On April 24, Tianfeng International Securities analyst Ming-Chi Kuo said on Friday that Tesla’s super chip factory Terafab chose to use Intel’s 14A process technology because it had no choice, because the production capacity of the two major chip foundries TSMC and Samsung have been filled by other orders.
Figure 1: Tesla Terafab will use Intel's 14A process
Tesla CEO Elon Musk said on an earnings call on Wednesday that the company will cooperate with Intel on the Terafab project and use the latter's 14A process technology. He said that 14A is currently the most advanced technology and is not yet fully mature. But by the time the Terafab project ramps up production, it will probably be quite mature, so 14A looks like the right choice.
Figure 2: Ming-Chi Kuo’s X post
In response, Ming-Chi Kuo said on X that from another perspective, the key reason why Terafab chose Intel was because there was no choice. TSMC's production capacity in the next few years has already been filled with high-margin orders (AI), while Samsung will continue to enjoy the excess returns brought about by the memory chip super cycle. Business visibility for both has been extended to 2028 to 2030, and there is no reason to reallocate resources for the high-uncertainty Terafab.
Ming-Chi Kuo also added that Samsung has already received a lot of orders from Tesla, and if it participates more deeply in the Terafab project, it may earn even less.