Intel shares jumped in premarket trading Wednesday after Elon Musk and Intel Chief Executive Lip-Bu Tan moved to tamp down speculation that Taiwan Semiconductor Manufacturing Co. would take a bigger role in the Terafab chip project. Musk said on X that his company would “build and run the fab,” while Tan told Bloomberg News that Intel’s involvement “will continue.” The clash between rumor and reassurance has turned a Texas megaproject into the latest live-wire trade in the chip sector, with TSMC shares slipping before the opening bell.
The move matters because Terafab is not a side bet. The Tesla-SpaceX joint venture in Grimes County, Texas, is targeting over 1 terawatt of annual AI compute capacity, a scale that puts it squarely in the center of the race to build the hardware behind artificial intelligence. Intel was brought in as the sole named manufacturing partner in April, and the facility’s only identified technology is Intel’s 14A process node. For a company trying to rebuild its standing as a foundry, that makes every headline about the project potentially stock-moving.
Premarket trading showed how quickly the market latched onto the latest clarification. Intel rose 1.6% in premarket Wednesday after falling 3.2% on Tuesday, according to Investing.com. TipRanks reported the stock up 3% before the open. TSMC ADRs were down 1.3% in premarket trading Wednesday, also according to Investing.com. The split-screen reaction suggests investors read Musk’s latest comments as a direct boost to Intel and a check on any notion that TSMC might be stepping in as a larger manufacturing partner.
The spark for the latest round of speculation came from outside the company. The TSMC chatter originated with the Culpium newsletter from Tim Culpan, according to CNBC and Investing.com. Musk then acknowledged the report on Saturday, writing that there were “just discussions, but something may come of it.” He later responded “True” on X to a post describing TSMC’s role as supplemental. That left room for interpretation, and in markets, room for interpretation is often enough to move a stock.
Intel’s role now appears to be back on firmer footing. Tan told Bloomberg News ahead of a Tokyo event that Intel’s involvement in Terafab “will continue.” Musk, meanwhile, used much sharper language on X, saying his company “will build and run the fab. Let there be ZERO doubt about that,” according to Investing.com. The statement was designed to close the door on the idea that another chipmaker would displace Intel, even if a separate sublease arrangement with TSMC remains possible for part of the site.
Terafab’s scale explains why the market is watching each sentence so closely. The project’s first-phase investment is $16.8 billion, with total potential spending up to $119 billion, according to Investing.com and Seoul Economic Daily. That kind of spending means the project’s construction plan is not just a technical question but a capital-allocation story. The more the market believes Intel’s work will stick, the more the company’s foundry ambitions look tangible. The more the market sees uncertainty, the more each rumor becomes a test of confidence.
Intel’s strategy has been under pressure for years as it tries to win outside customers for its manufacturing business. Terafab gives the company a marquee reference point, and the 14A process node being the only identified technology at the site puts a spotlight on whether Intel can execute at the cutting edge. For investors, the project is not just about one factory in Texas. It is a signal about whether Intel can turn advanced process technology into a business that matters beyond its own chip designs.
There is also a timing issue that investors can’t ignore. Intel is expected to release the 14A process design kit this month, according to an InvestingLive summary cited by Investing.com. That release will serve as a test of outside customer commitment. In plain terms, it is one more checkpoint on whether other buyers want in on Intel’s manufacturing push. If the design kit draws interest, it could strengthen the case that the foundry story is real. If it does not, the market may start asking harder questions again.
The next product milestone for Terafab is still distant. First products are scheduled for release in mid-2028, according to Seoul Economic Daily. That leaves a long runway for the story to swing with every update, rumor, and executive comment. For a project this large, the market is not pricing a finished factory so much as a chain of credibility tests. Musk’s latest insistence that his company will “build and run the fab” is one of the loudest so far.
That is why Tan’s reassurance landed with investors. When the Intel chief says involvement “will continue,” he is not just answering a rumor. He is backing Intel’s role in one of the most closely watched chip projects in the market. For Intel, the payoff is the possibility of proving it can still be central to advanced manufacturing. For TSMC, the immediate effect was the opposite: a weaker premarket tape and a reminder that even speculative mentions can affect a mega-cap chip stock.
The bigger question is whether the market sees Terafab as a one-off story or a window into the next phase of the AI buildout. A project aiming at over 1 terawatt of annual AI compute capacity is bound to attract attention from investors looking for the physical backbone of the AI boom. But the stock reaction Wednesday also shows something narrower and more immediate: in chipmaking, control of the narrative can be as valuable as control of the fab.
For now, the narrative is back where Musk and Intel want it — with Intel inside the plan, TSMC only a possible side arrangement, and the market responding in real time. The next real test comes with the 14A design kit later this month, when investors will get a better read on whether the project is drawing fresh demand or just another round of headline-driven hope.
