Musk and Intel's Tan Defend Chipmaker's Role in Terafab Project

Intel CEO Lip-Bu Tan said on Wednesday that the company's work on Elon Musk's Terafab chip-making project will continue, and Musk declared on X that his venture — not Taiwan Semiconductor Manufacturing Co. — will build and run the plant.

The two statements landed one day after speculation about TSMC's involvement knocked more than 5% off Intel's stock over Monday and Tuesday.

Tan told Bloomberg ahead of an event in Tokyo that Intel's involvement in Terafab will continue. Musk went further on his X account, responding to a post suggesting TSMC would take a larger role in the massive chip plant.

"No, we will build and run the fab. Let there be ZERO doubt about that. Maybe TSMC subleases part of the Terafab if they want, but nothing more than that," Musk replied.

What triggered the selloff?

The damage started on Saturday, when Musk acknowledged that TSMC could take part in his Texas-based chip venture. Investors read that opening as a threat to Intel's position.

Intel shares lost more than 5% across Monday and Tuesday. On Wednesday, the stock rose around 1.5% ahead of the open. TSMC's U.S.-listed shares gained 3% on Monday, then slipped 1.6% ahead of Wednesday's open.

How big is the Terafab bet?

Musk announced plans for Terafab, jointly led by Tesla and SpaceX, in March. The companies pledged to manufacture 1 terawatt of computing capacity a year — twice as much as the entire United States needs.

The timeline of Intel's involvement runs back further:

• November 2025: Musk floated a deal with Intel after saying current partners could not meet his chip demands.
• April 2026: Intel became the first company to offer support for the high-profile project.
• June 2, 2026: Tan appeared at an event in Taipei, where he was photographed amid rising speculation about Intel's role.

Why Intel's stock hinges on Terafab

Terafab excitement has been a big driver behind Intel's stock surge this year, according to D.A. Davidson managing director Gil Luria, who spoke to MarketWatch on Monday. Intel has rallied more than 200%, with other chipmakers posting similar gains on demand for AI hardware.

That rally carries a catch. If Intel ultimately has no role in Musk's chip-building facility, or ends up as just one fab technology provider among several, "investors may reconsider the credit they gave Intel," Luria said.

Wednesday's coordinated pushback from Tan and Musk signals both sides understand that risk. But with Musk having already publicly opened the door to TSMC on Saturday, Intel's claim on the trillion-dollar project may stay a live question for the market.