Intel Corp. (NASDAQ:INTC), Tesla Inc. (NASDAQ:TSLA), xAI, and SpaceX finalized a landmark TeraFab partnership on Tuesday, positioning Intel as a core technology and manufacturing partner to scale next-generation AI and semiconductor production.

Intel Secures Foundry Validation And Expansion

Intel strengthens its foundry credibility by supplying technology, IP, and manufacturing expertise to power TeraFab, Neil Shah, a Counterpoint Research analyst, said on Wednesday.

The deal supports its strategy to run large-scale fabs, attract marquee customers, expand into AI, robotics, and space-related verticals, and create new co-innovation opportunities, while boosting investor confidence, according to the analyst.

CEO Lip-Bu Tan said, “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.”

Intel also said it hosted Elon Musk at the company over the weekend, suggesting closer coordination between the chipmaker and Musk's technology ventures.

Tesla, xAI, SpaceX Deepen Integration And Diversify Supply

For Tesla, xAI, and SpaceX, the partnership reduces dependence on external suppliers such as Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) and Samsung Electronics Co. Ltd. (OTC:SSNLF), while enhancing control over chip design and production, Shah noted.

The partnership gives them greater control over the supply chain—from sourcing to manufacturing—while enabling co-innovation and scaling compute infrastructure, he said.

Scale Benefits Come With Capital Demands

The collaboration also unlocks unprecedented scale for semiconductor output and AI compute while aligning with domestic manufacturing priorities.

At the same time, it introduces significant capital requirements, with Intel’s capabilities helping support execution of the large-scale buildout, Shah added.

Price Action: Tesla shares rose 4.75% to $363.11, while Intel gained 4.74% to $55.42 in premarket trading Wednesday, according to Benzinga Pro data.

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