Intel CEO Internal Memo: Full Details of Musk's Terafab Superchip Fab to Be Disclosed Within Weeks

Musk's ambition to build chips accelerates again. Intel CEO Lip-Bu Tan sent an internal memo to employees last week, promising to disclose the "scope and nature" of the company's involvement in the Terafab project within "weeks," marking a significant step toward the public launch of this grand plan aimed at reshaping the chip manufacturing landscape.

According to the memo obtained by CRN, Lip-Bu Tan conveyed this information to all Intel employees last Friday. The timing coincides exactly two days after Intel officially announced its collaboration with Musk's SpaceX, xAI, and Tesla to advance the Terafab project. Intel will play a deep role as a foundry service provider in this initiative, seen as a key lever in its own transformation and revitalization plan.

The near-term goal of Terafab is to establish a pilot production line in Austin, Texas, with silicon wafer manufacturing scheduled to begin in 2029. Initial monthly capacity is set at 3,000 wafers.

On the supply chain front, Bloomberg previously reported that the Terafab team has issued requests for quotes to equipment giants including Applied Materials, Tokyo Electron, and Lam Research, demanding "lightning-fast" responses. The project's ultimate vision is to deliver one terawatt of computing power annually, directly targeting TSMC's dominance in advanced process nodes. Bernstein analysts estimate that the capital expenditure required for full project implementation could range from $5 trillion to $13 trillion.

Intel Internal Memo: Participation Details to Be Revealed Within Weeks

According to CRN, Lip-Bu Tan clearly stated in the memo that he would disclose the "scope and nature" of Intel's participation in the Terafab project to employees, but provided no further details on specific timelines.

Previously, Musk visited Intel's headquarters in Santa Clara. Lip-Bu Tan subsequently posted photos of their meeting on social media, with Intel board member Ira Ehrenpreis also attending the visit. This remains the most direct confirmed public contact record between Intel executives and the Terafab team to date.

Intel has characterized this collaboration as a crucial component of its efforts to revitalize its foundry business.

The company has recently been working to transform the Intel Foundry into an independent manufacturing platform capable of accepting external customer orders, actively seeking endorsements from major clients including NVIDIA. The addition of Terafab is seen as a key milestone injecting substance into this strategy.

Terafab Two-Phase Blueprint: Simultaneous Focus on Automotive, Robotics, and AI Chips

Based on information disclosed by CRN, the Terafab project will advance in two phases: Phase One focuses on building fabs for automotive and robotics chips, while Phase Two shifts to mass production of AI chips.

From the perspective of end applications, chips produced by the project will primarily serve Musk's xAI artificial intelligence business, the humanoid robot Optimus, and Robotaxi, while also covering space data centers for both SpaceX and xAI. Musk indicated that xAI is expected to consume the vast majority of the capacity.

Regarding capacity, the project plans to launch a pilot line in Texas in 2029, with an initial monthly output of 3,000 wafers, gradually increasing as the project scales. The project also seeks to internalize the entire process flow from mask production to testing and packaging, and has extended recruitment invitations to engineers from Applied Materials, Samsung, and TSMC.

Tesla recently disclosed its A15 chip, currently manufactured via foundries operated by TSMC and Samsung. Moving its production to Terafab's own lines is considered one of the primary goals once the project is completed. Additionally, Tesla has confirmed it is developing the next-generation A16 chip and the Dojo3 supercomputing project.

Capital Threshold and Technology Roadmap Remain Major Variables

Despite the significantly accelerated pace, doubts about the feasibility of Terafab have not dissipated. Bernstein analysts estimate that the capital expenditure required for full project implementation ranges between $5 trillion and $13 trillion, representing the largest single investment concept in the history of the semiconductor industry.

According to previous Bloomberg reports, Tammy Qiu, Head of Technology Equity Research at Hamburg-based investment bank Berenberg, stated, "The intent behind the project is real," but she expects no substantial progress within the next two years. She noted that Berenberg has not yet included Terafab in its financial forecasting model for ASML. As the world's sole supplier of extreme ultraviolet (EUV) lithography machines, ASML is an indispensable source of equipment for any manufacturer aiming to mass-produce advanced process chips, but it remains unclear whether the Terafab team has initiated contact with this Dutch company.

Currently, Terafab has not placed any fixed orders. The technology roadmap and final production location remain undetermined, as does the possibility of expanding to multiple sites beyond Texas. According to prior Bloomberg reports, after receiving Terafab's cooperation request, Samsung did not respond directly but instead proposed allocating additional foundry capacity for Tesla within its planned factory in Taylor, Texas.

With Intel's CEO committing to disclosing more details within weeks, the market will receive the most complete roadmap of Terafab participation to date. Whether this disclosure can alleviate concerns regarding the project's feasibility remains to be seen.

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