Intel Corporation (NASDAQ: INTC) shares rose 0.55% to close at $113.12 on Wednesday as Elon Musk and Intel CEO Lip-Bu Tan offered fresh clarity around Intel’s continuing role in the planned Terafab AI chip complex.
Musk sought to dispel concerns that Taiwan Semiconductor Manufacturing Co. could assume control of Terafab’s operations, making clear that Tesla and SpaceX intend to build and operate the facility.
In a post on X, Musk said they “will build and run the fab. Let there be ZERO doubt about that,” adding that TSMC’s involvement, if any, would be limited to potentially subleasing a portion of the site.
Intel CEO Lip-Bu Tan separately told Bloomberg that Intel will continue working with Musk on Terafab. His comments reinforced the chipmaker’s position after Musk’s earlier acknowledgment of discussions with TSMC had raised questions about whether Intel could be displaced or see its role reduced.
The clarification followed a sharp two-session retreat in Intel shares. The stock fell 2.63% Monday and another 3.18% Tuesday. That represented a cumulative 5.7% decline from Friday’s $119.33 close to $112.50 before Wednesday’s modest recovery. Even after the rebound, Intel remained about 5.2% below Friday’s level.
Terafab Puts Intel’s 14A Foundry Strategy In Focus
Intel joined the Terafab effort earlier this year, and Musk said in April that the project planned to use Intel’s next-generation 14A manufacturing process. Reuters reported at the time that the commitment would make Tesla the first major customer publicly identified for 14A, giving Intel an important external endorsement as it works to expand its contract-manufacturing business.
Terafab itself is planned on an unusually large scale. Texas officials said in August that SpaceX will build the vertically integrated semiconductor facility in Grimes County, with the first phase representing more than $16.8 billion of investment and 3,000 jobs. The planned complex would cover about 100 million square feet and combine chip manufacturing, packaging, and testing capabilities aimed at producing AI chips for applications on Earth and in space.
Musk has also laid out a long-term target for Terafab to produce one terawatt of computing capacity annually. The project is intended to support the growing semiconductor requirements of Tesla, SpaceX, and related AI operations. Those applications include autonomous vehicles, humanoid robots, and data-center systems.
For Intel, the project matters beyond its size, as the company is still working to expand its chipmaking operations for outside customers.
Intel reported $5.8 billion of Foundry segment revenue in the second quarter, but only $293 million — roughly 5% — came from external customers. Intel also said much of the increase in external revenue reflected Altera becoming an outside customer following its deconsolidation.
That makes major outside commitments to technologies such as 14A particularly relevant to Intel’s foundry strategy. Wednesday’s statements do not spell out Intel’s final commercial terms, production volumes, or precise responsibilities at Terafab. However, they reduce the immediate uncertainty that TSMC could replace Intel by taking control of the facility.
