Musk rules out TSMC role in Terafab operations; Intel gains

Investing.com -- Elon Musk moved Wednesday to shut down speculation about TSMC taking operational control of the Terafab AI chip complex, writing on X that his company "will build and run the fab. Let there be ZERO doubt about that," and limiting Taiwan Semiconductor's potential involvement to a possible sublease of part of the site.

As a result, TSMC's ADR shares fell 1.3% in pre-market Wednesday trade while Intel, which slid 3.2% on Tuesday on fears it could be sidelined, added 1.6% ahead of the open. Moreover, Intel CEO Lip-Bu Tan told Bloomberg News that the company would remain involved in the project.

Terafab is a Tesla-SpaceX joint venture in Grimes County, Texas, targeting more than one terawatt of annual AI compute capacity to supply Tesla's Optimus robots, Cybercabs, SpaceX space-based data centers, and xAI.

Its initial investment is $16.8 billion, with total potential spending across all phases reaching up to $119 billion and a planned workforce of at least 3,000.

Intel joined as the sole named manufacturing partner in April, with its next-generation 14A process node designated as the facility's only identified technology.

The TSMC angle surfaced on Friday when Culpium newsletter reported that TSMC was exploring using Terafab as an anchor client for a future Texas semiconductor factory. Musk acknowledged those talks on Saturday, posting that they were "just discussions, but something may come of it."

For Intel, the resolution matters more than it might seem on the surface. The company's external foundry revenue totaled just $293 million in Q2, making Terafab one of its most visible outside wins. The April commitment locking in the 14A node was a strategic anchor for Intel's foundry ambitions.

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