TeraFab

Intel’s public statement about the mash-up with Musk is almost comically vague. The company said that its “ability to design, fabricate, and package ultrahigh-performance chips at scale” will help accelerate Terafab’s goal of producing 1 terawatt of computing power a year to support “future advances in AI and robotics.” Pat Moorhead, a longtime chip-industry analyst and founder of Moor Insights & Strategy, predicts that Musk will lean on Intel for its advanced packaging capabilities to start. He notes that Tesla “doesn’t need [chip] design engineering; they’re already very capable of that.” Mo

Intel has been struggling in recent years, but it still has a number of fabrication plants around the world and decades of experience. Musk will have to license that manufacturing know-how. According to Moorhead, that means Intel will likely own the intellectual property produced at the Terafab. Musk would be able to create his own “recipe” for chip manufacturing, but until his companies are in a place to buy up their own chip-making equipment—such as advanced lithography machines—he will still be licensing a manufacturing process or special-process design kit from another foundry.

Worker shortages may add to the challenges Musk faces turning his vision for the Terafab into reality. He has yet to announce where the new plant will be built, but construction is underway on a 2-million-square-foot chip-design lab on the Tesla automotive campus near Austin, and the state has increasingly become Musk’s home and central to his sprawling corporate universe. Texas and much of the US are facing a shortage of tradespeople like plumbers and electricians needed to build data centers and semiconductor fabs. The data center industry is proving to have the deepest pockets to recruit wo