Intel to join Elon Musk's Terafab

Intel is joining the Terafab project: "Intel is proud to partner with SpaceX, xAI and Tesla on the Terafab project to redefine semiconductor manufacturing technology," the company writes on X. Intel CEO Lip-Bu Tan and Elon Musk discussed the plans over the weekend.

Musk wants to build a huge semiconductor complex that will handle most of the chip production steps. The most complex components are a semiconductor plant and subsequent processing (packaging). The whole thing should be able to produce AI accelerators that reach a computing capacity of one terawatt per year. Analysts estimate the necessary costs at five trillion US dollars.

Intel Foundry offers itself

Since SpaceX, xAI and Tesla cannot establish modern manufacturing technology without years of expensive development, partners are necessary. For the most modern manufacturing technology for logic chips, only TSMC, Samsung and Intel Foundry are still in the running. They all also have considerable packaging know-how, for example in assembling multiple chiplets on a common substrate.

As exaggerated as the project sounds, Intel is likely to be the most interested of the three manufacturers in participating. The Foundry division has been desperately seeking major customers for its own semiconductor plants for years. Even if nothing comes of the construction, Intel could welcome Musk's companies as customers in the future. That would be a potential lifeline for Intel Foundry. If external customers are also absent with the next process generation 14A, Intel is considering ending the Foundry division.

However, Elon Musk also wants to manufacture memory in the Terafab. DRAM and logic chips are manufactured differently. For a memory cooperation, only the world market leaders Samsung, SK Hynix or Micron would be suitable. However, these are swimming in money due to the memory crisis – it is questionable how much interest they have in the Terafab project.

(mma)