the Terafab project wouldn't be needed if TSMC could make the "Staggeringly" large number of chips his companies required. So see this as a little back and forth, though indirectly. TSMC retains its leading position on the global semiconductor stage, and Elon Musk's Tesla, SpaceX, & xAI are equally important customers for the company. Follow Wccftech on Google to get more of our news coverage in your feeds.
[7]
Intel To Disclose Full Details of Elon's Ground-Breaking TeraFab Project That Will Reshape The Chipmaking Industry
Latest details suggest that Intel is weeks away from unveiling details on Elon's Terafab chipmaking project, which is set to reshape the industry. Dylan Martin of CRN has shared an interesting scoop related to Elon Musk's Terafab project, which is being built in partnership with Intel. Intel plans to disclose to staff the "scope and nature" of its involvement with Elon Musk's ambitious "Terafab" chip manufacturing project in the "coming weeks," according to a memo its CEO, Lip-Bu Tan, sent last week. Tan sent the memo, which was seen by CRN, to Intel employees last Friday, two days after the semiconductor giant announced its involvement with Musk's companies -- SpaceX, xAI and Tesla -- on Terafab, a potential boon to Intel amid its latest turnaround attempt. via CRN In this matter, Intel's CEO himself, Lip-Bu Tan, has sent out an internal memo to Intel Employees which states plans to disclose the "scope and nature" of the project in the coming weeks. This will obviously be highly anticipated given how ambitious the Terafab project is. Just to put things into perspective, the Terafab project will have two phases; one phase is the construction of fabs dedicated to automotive and robotics chips, while the second phase centers around chip production for AI. Tesla just unveiled its ambitious A15 chip, which it has set out to compete against NVIDIA's Hopper and Blackwell offerings. The company also announced that it is working on the next-gen A16 chip, & also the Dojo3 Supercomputer project. The A15 chip is currently being manufactured at TSMC and Samsung, but it will be Tesla's primary goal to shift production in-house at Terafab when it becomes operational. Meanwhile, the Terafab alliance with Elon marks a major deal for Intel and a means to get back in the limelight. Intel itself has been trying to stir up some buzz with its own Intel Foundry plans, aiming to enlist some major players, such as NVIDIA itself. There have been rumors that future chips from NVIDIA may have some production dedicated to Intel's Fabs, while Terafab is likely going to be limited to Tesla, SpaceX, and xAI chip production, exclusively. In the pilot phase, Terafab will reportedly produce around 3000 wafers per month by 2029, and that will be increased gradually as the project scales up. The Terafab project will be responsible for building high-stakes silicon logic, memory, and packaging capabilities, states CRN. So it will be a major deal as Intel shares further updates on this project.
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Tesla CEO Musk says Terafab to use Intel's 14A chipmaking process By Investing.com
Investing.com-- Tesla Inc (NASDAQ:TSLA) CEO Elon Musk said on Wednesday that the Terafab joint venture plans to use Intel's advanced 14A manufacturing process to make semiconductors. Answering an analyst question during Tesla's post-earnings call, Musk said the 14A process was "not yet totally complete," and will be "probably fairly mature or ready for prime time" by the time Terafab "scales up." He did not provide a definite timeline. Intel Corporation (NASDAQ:INTC) shares rose 2.5% in after-hours trade. Get more breaking news on Tesla and SpaceX by subscribing to InvestingPro Intel's 14A chipmaking process is aimed at competing with key rival Taiwan Semiconductor Manufacturing Co (NYSE:TSM), although the American chipmaker is yet to disclose more details on the technology. Musk had unveiled Terafab earlier this year as a joint venture between his companies- SpaceX, Tesla, and xAI- to establish a fully integrated semiconductor manufacturing facility in the United States. The facility is aimed at producing chips specifically for artificial intelligence applications. Musk has set a lofty goal for Terafab to produce 1 terawatt per year of compute- far greater than current global chipmaking capacity, including that of TSMC, the world's largest chipmaker. Intel said in April it will join the venture to provide chipmaking technology, although more details on its involvement remained unclear.
