Intel shares INTC slipped on Monday after Elon Musk confirmed that Taiwan Semiconductor Manufacturing Co. could participate in his ambitious Terafab chip-making project, raising concerns that the US chipmaker could face competition in a venture that has helped drive its stock sharply higher this year.
Intel shares fell about 2% in morning trading, while TSMC’s US-listed shares gained 1.4%.
Intel has surged about 200% so far this year, compared with a roughly 50% gain for TSMC’s US-listed shares.
TSMC could join Musk’s chip venture
Musk confirmed that TSMC was in discussions about participating in Terafab after an Asian technology Substack reported that the Taiwanese chipmaker was exploring ways to help operate the planned factories.
“In discussions, but something may come of it,” Musk posted on X on Saturday in response to the report from Culpium.
The possibility of TSMC’s involvement raised concerns that Intel may not be the sole or primary manufacturing partner for a project that has become an important part of the investment case for its stock.
Oppenheimer analyst Rick Schafer said one possibility would be “TSMC owning and running a fab that serves only Tesla, SpaceX and xAI, while SpaceX invests or commits to volume,” according to a note to clients published Monday.
Musk later indicated that any chips produced by TSMC would likely supplement, rather than replace, chips supplied by Intel.
Still, the prospect of another major chipmaker joining Terafab could complicate expectations around Intel’s role in the project.
Terafab has fueled Intel’s rally
Musk announced plans for Terafab in March, with Tesla and SpaceX jointly leading the project.
The companies have said they aim to manufacture 1 terawatt of computing capacity annually, roughly twice the amount needed by the entire United States.
Musk had initially discussed a potential deal with Intel in November 2025, saying his companies’ existing suppliers could not produce enough chips to meet their needs.
At the time, Musk said Tesla and SpaceX could require as many as 200 billion AI chips annually.
Tesla already works with Micron Technology, Samsung Electronics and TSMC, with Samsung and TSMC expected to mass-produce Tesla’s next-generation AI5 chips next year at facilities in Texas and Arizona.
Musk has described Terafab as a one-of-a-kind facility capable of producing memory and logic chips as well as advanced packaging for applications including humanoid robots, satellites and data centers.
D.A. Davidson managing director Gil Luria said enthusiasm around Terafab has been a major catalyst behind the “dramatic ascent” of Intel’s stock this year.
“If it turns out Intel does not participate, or is only one fab technology provider, investors may reconsider the credit they gave Intel,” Luria told MarketWatch.
The prospect of working with another manufacturer could also be viewed “as a lack of confidence in trusting the future of his important endeavor to Intel alone,” he added.
Intel faces pressure beyond Terafab
Intel’s competitive challenges extend beyond the Terafab project.
Susquehanna analysts said Monday that Intel likely continued losing CPU model share in both laptops and desktops during the third quarter, while AMD gained ground and Qualcomm reached its highest laptop share yet, Investing.com reported.
Susquehanna estimates Intel’s laptop model share fell 3.9 percentage points from the previous quarter to 68.1%. AMD’s share rose 3.1 points to 29.3%, while Qualcomm increased to 2.2%.
Intel’s new Panther Lake processor, built on its 18A process, accounted for about 1.8% of Intel-based laptop SKUs, up from 0.4% in the previous quarter.
Susquehanna said the ramp was ahead of Lunar Lake’s trajectory but roughly in line with Arrow Lake.
Intel’s desktop model share also declined 1.6 percentage points to about 76%, its lowest level in the firm’s study since the second quarter of 2023.
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