Elon Musk and Intel chief executive Lip-Bu Tan have moved to reassure investors that Chipzilla remains involved in the ambitious Terafab chipmaking project, following reports that TSMC could muscle in on the operation.
According to Reuters, the trouble began when Musk acknowledged discussions with Taiwanese chipmaking giant TSMC about participating in the Texas semiconductor venture. Investors immediately wondered whether Intel, which joined the project in April, was about to be pushed into the cheap seats.
The speculation followed a report suggesting TSMC could own and operate a new manufacturing facility associated with Terafab. Musk initially confirmed that discussions were taking place, saying: “Just discussions, but something may come of it.”
That was enough to upset Intel shareholders, who watched the company’s stock fall as fears grew that TSMC could grab a substantial share of the project. Chipzilla shares fell around 5.7 per cent across Monday and Tuesday, showing how quickly investors can get nervous when Musk starts talking.
Musk then tried to calm the market, insisting his companies would retain control of the manufacturing operation. “No, we will build and run the fab. Let there be ZERO doubt about that,” he wrote on X.
He added: “Maybe TSMC subleases part of the Terafab if they want, but nothing more than that.” The clarification leaves open the possibility of TSMC participating in the project, although any arrangement would apparently fall short of giving the Taiwanese company control.
Intel chief executive Lip-Bu Tan reinforced the message, telling Bloomberg that Chipzilla would continue working with Musk on Terafab. The reassurance helped steady Intel shares, which had been battered by concerns about the company’s position in the venture.
Terafab is a planned joint undertaking involving Tesla and SpaceX, intended to create an enormous semiconductor manufacturing complex in Grimes County, Texas. Musk unveiled the project in March with the extraordinary ambition of producing enough chips to deliver one terawatt of computing capacity annually.
The chips would support Musk’s expanding technology empire, including Tesla’s Optimus humanoid robots, autonomous vehicles and SpaceX’s proposed space-based data centres. Initial investment has been estimated at $16.8 billion, with potential expenditure across all phases reaching $119 billion.
Intel became the project’s first named manufacturing partner in April, with its forthcoming 14A process technology identified as a possible foundation for production. The partnership offered Chipzilla a valuable opportunity to demonstrate its advanced foundry capabilities to a major external customer.
The stakes are considerable because Intel’s foundry business has struggled to secure major outside customers despite enormous investment in manufacturing technology. Its external foundry revenue amounted to just $293 million in the second quarter, making the prospect of substantial Terafab orders particularly attractive.
For now, Musk’s assurances have preserved Intel’s position in the venture, although the precise division of manufacturing responsibilities remains uncertain. TSMC has yet to announce a formal agreement, while the project’s extraordinary production targets still depend on turning Musk’s promises into functioning factories.
