Tesla CEO Elon Musk announced on Wednesday that the company plans to utilize Intel's advanced 14A chip manufacturing process for its Terafab project. This marks a significant breakthrough for Intel, which has been actively working to transform its business and attract external clients to its chip fabrication technology. Intel's upcoming "14A" process is designed to compete with primary rival TSMC, though Intel had not previously disclosed any major external customers for the technology.
Following the announcement, Intel's stock rose 2.6% in after-hours trading. Intel had previously indicated it was in discussions with several large customers regarding 14A agreements but has not yet commented on this specific development. Earlier this month, Intel joined Musk's Terafab project, aiming to supply processors for the billionaire's robotics and data center initiatives.
Musk stated during Tesla's earnings call, "Given that the 14A process is expected to be mature or commercially available by the time the Terafab facility scales up, adopting it appears to be the right decision. We also maintain a strong collaborative relationship with Intel." The move is seen as a potential boost to investor confidence in Intel's next-generation manufacturing capabilities, which have previously faced challenges related to production yields.
Ben Bajarin, lead analyst at technology consulting firm Creative Strategies, noted that Intel's 14A technology "could be more significant for Intel than many anticipate." He added, "Securing multiple early design partners is critical—it helps streamline processes and build essential experience at the technological frontier. They will certainly benefit from economies of scale, making this an excellent first non-Intel customer for the company."
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