When Elon Musk announced the Terafab project a few weeks ago – costing about $5 trillion. the vision of mass production of chips, many of which would later be placed in orbit aboard Starship rockets – it was clear that if it is to get off the ground at all, the head of Tesla and SpaceX will need partners. The production of advanced semiconductors simply cannot be started from scratch without the involvement of someone who, as the colloquial saying goes, has learned how to do it, because it is the most complicated thing that humanity is currently doing. Tesla has been designing its own systems for years (some of them very impressive, such as Tesla Dojo), but the path from chip design to their production is long and winding.
Elon Musk's most likely partners seemed to be IBM and Samsung. IBM cooperates with the Japanese Rapidus in developing 2 nm technology and chiplet packaging, so it already has experience in this type of ventures. Samsung, in turn, because it signed a large contract with Tesla for the production of AI6 chips, is developing a factory in Texas near the place where Musk's first factory is to be built, and remains the only large player that combines the business of silicon logic production with its own memory production. This is why Intel being the first announced partner for the Terafab project comes as a surprise — although of course he didn't come out of nowhere at the negotiating table and it's not certain that he won't be joined in the future by one of the two mentioned above.
Loud declarations, but no specifics
However, although general declarations were made and Intel repeated its vision of future production of 1 TW of computing power per year, no specific details emerged. Neither Intel's entry nor the comment by Lip-Bu Tan, the company's CEO, explains what exactly this partnership covers – whether Intel would be the factory operator, a technological partner, the contractor of selected stages, or just a company that will provide some competences and infrastructure. There have also been no official documents submitted to American offices. And this is what is most important today: the scale of the announcement is large, but its practical scope remains vague.
Despite this lack of specifics both sides are certainly very keen for them to appear over time. As mentioned above, Elon Musk needs a technology partner if he actually plans to start his own chip production this decade. When announcing the project, Terafab mentioned that it wanted to integrate the production of processors, memory, lithographic masks and chip packaging in one place, and Intel has current competences in two of these four areas and once also produced computer memory.
For Intel, this cooperation also has significance beyond one investment. In practice, it is another element of the attempt to rebuild the company's positionwhich has been losing technological advantage and market share for years. Entering Musk's project gives Intel something very valuable: a loud partner, a big narrative around AI and a chance to show that its manufacturing competences are still strategically needed. Even if Tesla's space ambitions are brought down to earth, simply experimenting with integrating different stages of chip production in one place could be of enormous value and potentially irrevocably change the entire multi-billion dollar semiconductor market.
After the cooperation was announced, the company's shares increased by over 4 percent on Tuesday.so it is clear that the market liked this partnership – although the scale of growth suggests that this is still not the kind of breakthrough that investors are really waiting for.
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For now, Terafab remains more of a promise than a plan, and cooperation with Intel remains more of a signal than a ready-made operational model. For Musk, it is a partner without whom his semiconductor vision would look completely unrealistic, and now at least he has a starting point. For Intel, this is an opportunity to show that it can still play an important role in the world's most ambitious technology projects. The problem is that both companies have only done the easy part: they announced their cooperation. Now they have to explain what it actually means.
