Intel CEO Lip-Bun Tan with Elon MuskImage: IntelThe Terafab project announced in March is an endeavour on a larger scale than any chip fabrication plant built to date. Valued at $20 to $25 billion, the project aims to produce chips with a total computing capacity of one terawatt per year. One of the plants will manufacture semiconductors for Tesla’s Full Self-Driving system and the Cybercab robotaxi programme, as well as for humanoid robots, while the other will supply chips for artificial intelligence data centres in space. The facility will integrate all stages of semiconductor production under one roof: chip design, lithography, fabrication, memory production, advanced packaging, and testing.For comparison: the entire USA currently produces around half a terawatt of chips annually. Furthermore, Musk’s target equates to approximately 70% of the total current global output of TSMC, the world’s largest chip manufacturer. Additionally, consolidating all production steps in one location is highly unusual.The Terafab project is thus extremely ambitious. Since its announcement, experts have questioned how Tesla and its partners plan to establish the two plants without significant in-house expertise in chip production. The answer is clear: the Musk companies do not intend to do so alone but are bringing Intel on board.Intel, for its part, is entering the partnership with confidence, describing its role as follows: “Our ability to design, fabricate, and package ultra-high-performance chips at scale will help accelerate Terafab’s aim to produce 1 TW/year of compute.”The alliance with Tesla and its partners could prove to be a game-changer for Intel. The former market leader in chip production, which has since been overtaken by AI specialist Nvidia and Taiwanese contract manufacturer TSMC, aims to reinvent itself—and this deal could help it close the gap with TSMC and Nvidia once again.According to the portal Electrek, Terafab would be precisely the customer Intel has been seeking for its relatively new Intel Foundry division, the contract manufacturing arm that propelled TSMC to prominence.Intel CEO Lip-Bu Tan is highly optimistic about Elon Musk’s venture, stating, “Elon has a proven track record of reimagining entire industries. This is exactly what is needed in semiconductor manufacturing today.”linkedin.com, electrek.co, reuters.com
