Tesla plans to use Intel's next-gen 14A process for its TeraFab project

Intel seems to have secured its first major customer for the 14A production node that is currently under development. According to a Reuters report, Tesla plans to use Intel's next-generation 14A manufacturing process for the much-anticipated TeraFab project. Tesla and SpaceX CEO Elon Musk has confirmed that they have picked Intel's yet unproven 14A process, giving Intel its first major external customer for this node.

"Given that 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"

- Elon Musk via Reuters

Musk seems to be very bullish on his vision for TeraFab, as he recently expressed his desire for the project to move at "light speed". Tesla is currently using external partners such as TSMC and Samsung to manufacture its AI chips, including the AI5 chip recently taped out. The billionaire's robotics and data center ambitions necessitate an in-house production process, which is what the TeraFab AI chip complex in Austin, Texas, aims to accomplish.

On the other side, Intel is quite desperate to get its in-house production up and running. Their 18A process node has had some problems ramping up, but now, finally, we are seeing Panther Lake and Wildcat Lake CPUs being produced on that node, though only partially. Intel CEO Lip-Bu Tan has been very clear about Intel's production struggles and has even said that securing an external customer was vital to Intel's continued presence in the manufacturing business.

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Intel has recently joined Elon Musk's TeraFab project as well, which is important because Musk will need all the help he can get if he plans to achieve his lofty targets. The billionaire has previously said that TeraFab will aim to produce 1 terawatt of annual computing power, almost twice the amount the entire US currently produces. Realizing this goal will be a monumental task, estimated to cost up to $13 trillion by industry experts.

Intel had previously stated that it was in conversation with multiple potential customers over the 14A node, but there was no concrete buyer yet. This has now changed after Tesla pledged its allegiance to Intel, which is a huge public vote of confidence as well. The stock market reflected this confidence with Intel's shares rising 3.6% following the announcement. Intel has not yet made an official statement regarding this future collaboration.