April 22 (Reuters) - Tesla's Chief Executive Officer Elon Musk said on Wednesday the company plans to use Intel's advanced 14A manufacturing process to make chips at its Terafab project.
The move marks a breakthrough for Intel, which has been trying to revamp its business to attract outside customers to use its chip manufacturing technology. Intel's forthcoming "14A" chipmaking technology aims to compete with top rival Taiwan Semiconductor Manufacturing Co, but Intel had not yet disclosed a major
external customer.
Intel's shares rose 2.6% in extended trading. Intel, which has said it was in discussions with large customers about 14A, did not immediately respond to a request for comment.
Intel joined Musk's Terafab AI chip complex earlier this month with SpaceX and Tesla to make processors to fuel the billionaire's robotics and data center ambitions.
"Given that by the time Terafab scales up, 14A will be probably fairly mature or ready for prime time, 14A seems like the right move, and we have a great relationship with Intel," Musk said during Tesla's earnings conference call.
The move could boost investor confidence in Intel's next-generation manufacturing process after the firm's previous struggles with yields for its chips.
Ben Bajarin, head of technology consultancy Creative Strategies, said that Intel's 14A technology could "turn out to be a bigger deal for Intel than folks thought."
"It’s important to have multiple partners as early design partners to help clean the pipe and work through needed learnings at the leading edge. They will definitely have scale, so a great first non-Intel customer," Bajarin said.
(Reporting by Zaheer Kachwala in Bengaluru and Stephen Nellis in Morgan Hill, California; Editing by Pooja Desai and Deepa Babington)
