Elon Musk reaffirms majority control over Terafab, an advanced AI chip fabrication complex, with Intel maintaining a partnership stake and technical role.
Elon Musk says Tesla and SpaceX will build and run the Terafab AI chip complex, putting a spotlight on Intel's involvement as a partner in the project. Terafab is a planned Tesla-SpaceX project in Texas aimed at creating a massive AI chip fabrication facility.
When someone on X suggested that TSMC would likely own and operate the facility, Musk rejected the notion. He stated that his companies will build and run the fab, with "ZERO doubt" about it. However, he left room for TSMC to sublease part of the site but said there would be "nothing more than that." Musk noted last week that the two sides had discussed possible cooperation.
Intel CEO Lip-Bu Tan told Bloomberg that Intel will remain involved in the project. Reuters observed that any expanded role for TSMC could challenge Intel's position as Musk evaluates partners, though neither company responded to requests for comment.
For Intel stock, Terafab represents both a headline risk and an opportunity. The company's foundry business ambitions are at stake. Landing a high-profile customer or strategic role would be valuable—Intel's foundry division lost $2.1 billion in Q2, with external foundry revenue reaching just $293 million. Intel says its technology trajectory is improving, with output from its 18A chip process rising more than 50% from the prior quarter. The next process, 14A, is ahead of schedule, with production set to begin in the second half of 2027 and high-volume production planned for 2028.
Intel's core business showed strength in Q2. Revenue hit $16.1 billion, exceeding the midpoint of guidance by $1.8 billion. Earnings per share came in at $0.42, well above the $0.20 guide. Data center revenue rose 59% to $6.3 billion. Management reported that demand is outrunning supply, and Intel now expects capital spending to exceed $20 billion in 2026. For Q3, the company guided revenue of $15.8 billion to $16.8 billion. Investors will be watching for clarity on Intel's specific role at Terafab and any further announcements from Musk, TSMC, or Intel itself.