Intel Corp is joining Elon Musk’s long-shot effort to develop semiconductors for Tesla Inc, Space Exploration Technologies Corp and xAI, marking a surprising twist in the chipmaker’s comeback bid.
Intel would help the Terafab project “refactor” the technology in a chip factory, the company said on Tuesday in a post on X, Musk’s social media platform. That is a stage in the development process that typically helps make chips more powerful or reliable.
The chipmaker’s shares jumped 4.2 percent to US$52.91 in New York trading on Tuesday.
Photo: Annabelle Chih, Bloomberg
The Terafab project is a grand plan by Musk to eventually manufacture his own chips for robotics, artificial intelligence (AI) and space data centers. The endeavor aims to produce a huge amount of computing power each year — about 1 terawatt of capacity annually.
Tesla already designs its own chips, but Musk’s companies have never made them. Now, he is envisioning doing that at a scale to rival the leading chip manufacturer, Taiwan Semiconductor Manufacturing Co (台積電).
“Terafab represents a step change in how silicon logic, memory and packaging will get built in the future,” Intel chief executive officer Lip-Bu Tan (陳立武) said in a separate X post. “Intel is proud to be a partner and work closely with Elon on this highly strategic project.”
“Our ability to design, fabricate and package ultra-high-performance chips at scale will help accelerate Terafab’s aim to produce 1 TW per year of compute to power future advances in AI and robotics,” Intel added.
Musk said last month that the Terafab project would be built in Austin, Texas, and jointly run by Tesla and SpaceX. He serves as chief executive officer at both companies.
For California-based Intel, the move is the latest attempt to restore its status as a leading chipmaker.
Tan, who took the helm in March last year, is working to rebound from years of shrinking market share and declining sales. Most critically, the company lost its long-held technological edge.
Tan spent much of last year cutting jobs and other costs, aiming to get Intel’s financial house in order, but he also attracted key investments — from the US government, Nvidia Corp and Softbank Group Corp — that put it on a more solid footing.
Last week, Intel agreed to pay US$14.2 billion to buy back half of a plant in Ireland that it had previously sold to Apollo Global Management LLC.
The move was seen as a sign of confidence in the chipmaker’s business.
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