Intel Foundry might have witnessed its latest breakthrough, as Intel announced plans to join Tesla's TeraFab project, aiming to deliver 1 TW of compute capacity per year.
Intel's Joining of Tesla's TeraFab Venture Could Bring 18A Directly To the Upcoming Production Lines
This is a surprising development, but one that we have been expecting for quite some time now. Tesla's TeraFab project was detailed extensively by Musk a few days ago, with the highlight being the facility's production scale, which Tesla's CEO revealed. However, given that Tesla doesn't have a node IP or semiconductor industry experience, we anticipated a joint venture with existing foundries, and it seems Intel has been chosen. The news of Intel collaborating with Tesla's TeraFab project was shared on the company's official X page.
For those unaware, we have been discussing a potential Intel-Tesla collaboration for quite some time now, as the two parties share a common goal: advancing America's manufacturing ambitions. The general intent of the TeraFab project has been to reduce reliance on entities like TSMC and instead build domestic semiconductor production lines capable of producing chips at a scale several times higher than the current fab network. The TeraFab plans extend beyond Earth, with potential space deployment of production, but for now, we'll talk about how the partnership could pan out.
Elon has a proven track record of reimagining entire industries. This is exactly what is needed in semiconductor manufacturing today. Terafab represents a step change in how silicon logic, memory and packaging will get built in the future. Intel is proud to be a partner and work closely with Elon on this highly strategic project.
- Intel's CEO Lip-Bu Tan
Elon Musk had already shown intentions to produce 2nm chips with its TeraFab project, and, having no prior semiconductor experience, it was certain that Tesla couldn't do it on its own. There were expectations of a joint venture, likely a licensing agreement where a partner foundry would provide relevant process technology, while Tesla would finance and set up the infrastructure required for production, and this is exactly what has happened with the Intel Foundry deal. And, here's what Tesla could actually do with Intel's processes.
We do know that 18A has been in production at Fab 52 in Arizona since Q4 of last year, which implies that America has the necessary ecosystem in place for cutting-edge chip production. What we can see is that Intel helps Tesla set up the Austin facility, adapting it to Team Blue's foundry model, which will then allow mass production to be achieved much more quickly. With that, 18A would be licensed for production, either under the same branding, or maybe a revised design, depending upon how Tesla wants the AI6 chips to look like.
We don't know how the agreement will turn out regarding the revenue share of chips produced at the facility, but we will have to wait and see for more details. Apart from prospects of 18A production, we could also see EMIB and derivatives being produced in Texas.
The Intel-Tesla deal essentially secures two important grounds: the need for a 'total' domestic manufacturing stack and the fundamental structure for setting up the TeraFab project. It would be interesting to see how this partnership plays out moving forward, but for now, the semiconductor industry is in for exciting times.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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