Intel Joins Elon Musk’s Fab Project
Intel has also landed more foundry business at Apple. Plus, CPU prices are going up
By Mark LaPedus
Intel and its foundry business are finally making some noticeable progress on several fronts.
On one front, Intel on Tuesday (April 7) said that it is joining Elon Musk’s Terafab project. Intel will apparently become a manufacturing and packaging partner for the Terafab project.
Then, on another front, Intel has apparently landed more foundry business at Apple.
Both deals represent a major boost for Intel, especially the Terafab project. As reported, Musk recently announced plans to build a new and giant fab. The fab project, called Terafab, is a joint effort between Tesla and SpaceX. Musk’s goal is to build a large semiconductor fab in Austin, Texas--at a cost of $20 billion to $25 billion.
At the time of the Terafab announcement, Musk didn’t provide any details regarding the timetable of the fab. He also didn’t disclose the technology partners for the fab venture.
Now, Intel appears to be the technology partner for the Terafab. “Intel is proud to join the Terafab project with @SpaceX, @xAI, and @Tesla to help refactor silicon fab technology,” according to Intel on “X.” “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.”
No other details were given. The partnership represents a major boost for the Terafab. Musk needs a technology partner for the project.
More Apple foundry business
It also represents a major shot in the arm for Intel and its foundry unit. Based in Santa Clara, Calif., Intel is the world’s largest supplier of x86-based processors for PCs and servers. AMD, Qualcomm and others also compete in the overall processor market.
In 2021, Intel reentered the foundry business. At that time, Intel Foundry Services (IFS), the company’s foundry unit, hoped to get a foothold in the leading-edge foundry business against the likes of TSMC and Samsung. Instead, IFS has struggled to garner any major foundry customers and it continues to lose money.
The tide is finally turning. The Terafab deal is a major boost. Then, in recent times, IFS won some foundry business from Apple, according to an analyst.
IFS is expected to manufacture Apple’s low-end M-series processors for MacBooks and iPads, according to KeyBanc Capital Markets. The processors will be manufactured using Intel’s 18AP process. This is a derivative of the company’s 18A technology.
Now, Intel appears to have landed some additional foundry business from Apple. “After having previously secured 18AP design wins with AAPL on low-end M-series processors for MacBooks and iPads, we believe IFS has secured additional wins at AAPL on 14A, also for M-series processors related to MacBooks and iPads. 18AP wins for M-series processors are currently expected to ramp in 2027, whereas 14A wins at AAPL are expected in 1H29. While we had hoped the AAPL win on 14A would be for A-series processors for iPhones instead of M-series, we believe this is still very much a possibility, but from our understanding, it’s still not confirmed at this point,” said John Vinh, an analyst with KeyBanc Capital Markets, in a new research note.
Last year, Intel unveiled its new 18A process. 18A is a 2nm-class technology. The process represents Intel’s first gate-all-around (GAA) transistor architecture with a backside power delivery technology.
Intel recently launched its Core Ultra Series 3 processor line, marking the debut of the company’s first chips built on its new 18A process technology. The processor line is codenamed Panther Lake.
“Intel yields on 18A steadily improve as Panther Lake continues to ramp. INTC 18A yields continue to show improvement and have steadily improved to ~65% from 60%+ last quarter. Accordingly, PC ODMs indicate expectations for increasing production shipments of Panther Lake CPUs into 2Q26,” Vinh said.
Intel’s 14A process is the company’s next-generation technology. Still in R&D, 14A also consists of a GAA transistor architecture with backside power delivery.
More Intel announcements
Intel has also made other major announcements. Back in 2024, Apollo, an asset management firm, acquired a 49% equity stake in Intel’s Fab 34 facility in Ireland for $11.2 billion. The deal provided Intel with much-needed capital.
Then, in April of 2026, Intel and Apollo announced a definitive agreement for Intel to repurchase the 49% equity interest in the joint venture related to Intel’s Fab 34 facility in Ireland not held by Intel for $14.2 billion.
Intel needs more fab capacity—and for good reason. Simply put, Intel is sold out of its processor lines.
“Total demand for server has gotten incrementally stronger with the rise of AI agent driven workloads. However, supply remains heavily constrained by limited server CPU, as we believe INTC will only able to support 20% server CPU unit growth even after converting client capacity at Intel 3,” Vinh said. (Intel 3 is the company’s 3nm process.)
AMD is in the same boat. “For AMD, they are dealing with significant tightness in leading edge capacity at TSMC and are estimating server CPU unit growth of ~15%,” Vinh said. “As such, both AMD and INTC initiated price increases of 10-15%, which are expected to become effective at the end of 1Q26.”
Vinh added: “Given strong demand and supply constraints, INTC is raising pricing again on both PC and server CPUs. On server, INTC raised pricing in 1Q26 by +10-15% and will raise pricing again in 2Q26 by the same amount +10-15%. Similarly on PCs, we’re hearing INTC raised pricing specifically on Lunar Lake and Raptor Lake in 1Q26 by +10-15%. In 2Q26, INTC is expected to raise pricing across all PC CPU SKUs by +10-20%.”