Musk's Terafab Semiconductor Megafab Lands Key Partner

Musk formally launched Terafab in March 2026 as a $20 billion semiconductor megafab designed to consolidate chip fabrication, memory production, and advanced packaging under one roof. Intel is the partner — the chipmaker will help Musk's companies build and operate the facility, leveraging Intel's foundry expertise at a time when both companies need a win. Terafab targets 100,000 wafer starts per month on 2nm process technology, with Tesla's fifth-generation AI chip (AI5) slated for small-batch production later this year and volume output in 2027. The vertical integration eliminates Tesla's dependence on TSMC and positions Austin as a serious node in the U.S. semiconductor resurgence backed by CHIPS Act subsidies.