Shares of Intel Corp. climbed more than 4% today after it announced plans to participate in Elon Musk’s Terafab initiative.

Terafab is a collaboration between SpaceX Corp. and Tesla Inc. that was unveiled last month. Its goal is to build a semiconductor manufacturing hub capable of producing chips for satellites, robots and autonomous vehicles. The Texas-based campus is expected to house two fabs.

Musk reportedly visited an Intel office over the weekend to meet with Lip-Bu Tan, the company’s chief executive officer. The chipmaker stated in a post on X that “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 didn’t elaborate on its role in the project. One possibility is that the company, which operates more than 12 fabs worldwide, will lend a hand with plant construction and maintenance. Additionally, the statement’s mention of “packaging” might mean Intel will provide its advanced chip packaging to Terafab. The technology is used to link together the silicon modules that make up a processor.

At a recent investor event, Intel Chief Financial Officer David Zinsner stated that the chipmaker was close to finalizing several packaging deals worth billions of dollars per year. Terafab operators SpaceX and Tesla may be among the buyers. Today Wired reported that Amazon.com Inc. and Google LLC are in “advanced talks” to purchase packaging services from Intel.

Many chip packaging technologies use an interposer-based architecture. An interposer is a flat piece of silicon on which a processor’s core components are placed. It functions both as the structural foundation of the chip and as a network that moves data between the chip’s components. Furthermore, the interposer plays a role in power delivery.

Interposers make it possible to build highly sophisticated processors, but they come with certain downsides. They complicate chip development and increase production costs. To address those challenges, Intel has developed an alternative called EMIB. It replaces interposers with so-called bridges, components that serve the same function but take up less space and can be manufactured more easily.

Intel is currently developing a new version of EMIB called EMIB-T. According to the company, it will make it possible to build processors comprised of more than a dozen silicon modules and 38 bridges. EMIB-T is expected to support HBM, a high-speed memory variety widely used in AI chips.

In a Monday press conference, Musk stated that Terafab’s two fabs will focus on different parts of the chip market. The first facility will make edge processors for devices such as humanoid robots. The second plant is expected to produce processors for a planned network of orbital AI data centers.

According to Musk, Terafab’s space-optimized chips will operate at higher temperatures than standard silicon. The reason is that dissipating heat is more difficult in space than in orbit. The chips will also be better at withstanding static electricity, a buildup of electrons on a processor’s surface that can cause technical issues.

Terafab will make not only logic and memory circuits but also photomasks. Those are highly complicated optical components that play a key role in chip production.

Fabs use laser light to carve transistors into blank silicon wafers. A photomask acts as a kind of cookie cutter: it shapes the light into specific patterns that correspond to the circuit designs a company wishes to manufacture. Processors and photomasks are usually made separately. Musk claims that bringing the two technologies together under one roof will speed up chip development workflows.

Photo: Intel