By Intel INTC shares showed signs of an early recovery in premarket trading Wednesday, rising 0.3% before the opening bell after falling 2% Monday and 3% Friday.
The move followed Elon Musk’s clarification that his business empire plans to build and operate the Terafab chipmaking project independently.
The statement eases pressure on Intel amid speculation that Taiwan Semiconductor Manufacturing Co. (TSMC) could take an operational role in the venture.
Intel also confirmed that the partnership with Musk remains intact.
Based in Texas, Terafab is Musk’s effort to enter the semiconductor manufacturing business to supply chips for his companies Tesla Inc. and SpaceXAI.
Musk had recently said he was in discussions with TSMC, prompting speculation that the Taiwanese chipmaker could become involved in running the planned facilities.
Musk, who recently turned trillionaire again, clarified Wednesday that discussions with TSMC were limited to the possibility of the company leasing part of the planned Terafab site.
“Maybe TSMC subleases part of the Terafab if they want, but nothing more than that,” Musk said in a response to a video posted on his social network, X.
What is Intel’s role in Terafab?
US chipmaker Intel Corp. is helping Musk’s companies develop the technology that will go inside the Terafab facility.
The project is expected to supply advanced semiconductors for Musk’s business empire, including Tesla’s carmaking and robotics operations and the consolidated SpaceXAI, which includes spacefaring technology and the xAI group developing Grok.
Musk stressed Wednesday that his companies would “build and run the fab.”
His clarification followed earlier comments confirming that TSMC was in discussions about participating in Terafab.
Musk had responded on Saturday to a report from the Asian technology Substack Culpium that TSMC was exploring ways to help operate the planned factories.
“In discussions, but something may come of it,” Musk posted on X on Saturday in response to the report.
Intel Chief Executive Lip-Bu Tan’s reassurance on Wednesday also helped as he told Bloomberg that the chipmaker would remain involved in Terafab.
The possibility of TSMC taking a larger role had raised questions over whether Intel would remain the sole or primary manufacturing partner for a project that has become an important part of the investment case for the company’s stock.
Oppenheimer analyst Rick Schafer said one possibility would be “TSMC owning and running a fab that serves only Tesla, SpaceX and xAI, while SpaceX invests or commits to volume,” according to a note to clients published Monday.
Musk later indicated that any chips produced by TSMC would likely supplement rather than replace chips supplied by Intel.
Investors 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.
The stock has surged about 200% so far this year.
“If it turns out Intel does not participate, or is only one fab technology provider, investors may reconsider the credit they gave Intel,” Luria told MarketWatch.
Luria also said the possibility of 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 reassurance from Intel indicate that TSMC could potentially have a limited presence at the Terafab site.
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