Intel stays on board with Elon Musk’s Terafab chip venture
The chipmaker will keep working on the Texas mega-project even after Musk revealed early talks with TSMC
Intel is not walking away from Elon Musk’s biggest hardware bet. The chipmaker will keep working with Musk on Terafab, his large-scale chipmaking project, according to Bloomberg.
Earlier in October, Musk revealed that he had held discussions with Taiwan Semiconductor Manufacturing Company. That left investors wondering whether Intel’s seat at the table was about to get crowded.
What Terafab is trying to build
Terafab is Musk’s attempt to manufacture ultra-high-performance chips for artificial intelligence and robotics. Three Musk companies sit behind it: Tesla, SpaceX and xAI.
The planned Texas facility targets a compute capacity of 1 terawatt annually.
The main site sits in Grimes County, Texas. Its initial planned investment exceeds $16.8 billion, with total spending potentially reaching up to $119 billion across multiple phases.
Intel joined the effort on April 7, 2026. It was the first named foundry partner, announced alongside SpaceX, xAI and Tesla.
Tesla added a technical detail later that month. During its Q1 2026 earnings call in late April, the company indicated it aims to use Intel’s 14A manufacturing process for Terafab.
Intel CEO Lip-Bu Tan met Musk face to face before the April announcement and described the engagement as “highly strategic.”
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Enter TSMC
Until October 3, 2026, Intel was the only publicly named chip manufacturing partner on the project. Then Musk disclosed talks with TSMC. Those conversations have been described as preliminary and informal.
Intel’s stock price showed noticeable fluctuations after the TSMC discussions surfaced.
No specific financial commitments tied to Intel’s role have been made public, and neither has the exact scope of its participation.
What this means for Intel and the chip race
For Intel, Terafab is a high-profile customer relationship with a famously demanding buyer. Continued involvement gives the company a role in one of the most closely watched US chip projects, and a visible test case for its 14A process.
Without disclosed financial terms or a defined scope, Intel’s share of a project that could eventually reach up to $119 billion remains an open question.
There are several things worth watching from here. The first is whether Intel and the Terafab companies publish financial terms or production targets tied specifically to Intel.
The second is whether TSMC’s talks move past the preliminary stage. A formal TSMC agreement would clarify how work gets divided, and how central Intel really is.
The third is progress on the Grimes County site itself. The jump from an initial $16.8 billion-plus plan to a potential $119 billion buildout will happen in phases, and each phase will show whether the 1 terawatt ambition is moving from slide deck to construction site.
Finally, watch Tesla’s commentary on 14A. If Tesla keeps pointing to Intel’s process in future earnings calls, that is a stronger signal of Intel’s long-term role than any single headline about who Musk is talking to.