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Tesla's Musk says company plans to use Intel's 14A process for Terafab
April 22 (Reuters) - Tesla's Chief Executive Officer Elon Musk said on Wednesday the company plans to use Intel's advanced 14A manufacturing process to make chips at its Terafab project. Intel's shares rose 2.8% in extended trading. Intel joined Musk's Terafab AI chip complex earlier this month with SpaceX and Tesla to make processors to fuel the billionaire's robotics and data center ambitions. "Given that by the time Terafab scales up, 14A will be probably fairly mature or ready for prime time, 14A seems like the right move, and we have a great relationship with Intel," Musk said during Tesla's earnings conference call. The move could boost investor confidence in Intel's next generation manufacturing process after the firm has previously struggled with yields for its chips. (Reporting by Zaheer Kachwala in Bengaluru; Editing by Pooja Desai)
[10]
Musk's staff reaches out to suppliers for Terafab project, Bloomberg News reports
April 15 (Reuters) - Elon Musk's staff have reached out to chip industry suppliers for his Terafab AI chip complex project with SpaceX and Tesla, Bloomberg News reported on Wednesday. The team has approached companies including Applied Materials, Tokyo Electron and Lam Research, and has asked chip manufacturing partner Samsung Electronics Co for support, the report said, citing people familiar with the matter. Staff have sought price quotes and delivery times for an array of chipmaking gear, Bloomberg said, adding that in the past few weeks, they've contacted makers of photomasks, substrates, etchers, depositors, cleaning devices, testers and other tools. The goal is to begin silicon manufacturing by 2029 and then scale up, Bloomberg added. Musk's representatives have asked for speedy price estimates while providing minimal information about the products, and Musk wants to move at "light speed," according to the report. Reuters could not immediately verify the report. Tesla, SpaceX, Applied Materials, Tokyo Electron, Lam Research and Samsung Electronics did not immediately respond to requests for comment. Musk launched Terafab in March, and Intel last week said it would join the project to make processors powering the tech billionaire's robotics and data center ambitions. The project will be built on the Tesla campus in eastern Travis County, Austin, Texas. (Reporting by Chandni Shah in Bengaluru; Editing by Sonia Cheema)
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Elon Musk announced that his Terafab chip manufacturing venture will adopt Intel's 14A process technology to produce AI chips. Tesla will build a $3 billion research facility in Austin processing thousands of wafers monthly, while SpaceX will handle high-volume chip manufacturing. This marks Intel's first major external customer for 14A technology, a critical win for its struggling contract manufacturing business.
Elon Musk confirmed during Tesla's earnings call that Terafab plans to use Intel's 14A process technology when the chip manufacturing venture reaches production capacity later this decade
1
. "We plan to use Intel's 14A process, which is state-of-the-art and in fact not yet totally complete," Musk stated, adding that by the time Terafab scales up, the 14A manufacturing process will likely be mature and ready for deployment3
. The announcement represents Intel's first major external customer for its next-generation fabrication node, a breakthrough for Intel's contract manufacturing business that has struggled to compete with TSMC3
.
Source: Wccftech
Musk outlined a clear division of labor for the ambitious semiconductor manufacturing project. Tesla will construct and operate a research facility at its Gigafactory Texas campus in Austin, with an estimated capital spending of around $3 billion
1
. This pilot line will process a few thousand wafers per month and serve as a testing ground for experimental ideas in semiconductor manufacturing and validating production processes1
. SpaceX will handle high-volume chip manufacturing at a separate facility, though coordination between the two companies introduces challenges requiring board approvals and conflict-of-interest reviews1
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Source: Tom's Hardware
The Terafab team has contacted major chip industry suppliers including Applied Materials Inc., Tokyo Electron Ltd., and Lam Research Corp., requesting price quotes and delivery times for chipmaking equipment
2
. Staff working on the joint venture have sought equipment ranging from photomasks and substrates to etchers, depositors, and testing tools, with requests to move at "light speed"2
. The project aims to produce cutting-edge chips for artificial intelligence, humanoid robots, and space data centers, with a goal to supply one terawatt of annual computing capacity—double the current U.S. output3
. However, Bernstein analysts estimate the project would require $5 trillion to $13 trillion in capital expenditure2
. For context, this is a significant undertaking.Intel shares rose 3.6% in extended trading following Musk's announcement
3
. Intel CEO Lip Bu Tan has previously stated the company would exit chip manufacturing altogether if it failed to secure an external customer for its advanced processes3
. While Intel has spent billions attempting to catch up to Taiwan's TSMC, it had not publicly confirmed any customers for Intel's 14A process technology, which remains under testing4
. Ben Bajarin of Creative Strategies noted that Intel's 14A "could turn out to be a bigger deal for Intel than folks thought," emphasizing the importance of early design partners for refining leading-edge manufacturing3
.
Source: FT
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While Musk expressed great respect for Intel's leadership team and technology, he has not explicitly mentioned licensing arrangements
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. The relationship likely involves either licensing the fabrication node for integration at Terafab facilities or a partnership arrangement where Intel participates directly. The goal is to begin silicon manufacturing by 2029 and then scale up production2
. Historically, chipmakers have licensed process technologies when unable to develop their own nodes on time, as GlobalFoundries did with Samsung's 14nm-class processes in 2014-20151
.Musk emphasized that without Terafab, he doesn't see a path to having enough processors given the rate at which AI infrastructure is growing
4
. The semiconductor industry faces a severe crunch in memory chips as hyperscalers like Amazon and Alphabet expect to spend approximately $650 billion this year building data center infrastructure2
. The shortage is beginning to impact AI accelerators and advanced AI semiconductors needed for xAI, Tesla's autonomous vehicles, and SpaceX's space-based computing ambitions2
. Seaport Research Partners analyst Jay Goldberg noted that even if Musk's ambitious robot-driven chip demand forecasts don't fully materialize, supplying in-house AI chips for Tesla's existing businesses would still represent "real volumes" for Intel5
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