INTC Stock Jumps Overnight: CEO Says Intel Will Keep Working With Musk's Terafab Amid TSMC Partnership Buzz

• Lip-Bu Tan said Intel will continue working with Musk’s Terafab project.
• Musk said TSMC could potentially sublease part of the facility, but Intel will remain involved.
• Intel’s foundry business is showing signs of recovery, with revenue growth and new external customers.

Intel Corp. (INTC) shares jumped about 2.5% in overnight trading heading into Wednesday after CEO Lip-Bu Tan said the chipmaker will continue working with Elon Musk’s Terafab, easing concerns that Taiwan Semiconductor Manufacturing Co. (TSM) could displace Intel in the ambitious chipmaking project.

Intel will remain involved in Terafab, Tan told Bloomberg. His comments come after Musk said earlier this week that he was in discussions with TSMC over a potential collaboration around Terafab, weighing on investor sentiment toward Intel.

Musk Clarifies TSMC’s Potential Terafab Role

Musk sought to put those concerns to rest Wednesday, writing on X: “No, we will build and run the fab. Let there be ZERO doubt about that.” He added that TSMC could potentially sublease part of the Terafab facility if it wanted, “but nothing more than that.”

The comments followed Musk’s post earlier this week saying he was in discussions with TSMC. “Just discussions, but something may come of it,” Musk had said in response to a report about a potential partnership.

INTC stock fell 2.6% Monday and another 3.2% Tuesday as investors assessed what a TSMC role could mean for Intel’s position in the project.

Intel Remains Terafab Development Partner

Intel signed on as Terafab’s development partner in April, making the chipmaker a key part of Musk’s ambitious semiconductor manufacturing facility. 

The project, which is under development, involves building and operating a large-scale semiconductor manufacturing facility for chips needed across Musk’s companies and their AI ambitions.

Tan’s comments suggest Intel’s involvement in Terafab remains intact despite TSMC’s potential participation, while Musk has added a new dimension by saying TSMC could potentially sublease part of the facility even as he weighs ​partners for the venture.

Intel Revives Fab Business

Intel’s foundry business has shown signs of recovery, with Foundry revenue rising 16% year over year to $5.4 billion in the first quarter and 31% to $5.8 billion in Q2, while its operating loss narrowed to $2.1 billion in the latest quarter.  

Intel has also been adding external customers and partnerships, including Amazon Web Services and Apple, while working with potential customers to qualify its next-generation 14A process. 

Retail View On INTC

On Stocktwits, retail sentiment for INTC remained ‘bearish’ for a second day on Wednesday, even as traders posted upbeat commentary after Tan’s comments.

“$INTC loaded up in the last hour yesterday. Let’s hope the trend continues upward,” said a trader. INTC stock is up 205% year to date.

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