How Elon Musk's Texas Terafab will Make AI Chips | Manufacturing Digital
Elon explained: “We're still working out the details of the Terafab deployment. "In the near term, Tesla will be building the research fab on our Giga Texas campus.
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Elon explained: “We're still working out the details of the Terafab deployment. "In the near term, Tesla will be building the research fab on our Giga Texas campus.
6) Tesla, SpaceX, and xAI committed to using Intel’s 14A process for the Terafab project, confirmed by Elon Musk on Tesla’s Q1 call, where he called it “state of the art.” This is the first major external 14A customer announcement and arrives ahead of management’s prior timeline, which had pointed to firm customer decisions beginning in H2 2026 and extending into H1 2027.
Intel announced earlier this month that it will be joining Musk's Terafab chip complex in Austin, Texas, to help "design, fabricate, and package ultra-high-performance chips at scale" for SpaceX, xAI and Tesla.
SpaceX will manage the initial phase of the larger-scale Terafab build. The motivation: Musk sees no path to sufficient AI chip supply at the volumes Tesla needs without making its own silicon.
Intel is aggressively looking for external customers for its foundry business and recently announced a deal with Tesla for Terafab. Lip-Bu Tan, Chief Executive Officer of Intel, appears at an event organized by the company.
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On the same Austin campus, Tesla is building a $3 billion research fab dubbed Terafab, where it plans to manufacture AI chips using Intel’s forthcoming 14A process technology. Musk cited concerns about supply constraints from external vendors ...
PALO ALTO, California -- Tesla founder and CEO Elon Musk unveiled at a Tesla earnings call Thursday that a joint venture of Musk-led companies intends to use U.S. chipmaker Intel's advanced chipmaking technology for its ambitious Terafab facility, ...
Tesla, SpaceX and xAI are building the $20–25 billion Terafab chip factory. Intel joined the project on 7 April 2026.
Elon Musk’s Terafab AI chip project in Austin, Texas, is gaining a crucial new partner: Intel. On Tuesday, the American chipmaker announced it was signing on to help design and build the sprawling facility, which would supply AI chips to Musk’s ...
Tesla CEO Elon Musk announced a plan to invest approximately $3 billion to construct a chip research, development, and pilot production facility within the Giga Texas campus, as part of its ambitious "Terafab" initiative. The project will utilize Intel's most advanced 14A process technology, ...
SpaceX, Musk’s rocket company, will lead the charge on the early phases of the broader project, known as Terafab, he said. Intel Corp. has signed on to support the effort, positioning itself as a partner that can contribute its chip design, fabrication and packaging expertise. “What we’ve figured out thus far is Tesla’s doing the research fab,” Musk said.
Intel has invested heavily in its foundry division to compete directly with Taiwan Semiconductor Manufacturing, the world’s top contract chipmaker, and other major rivals, such as Samsung. However, differences in manufacturing technology have made it hard for Intel to attract large outside clients. The TeraFab deal with Tesla and a government equity stake have helped support Intel’s turnaround story, but a confirmed deal with Apple would be a much bigger sign of success for Intel’s foundry goals
In March 2026, Tesla, SpaceX, and xAI jointly announced Terafab: a semiconductor fabrication complex in Austin, Texas, with an estimated budget of $20 to $25 billion.
It is reported that xAI plans to increase the level of GPU usage to 50%, but no specific timeframe has been mentioned. The key changes are expected to come from infrastructure improvements and software optimisation. In addition, the company is considering renting out some of its computing power to external customers. In the long run, Musk is betting on the TeraFab project, which involves the development of his own artificial intelligence solutions.
xAI wants to lift utilisation to 50 per cent, with the fixes expected to land in infrastructure and software stack tuning rather than another round of shiny new GPUs. There is talk it could rent out chunks of its fleet, while it shifts future workloads towards systems better suited to agentic AI. Musk is still pushing the TeraFab idea, building in-house silicon under its “AI” family label and leaning on Intel’s 14A process for future xAI, SpaceX and other projects, assuming the code stops trippi
And what might be the best news Intel has received in some time – Elon Musk recently confirmed that his SpaceX/Tesla/xAI Terafab project will use Intel Foundry’s 14A fabrication technology.
XAI will likely offer rental services for its massive GPU fleet as it rolls over future workloads to hardware that drives the Agentic AI requirements. On that front, Musk is going all in on the TeraFab project, designing multiple in-house silicon ...
SoftBank put in $2B. In April 2026, Intel joined Elon Musk’s Terafab project in Texas — the chip-manufacturing venture between Tesla, SpaceX, and xAI targeting one terawatt of compute per year.
In Texas, production of the Cybercab ... driverless operation. The most audacious piece of the puzzle, however, is Terafab—a research fab on the Giga Texas campus with an investment of roughly $3 billion....