Intel CEO Lip-Bu Tan said on Tuesday that the chipmaker would “work closely” with Elon Musk to support the billionaire entrepreneur’s Terafab project, a potentially massive chip development and production operation to be developed jointly by SpaceX and Tesla. AND photo posted on the official Intel X account shows two executives shaking hands last weekend in front of a gigantic Intel sign. Musk’s 1-terawatt, ultra-efficient chip-making facility, which could span multiple sites, could cost billions of dollars.
“Terafab represents a step change in the way we build silicon logic, memory and packaging in the future,” Tan – wrote in a post on social media. “Intel is proud to be a partner and work closely with Elon on this highly strategic project.”
It is unclear how Tan and Musk plan to implement such an ambitious endeavor. Musk was talk about the need to develop so-called Terafab over many months, seeing the venture as a way to produce the immense numbers of chips his companies will need for cars, robots and data centers. Some chip industry analysts do very skeptical that Musk can implement such a elaborate and capital-intensive venture.
Meanwhile, Intel is trying to re-enter the market after years of stagnation, and part of its effort includes opening up its advanced semiconductor production capacity to tech companies hungry for chips to fuel the artificial intelligence boom. As WIRED recently reported, Intel’s ability to secure external customers is critical to its success. And Musk could be a huge customer whale.
Musk did not respond to WIRED’s questions about the partnership. An Intel spokesman referred to WIRED’s social media posts about the deal and declined to comment further. For now, five outstanding questions remain about how Intel’s involvement might affect Terafab’s chances of success.
How large is the “deal”?
It’s strenuous to say. Neither Intel nor Tesla has filed any documents with the U.S. Securities and Exchange Commission, which are typically required if a recent partnership or transaction materially changes a public company’s capital investment or production capacity.
For example, when chipmakers AMD and Meta announced a “multi-year, multi-generational” partnership in February to deploy up to 6 gigawatts of AMD GPUs for Meta’s AI services, AMD disclosed the deal in an SEC filing. At press time, no such forms have yet been filed by Intel or Tesla. This means Tan and Musk mostly agree on handshakes and vibes these days. As someone in the chip industry put it: “That’ll be quite a headline for a few days, right?”
What is Intel’s actual contribution?
Intel’s public statement about its merger with Musk is almost comically vague. The company said its “ability to design, manufacture and package ultra-high-performance chips at scale” will facilitate accelerate Terafab’s goal of producing 1 terawatt of computing power per year to support “future advances in artificial intelligence and robotics.”
Pat Moorhead, a longtime chip industry analyst and founder of Moor Insights & Strategy, predicts that Musk will initially rely on Intel for advanced packaging capabilities. He notes that Tesla “doesn’t need it [chip] design engineering; they are already very capable of it.” Moorhead adds that Musk may also want to license Intel’s chip architecture, which Terafab could build and adapt on.
Intel supporting advanced packaging is a protected bet in the near future because it gives all companies involved a chance to test their partnership without discouraging TSMC, which runs the largest factories in the world, Moorhead says. “If you do the packaging first, you won’t infuriate TSMC as much as you would if you used Intel technology to make wafers,” he says. (Tesla already partners with TSMC and Samsung on chips.)