Musk to Spend $3 Billion to Build a Research-Focused Chip Factory, with Chip Project Expected to Use Intel Technology

Source: Global Market Report

Tesla CEO Elon Musk stated that the company plans to spend about $3 billion to build a research chip factory in Texas.

During the company’s quarterly earnings call on Wednesday, Musk revealed that the research facility will be built within the existing Texas Gigafactory campus. The factory will only produce a few thousand wafers each month and will serve as a platform for testing new technologies and processes.

Musk said that SpaceX will lead the early stage of a larger chip project called Terafab. Intel has signed up to support the project as a partner, providing its expertise in chip design, manufacturing, and packaging.

Musk said, “So far, what we’ve clarified is that Tesla is responsible for the research chip factory, and SpaceX is responsible for the initial phase of Terafab. As for the rest, we’ll continue to study.”

Terafab is Musk’s ambitious plan to advance chip manufacturing, with teams from Tesla, SpaceX, and his artificial intelligence company xAI all participating in the project.

Musk stated that the goal of Terafab is to secure enough chip supply for his companies, as foundries like TSMC and Samsung Electronics will not be able to meet such demand.

During the call, Musk was asked to elaborate on Intel’s participation. He replied that the plan is to use Intel’s most advanced process, 14A. This process currently has not received any customer orders. This remark pushed Intel’s stock price up by about 3% in after-hours trading on Wednesday.