Tesla’s CEO Elon Musk revealed during a financial conference call on Wednesday (April 22) that the company plans to invest around $3 billion to build a research-oriented semiconductor fab in Texas for its joint venture subsidiary Terafab. This project will utilize Intel’s most advanced 14A process technology with the aim of establishing a factory capable of producing one million wafers per month.
Musk mentioned that the semiconductor fab will be situated within the existing grounds of Tesla’s Texas Gigafactory. Initially, the facility will only be able to produce a few thousand wafers per month, serving primarily as a technological testing ground to enhance chip manufacturing processes.
According to Musk, the current plan is for Tesla to handle the semiconductor fab development, while SpaceX will oversee the initial construction of the large-scale Terafab plant, with further details yet to be resolved.
When questioned about Intel’s involvement in the project, Musk confirmed that Intel has agreed to support the initiative and will serve as a key partner contributing chip design, manufacturing, and packaging technologies.
He expressed, “Intel is pleased to collaborate with us on core manufacturing technology, and we are planning to utilize their cutting-edge 14A process technology.” Musk added that although the 14A technology is still in progress, “considering the completion of the large Terafab plant, the 14A technology should be fairly mature or ready for mass production.”
Musk has previously stated that Terafab’s objective is to secure sufficient AI chips to meet the significant demand of its affiliated companies, a capacity that current foundries like TSMC and Samsung Electronics cannot fulfill.
During the meeting, Musk emphasized that “any internal matters of Terafab must receive approval from the SpaceX and Tesla boards, and must pass through conflict of interest avoidance mechanisms. This is essentially our consensus.”
Terafab is an AI chip company established as a joint venture by Tesla, SpaceX, and xAI in March of this year. Upon completion of the massive semiconductor fab, the total construction cost is estimated to be as high as $25 billion, with a projected annual supply of 1 terawatt (1TW) of AI computing power to support Tesla’s automotive, robotics, and AI ventures.
In addition to constructing the Terafab semiconductor plant, Tesla is also actively investing in AI projects such as Optimus robots and Cybercab autonomous taxis, showcasing the company’s gradual shift from solely being an electric vehicle manufacturer to transforming into a diversified high-tech corporation.
In terms of financial data, as of the first quarter ending on March 31, Tesla’s revenue was $22.4 billion, marking a 16% year-over-year increase. Regarding delivery numbers, Tesla delivered 358,023 electric vehicles in the first quarter, a 6% increase compared to the previous year, reclaiming its position as the world’s leading electric vehicle seller.