[News] Intel CEO Lip-Bu Tan Says It Remains in Musk’s Terafab as TSMC Speculation Grows

Tesla’s Terafab foundry strategy is coming into focus as Intel remains involved in the project while Elon Musk explores potential cooperation with TSMC. According to Reuters, citing Bloomberg, Intel will remain involved in Terafab, CEO Lip-Bu Tan said ahead of an event in Tokyo marking the U.S. chipmaker’s 50th year of operations in Japan.

Investing.com notes that Tan’s comments come as speculation over a potential partnership between Tesla and TSMC has raised concerns among investors. Musk said earlier this week that he was in discussions with TSMC about collaborating on Terafab, while Intel has served as a development partner for the project since April.

Terafab, a joint effort involving Tesla, SpaceX, and xAI, is planned to include two factories. One would produce chips for Tesla vehicles and humanoid robots, while the other would support AI data centers in space. The project ultimately aims to reach one terawatt of annual computing capacity, according to Investing.com.

As noted by CTech, the developments suggest that Musk has yet to commit to a single manufacturing partner for Terafab, with both Intel and TSMC potentially playing roles. The project is expected to involve much deeper manufacturing cooperation than a traditional customer-supplier relationship.

The stakes are particularly high for Intel. When the chipmaker joined Terafab as a development partner in April, the project offered CEO Lip-Bu Tan an important opportunity to demonstrate that Intel’s manufacturing technology could secure a role in one of the world’s most ambitious technology projects, CTech notes.

Meanwhile, Seoul Economic Daily notes that some analysts view Musk’s mention of TSMC as a negotiating tactic aimed at gaining leverage over Intel on pricing. Luke Lloyd, CEO of Equity Armor Investments, pointed to the U.S. government’s investment in Intel, arguing that it would be difficult to see the chipmaker being replaced to any significant extent.

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(Photo credit: Intel)