U.S. chipmaker Intel said on Tuesday it would join SpaceX, xAI, and Tesla to help build Terafab, an ambitious plan to construct a series of large semiconductor fabs to produce chips for robotaxis, humanoid robots, and solar-powered data centers in space.
“Our ability to design, fabricate, and package ultra-high-performance chips at scale will help accelerate Terafab’s aim to produce 1 terawatt a year of compute to power future advances in AI and robotics,” Intel wrote in a post on X. The company also posted an image of Musk with Intel CEO Lip-Bu Tan, and said that Musk had visited Intel over the weekend.
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Intel said it would help Musk’s companies “refactor” silicon fab technology, with Tan describing Terafab as a “step change” in chip manufacturing. “This is exactly what is needed in semiconductor manufacturing today,” he wrote. However, Intel did not provide further details about the partnership.
The collaboration builds on plans unveiled last month, when Musk outlined Terafab as a large-scale initiative to produce high-volume semiconductors for Tesla’s robotaxis and Optimus robot, alongside a specialized chip optimized for space. These chips are expected to support SpaceX’s proposed network of up to a million AI data centers in orbit.
Building semiconductor fabs is widely regarded as one of the most complex industrial undertakings, with only a handful of companies, including TSMC and Intel, possessing the expertise and infrastructure required to manufacture chips at scale. Against this backdrop, Terafab’s ambitions stand out, particularly its goal of producing 1 terawatt of AI compute per year. Running that level of compute continuously for a year would consume roughly twice the United States’ annual electricity use.
Musk has also emphasized that Terafab aims to integrate every stage of chip design, production, and validation within a single ecosystem. The project proposes manufacturing both logic and memory chips in the same facility, a departure from standard industry practices that introduces additional technical and operational challenges.
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Explaining the motivation behind the initiative, Musk said that existing semiconductor production capacity is insufficient to meet the growing demands of artificial intelligence and robotics across his companies. “We either build the Terafab or we don’t have the chips, and we need the chips, so we build the Terafab.” He has also noted that current global chip output would satisfy only a small portion of projected future requirements.
Musk further highlighted the need for specialized hardware designed for extreme conditions, particularly in space-based applications. A high-power chip “designed for space that takes into account the harsher environment,” he said, is essential for the project’s long-term vision. “I know fabs are really hard, I don’t think they’re easy, but we do a lot of hard things,” Musk said.