For months, Intel's new chief executive warned that without a major customer for its next-generation 14A manufacturing process, the company might leave advanced chipmaking. Intel, which once led Silicon Valley, faced the end of its own legacy.
Then Elon Musk called. On April 22, during Tesla's earnings call, Musk announced that Tesla's new chip complex, called Terafab, will use Intel's 14A technology. This makes Tesla the first major external customer for Intel's flagship process. For Intel, which had already signed Amazon and Microsoft to older technology, landing Tesla is the validation it desperately needed.
The market response was enormous. After Intel released strong first-quarter results on April 23, the stock jumped nearly 20% in after-hours trading. By April 24, shares had surged 22 to 25%, reaching levels not seen since 2000.
Terafab will be built in Austin, Texas, home to Tesla's Giga Texas factory. According to reports, the project will have two complementary facilities: one for Tesla vehicle and Optimus robot chips, and another for space-oriented AI data centers. The initial pilot line will cost about 3 billion dollars and produce only a few thousand wafers monthly. The long-term goal is producing one terawatt of computing power yearly, requiring between 5 and 13 trillion dollars total.
Tesla raised its 2026 spending plan to more than 25 billion dollars. For Intel CEO Lip-Bu Tan, this partnership is critical. Industry analysts agree: winning Tesla gives Intel Foundry the credibility it has been missing.