Intel joins Musk's "Terafab," collaborating to build a 1-terawatt-level AI computing empire.

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Intel announced it is joining Musk’s "Terafab" project, with both parties cooperating to advance semiconductor manufacturing and high-performance chip R&D. This move opens an important window for Intel’s long-sought foundry business.

Intel announced this collaboration on Tuesday via Musk’s social media platform X.com, and revealed plans to work with SpaceX, Tesla, and Musk’s artificial intelligence company xAI.

Intel stated that its capabilities in chip design, manufacturing, and packaging will help "Terafab" achieve its annual production target of 1 terawatt of computing power, providing computing support for the future development of AI and robotics technology.

This collaboration is highly significant for Intel. The chip giant has been seeking external foundry customers for years, yet has not announced any substantive agreements until now. Cooperating with Musk’s enterprises could become a crucial breakthrough for the expansion of its wafer foundry business. After the news was released, Intel’s stock price rose about 2.5%, to $52.05.

Details of the Collaboration Await Clarification

Despite Intel’s high-profile announcement, this statement remains vague regarding specifics.

Intel did not disclose its specific role or position in the "Terafab" project, nor did either party announce any financial terms or contract scale. Only mentioning Intel’s participation leveraging its integrated capabilities in design, manufacturing, and semiconductor packaging.

In fact, this cooperation had been hinted at earlier. At last month’s annual Tesla shareholders’ meeting, Musk had publicly stated he might cooperate with Intel to build a semiconductor factory dedicated to his companies, but said at the time that no agreements had yet been signed.

Now, with Intel’s official announcement, it marks a shift from public statements to substantial progress in the relationship between the two parties.

A Key Point for Intel’s Foundry Strategy

This collaboration holds special strategic value for Intel’s foundry business.

Recently, Intel has been actively promoting a transformation into wafer foundry, seeking external customers to utilize its factories for their own chip production. However, progress has been slow, and no publicly disclosed foundry contracts have been secured so far. Intel previously stated that potential customers are expected to make procurement decisions by the end of this year or early next year.

Musk’s enterprises span electric vehicles, aerospace, artificial intelligence, and other domains requiring high computing power, and their demand for custom chips is considerable.

If the "Terafab" project proceeds as planned, Intel may be able to use it to establish its first flagship case for its foundry business, breaking free from the long-standing dilemma of lacking external customers, and proving to the market that its manufacturing capabilities are sufficient to meet the chip needs of top tech companies.

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