Intel Corp. shares showed signs of recovery in premarket trading Wednesday, rising 0.3% after two consecutive sessions of declines. The stock had fallen 2% on Monday and 3% on Friday, pressured by uncertainty surrounding the Terafab project and the potential involvement of Taiwan Semiconductor Manufacturing Co. (TSMC).
The turnaround followed a clarification from Elon Musk, who stated that his business empire plans to build and operate the Terafab chipmaking facility independently. Musk's remarks, posted on his social network X, eased speculation that TSMC could take an operational role in the venture.
Intel also confirmed that its partnership with Musk remains intact, providing further reassurance to investors. The Terafab project, based in Texas, is Musk's initiative to enter semiconductor manufacturing to supply chips for Tesla Inc. and SpaceXAI, the consolidated entity that includes space technology and the xAI group developing Grok.
Musk's Clarification on TSMC's Role
Musk had previously confirmed discussions with TSMC, leading to speculation that the Taiwanese chipmaker might help operate the planned facilities. However, on Wednesday, Musk clarified that those discussions were limited to the possibility of TSMC leasing part of the Terafab site.
"Maybe TSMC subleases part of the Terafab if they want, but nothing more than that," Musk said in response to a video posted on X. This statement directly addressed earlier reports from the Asian technology Substack Culpium, which suggested TSMC was exploring ways to help operate the factories.
Musk stressed that his companies would "build and run the fab," reaffirming their commitment to independent operation. This clarification is significant because it reduces the likelihood of TSMC taking a larger role, which had raised questions about Intel's position as the primary manufacturing partner.
Intel's Role in Terafab
Intel is helping Musk's companies develop the technology that will be used inside the Terafab facility. The project is expected to supply advanced semiconductors for Tesla's carmaking and robotics operations, as well as for SpaceXAI's spacefaring technology and the xAI group developing Grok.
Intel CEO Lip-Bu Tan also provided reassurance on Wednesday, telling Bloomberg that the chipmaker would remain involved in Terafab. This dual confirmation from both Musk and Intel helped stabilize investor sentiment.
Oppenheimer analyst Rick Schafer noted in a Monday client note that one possibility could be "TSMC owning and running a fab that serves only Tesla, SpaceX and xAI, while SpaceX invests or commits to volume." However, Musk later indicated that any chips produced by TSMC would likely supplement, rather than replace, those supplied by Intel.
Investor Focus on Intel's Terafab Role
The prospect of another major chipmaker becoming involved in Terafab had complicated expectations around Intel's role in the project. D.A. Davidson managing director Gil Luria said enthusiasm around Terafab has been a major catalyst behind the "dramatic ascent" of Intel's stock this year, which has surged about 200%.
Luria told MarketWatch that if Intel does not participate, or is only one fab technology provider, investors may reconsider the credit they gave the company. He also suggested that working with another manufacturer could be viewed "as a lack of confidence in trusting the future of his important endeavor to Intel alone."
Musk's latest comments and Intel's reassurance indicate that TSMC could potentially have a limited presence at the Terafab site, likely as a lessee rather than an operator. This development helps clarify the project's structure and reduces uncertainty for Intel investors.
This article is for informational purposes only and does not constitute financial advice.
