Intel will remain part of Elon Musk's Terafab project, Chief Executive Lip-Bu Tan told reporters on Wednesday, according to Bloomberg. Tan spoke prior to an Intel event in Japan commemorating the company's presence there. Back in April, Intel and Terafab announced that the new venture would use Intel's next-generation 14A fabrication process to make chips. The details of the collaboration are still unknown, but there is a general understanding that Intel will license its manufacturing technology to Terafab, though it is unclear whether it will also help ramp up production using the node.
Around the same time, Elon Musk debunked rumors that his companies would invest in Terafab and then partner with TSMC for construction and operation. "No, we will build and run the fab," Musk wrote on X. "Let there be ZERO doubt about that. Maybe TSMC subleases part of the Terafab if they want, but nothing more than that."
Offering TSMC, the world's largest foundry with aggressive plans for about 10 new fab phases, the chance to sublease part of Terafab is an unusual arrangement. Semiconductor fabs are not generic facilities; converting part of Terafab for TSMC's processes would require different equipment, materials and contamination controls. If Intel licenses 14A technology to Terafab, the agreement would likely contain extensive provisions governing access to Intel IP, process information and personnel. Putting TSMC engineers and operations inside the same facility could create contractual and IP-isolation issues, even if TSMC never directly touches the Intel production line.
The Terafab project, described as a massive 100-million-square-foot manufacturing facility with initial capital investment of $16.8 billion, is expected to exclusively supply Tesla, SpaceX and xAI. The involvement of both Intel and possibly TSMC raises questions about how such a multi-customer, multi-process fab would operate.