World’s richest man also detailed how production at the fab will be divided between Tesla and SpaceX

Tesla CEO Elon Musk has said that the EV company is planning to use Intel’s 14A chip manufacturing process at its $20 billion ‘TeraFab’ project in Austin, Texas.

“We plan to use Intel’s 14A process, which is state-of-the-art and in fact not yet totally complete,” Musk said during Tesla’s Q1 2026 earnings call.

“By the time TeraFab scales up, 14A will be probably fairly mature or ready for prime time. 14A seems like the right move, and we have a great relationship with Intel, a lot of respect for the CEO, the CTO, and the new team there,” he added.

Lip-Bu Tan and Elon Musk
The news comes two weeks after the chipmaker officially announced it had joined the TeraFab project via a post on the Musk-owned social media platform X, writing: “Our ability to design, fabricate, and package ultra-high-performance chips at scale will help accelerate TeraFab’s aim to produce 1 TW/year of compute to power future advances in AI and robotics.”

Musk’s commitment to Intel 14A marks a turnaround in fortunes for the chipmaker, which had previously mulled the cancellation of the technology as a result of financial concerns.

Following the publication of Intel’s Q2 2025 earnings in July last year, the company’s CEO, Lip-Bu Tan, said that given its increased costs, Intel would only move forward with the technology if a “meaningful external customer to drive acceptable returns on our deployed capital” could be found.

“I do not subscribe to the belief that if you build it, they will come,” Tan further noted. “Under my leadership, we will build what customers need, when they need it, and earn their trust through consistent execution.”

Musk confirmed plans to build a semiconductor plant in Austin, Texas, in March 2026, with the site set to be adjacent to Tesla’s headquarters and run as a joint venture between the automaker and SpaceX. Musk said the facility will produce chips for space data centers, advanced vehicles, and humanoid robots.

The idea was first floated by the world’s richest man at a Tesla annual shareholder meeting in November 2025. At the time, Musk said that if Tesla were to extrapolate the best-case scenario for chip production from its suppliers, it still wouldn’t be enough, which had led him to propose the Tesla ‘TeraFab’ – “it’s like giga but way bigger.”

On the most recent earnings call, Musk also revealed that in the near term, Tesla will build a $3bn R&D facility at the Gigafactory campus in Austin to support the production of a “few thousand wafers per month,” while long term, SpaceX will take responsibility for high-volume manufacturing at the facility.

“It is really intended to try out ideas… for improving the fundamental technology of how chips are made, some of the new physics we would like to test out. We also want to test out the ability to see if something is working in production [environment]. You need kind of like a few thousand wafer starts a month to make sure that a production process is sound,” Musk said.

“That is basically what we have figured out thus far: Tesla’s doing the research fab, SpaceX’s doing the initial part of the large-scale TeraFab, and then we’ve got to figure out the rest.”