Intel Teams Up with Tesla to Advance Terafab Fab Initiative
According to Intel, the company announced on April 7 that it will collaborate with Tesla, SpaceX, and xAI to join Elon Musk’s large-scale wafer fabrication initiative, Terafab. The announcement helped lift Intel’s share price by more than 2% in early trading the same day.
In a post on its official X platform account, Intel stated that its capabilities in designing, manufacturing, and advanced packaging of high-performance chips will support Terafab in accelerating its goal of producing chips capable of delivering 1TB of compute annually, targeting future applications in artificial intelligence and robotics.
Elon Musk previously revealed plans to build two advanced semiconductor fabs in Austin, Texas, through his companies SpaceX and Tesla. One facility will focus on supplying chips for electric vehicles and humanoid robots, while the other will support AI data centers for space-related applications. SpaceX has also been integrated with the social media platform X and AI company xAI as part of a broader ecosystem strategy.
Intel also disclosed that it hosted Musk at its facilities over the weekend, sharing a photo of CEO Lip-Bu Tan alongside Musk, signaling closer strategic alignment between the companies.
According to a Reuters report, SpaceX outlined details of its upcoming initial public offering (IPO) during a meeting with banking partners on April 6. The plan includes allocating a significant portion of shares to retail investors and hosting a large-scale investor event for approximately 1,500 participants in June following the IPO roadshow launch.
During the meeting, SpaceX CFO Bret Johnsen emphasized that retail investors will form a “core component” of the IPO, with a higher allocation than seen in most historical listings. This approach is intended to reward long-term supporters of SpaceX and Musk.
For Intel, which has faced increasing pressure in the global AI chip race, this partnership represents a strategic opportunity to rebuild investor confidence as its transformation efforts begin to show results. Rising demand for processors has already contributed to an improvement in its financial performance.
Intel is also accelerating development in advanced chip packaging technologies and is reportedly in discussions with at least two major technology companies to secure related contracts. According to U.S. media reports, these companies include Google and Amazon, both of which design custom chips while outsourcing portions of their manufacturing. Representatives from both companies declined to comment, and Intel stated it does not comment on specific customer relationships.
Since taking office more than a year ago, CEO Lip-Bu Tan has implemented aggressive restructuring measures, including workforce reductions and asset divestitures, aimed at strengthening Intel’s financial position. In addition, Intel has secured multi-billion-dollar investments from Nvidia and the U.S. government, with the latter now reportedly its largest shareholder.
