If you haven’t yet heard of Terafab, we’ll give you some basics. Elon Musk has been trying to get into chip manufacturing for a while now. We even thought at one point that he was interested in buying Intel. Last month, he announced plans for a giant semiconductor factory, housed in a joint venture between Tesla, SpaceX and xAI. Musk starts from an observation that is as simplistic as it is implacable: the needs for chips for AI (and his own as a priority) cannot be met by existing foundries (TSMC, Samsung, Intel…). Quite simply because they cannot scaler quite quickly.
Terafab: Will Elon Musk also shake up the world of chips?
Musk wants to produce 1 terawatt (TW) of computing power per year, much more than the current global production of AI chips. These chips will power tons of humanoid robots, satellites, its autonomous vehicles and xAI’s infrastructure. We might as well say it very clearly, the production objective that Elon Musk is aiming for is, according to analysts, either “very ambitious†or “totally delusional†. It is indeed a project which will require an enormous mobilization of resources (and not just financial). Better (or worse depending on opinions), the boss wants to integrate everything vertically (design, chip manufacturing, HBM memory and advanced packaging under the same roof). But the animal still has, whatever one may think of it, a certain capacity to disrupt industries and make experts lie. And at least he makes us dream and sometimes laugh. Bringing everything together within a single physical structure could speed up development by allowing engineers to design, test and modify chips more quickly. Here again, it’s a recipe that the guy knows well.
Intel opportunistic or visionary?
Where things start to pick up is when Intel announces that it is getting on board with the project. This company that some announced was dead, the same tech company that left the keys to accountants for years and which is joining forces in this crazy project! An announcement which adds yet another layer of uncertainty. Will Terafab build its infrastructure from scratch or use Intel’s existing facilities like the 18A and 14A processes? The Intel boss not only posed for the photo, he also shared, in a way, his enthusiasm. And for details, he is not an accountant but a veteran of the semiconductor industry.
Elon has a proven track record of re-imagining entire industries. This is exactly what semiconductor manufacturing needs today. Terafab represents a step change in the way silicon management, memory and packaging will be built in the future (Intel CEO Lip-Bu Tan).
It is also an important signal for Intel to get involved in such a project, confirming its return to the forefront. We can also see that it is yet another stone in the ambition to relocate cutting-edge industries to US territory. Frankly, we are curious and enthusiastic because one thing is certain: if the world of chips is boring to death, with Musk that will not be the case!
