Elon Musk moved to end speculation over TSMC potentially taking operational control of the Terafab AI chip complex.
Writing on X on Wednesday, Musk said his company would build and operate the fabrication facility itself. He added that there should be “zero doubt” about who would control the project.
TSMC could still become involved through a possible sublease of part of the site, but Musk made clear that operational control would remain with his companies.
Intel Shares Rise as TSMC Falls
The comments quickly affected semiconductor stocks.
TSMC’s U.S.-listed shares fell around 1.3% in pre-market trading on Wednesday. Meanwhile, Intel gained approximately 1.6% ahead of the market open.
Intel had fallen 3.2% on Tuesday amid concerns that the company could lose its position in the Terafab project.
Intel CEO Lip-Bu Tan also told Bloomberg News that the chipmaker would remain involved in the development.
What Is the Terafab Project?
Terafab is a joint Tesla and SpaceX initiative planned for Grimes County, Texas.
The massive AI infrastructure project is designed to provide more than one terawatt of annual artificial intelligence computing capacity.
The facility is expected to support several Musk-led businesses and projects, including Tesla’s Optimus humanoid robots, Cybercab autonomous vehicles, SpaceX space-based data centers and xAI operations.
Terafab Could Require Up to $119 Billion
The initial investment in Terafab is expected to reach $16.8 billion.
However, total spending across all development phases could eventually rise to as much as $119 billion.
The project is also expected to create at least 3,000 jobs once fully developed.
Intel Remains a Key Manufacturing Partner
Intel was announced as the only named manufacturing partner for Terafab in April.
Its next-generation 14A semiconductor process was selected as the only publicly identified manufacturing technology for the facility.
The partnership represents an important win for Intel as it attempts to expand its foundry business and compete more aggressively in advanced semiconductor manufacturing.
TSMC Discussions Sparked Market Speculation
Speculation around TSMC emerged after the Culpium newsletter reported that the Taiwanese chipmaker was considering using Terafab as an anchor customer for a future semiconductor factory in Texas.
Musk later confirmed that discussions had taken place.
However, he described them as preliminary talks and stopped short of suggesting that TSMC would take control of the Terafab facility.
His latest comments appear to have significantly reduced expectations of a major operational role for TSMC.
Terafab Could Be Crucial for Intel Foundry
The outcome is particularly important for Intel.
The company generated only $293 million in external foundry revenue during the second quarter, meaning Terafab represents one of its most prominent outside manufacturing agreements.
Intel’s commitment to supply its 14A technology also gives the company a strategic foothold in one of the largest proposed AI infrastructure projects in the United States.
For Intel, maintaining its role in Terafab could therefore provide both financial benefits and greater credibility for its long-term foundry strategy.
