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MediaTek Likely to Partner with Tesla's TERAFAB Chip Factory, First Shipments in 2028

4 min read•May 31, 2026•
Liu Wei
Liu Wei

MediaTek has emerged as the leading candidate to partner with Tesla on its massive TERAFAB chip factory project, with first custom chip shipments expected as early as 2028. The partnership would leverage Intel's 14A advanced process technology, marking a key step in Tesla's push for chip independence and a major win for Intel's foundry business. The chips, designed by Tesla's IC team, would be produced at the Texas-based TERAFAB facility jointly backed by Tesla, SpaceX, and xAI.

The TERAFAB Project and MediaTek's Role

Tesla's ambitions for chip independence took shape in March when Elon Musk announced TERAFAB, a chip manufacturing facility in Austin, Texas. The project, developed jointly with SpaceX and xAI, is positioned as the largest chip factory ever built. According to Technode, citing an industry survey by TF International Securities analyst Ming-Chi Kuo, MediaTek is the most likely strategic partner among custom ASIC vendors to supply the chips.

MediaTek will support the adoption of Intel's 14A process technology and advanced packaging solutions. Small-volume shipments could start as early as 2028, providing the custom chips needed by Tesla's in-house IC design team.

SpaceX logo representing TERAFAB joint venture partners

Why Intel's 14A Process Matters

Intel's 14A is the company's next-generation foundry process, designed to compete with TSMC's advanced nodes. Winning a customer like Tesla validates Intel's foundry strategy, which aims to reclaim leadership in chip manufacturing. The 14A process promises improved power efficiency and performance for AI and automotive applications — both critical for Tesla's vehicle and energy products.

For Intel, the MediaTek-Tesla partnership represents a marquee deal that could attract other high-volume customers. It also positions Intel as a viable alternative to TSMC for high-stakes custom silicon, especially as geopolitical tensions push companies to diversify supply chains.

Market and Competitive Implications

The partnership reshapes the competitive landscape for custom chip manufacturing. TSMC has long been the default choice for advanced chips, but Tesla's move toward Intel signals a shift. Other automakers and tech companies may follow suit, especially if Intel's 14A process delivers on its promises.

For MediaTek, the deal opens a new avenue beyond its traditional smartphone and IoT markets. Supplying custom ASICs to Tesla could become a significant revenue stream, though initial volumes are likely small. The company's expertise in chip design and integration makes it a natural fit for Tesla's requirements.

Samsung's foundry business, meanwhile, faces increased pressure to secure similar partnerships. The race to supply Tesla's chip needs underscores the growing importance of custom silicon in the automotive and AI sectors.

What This Means for the Industry

Tesla's TERAFAB project is a bet on vertical integration that other automakers are watching closely. By investing in its own chip manufacturing capacity, Tesla reduces reliance on outside suppliers and gains control over its supply chain. This could accelerate a broader trend of automakers designing and making their own silicon, challenging traditional semiconductor companies.

Investors should note that Intel's foundry business now has a high-profile customer beyond its existing commitments. If the MediaTek-Tesla partnership scales successfully, Intel could capture meaningful market share from TSMC in the AI and automotive segments.

Competitors like Qualcomm and NVIDIA may need to reassess their foundry strategies. The Tesla-Intel alliance could also influence government policies on chip manufacturing incentives, particularly in the U.S., where TERAFAB is located.

Conclusion

The MediaTek-Tesla partnership represents a major milestone in the push for chip independence in the automotive industry. With Intel's 14A process as the manufacturing base, Tesla is positioning itself to have greater control over its silicon supply chain, starting as early as 2028. This deal also signals Intel's resurgence as a credible foundry player and could reshape the dynamics of custom chip manufacturing for years to come.

Arizona appeals court vacates manslaughter sentence after AI video

An Arizona appeals court vacated the 10.5-year sentence of Gabriel Horcasitas while upholding his manslaughter conviction, first reported by Nytimes. The case returns to Maricopa County Superior Court for resentencing without the video, after judges found that it presented scripted statements as if the victim himself were speaking in court.

The three-judge panel said the video generated a likeness of Christopher Pelkey’s voice and appearance but did not reflect actual events. It found that allowing and relying on the video made the sentencing fundamentally unfair, and noted that no prior Arizona case had addressed the admissibility of such a depiction at sentencing.

The judges said a victim’s right to speak cannot override a defendant’s right to be sentenced on accurate, reliable information. They said the video collapsed the distinction between the family’s belief about what Pelkey would have said and Pelkey’s own voice and opinions.

The ruling distinguishes family members speaking about Pelkey from a generated likeness that appeared to speak for him.

Pelkey’s sister, Stacey Wales, presented the video during Horcasitas’s sentencing alongside victim-impact statements from family and friends. Wales wrote the script and said her husband and the couple’s longtime business partner helped create the video using Pelkey’s voice from a YouTube video and his face and torso from a funeral-service poster.

Judge Todd F. Lang praised the video as genuine, then imposed the maximum sentence of 10.5 years, more than the nine years prosecutors had sought.

Wales said nobody intended to make the court believe Pelkey was alive or that he had recorded the video before his death. She said she disagreed with the ruling and argued that families use slide shows, collages, hypothetical conversations and poetry to convey grief.

Wales compared the AI video with photography, saying it took 15 years of landmark cases around the 1860s before photography was widely accepted in courts.

The case returns to Maricopa County Superior Court for a new sentencing hearing without the AI-generated video.