Musk says Tesla and SpaceX will run the $16.8 billion Texas fab on Intel's unproven 14A process
Tesla and SpaceX will build and run the $16.8 billion Texas fab themselves, Musk says, with TSMC at most a subtenant. Intel keeps the 14A assignment, and its filing shows outsiders paid its fabs $293 million last quarter.
Vincent Jiang · 3 min read
Musk draws the line on who runs the fab
Barron's framed October 9 as the day Elon Musk made clear who will own and operate Terafab: Tesla rose 2.05% that day, still down 17% for the year 1. The line itself came on X two days earlier, in capitals: "No, we will build and run the fab. Let there be ZERO doubt about that. Maybe TSMC−1.02% — TSMC, down 1.02 percent today subleases part of the Terafab if they want, but nothing more than that." 2 The same day, Intel−2.43% — Intel, down 2.43 percent today chief executive Lip-Bu Tan told Bloomberg that Intel will keep working on the project 23.
April gave Intel's unproven node its anchor customer
Intel signed on in April to help design, build and package chips for the Tesla-SpaceX-xAI venture, with Terafab running Intel's 1.4-nanometer 14A node, the process Tan had staked the leading-edge business on 23. August brought the Grimes County site, a $10 million payment to the county, phase one at $16.8 billion and 3,000 jobs 36. Texas filings list a December 1 construction start, and total spend could reach $119 billion 68.
The re-rate runs on $293 million a quarter
Intel's own filing sizes what outsiders actually pay its fabs: $293 million in external foundry and assembly revenue in the quarter ended June 27, $467 million for the half, up from $22 million a year earlier 5. The foundry segment billed Intel's own product groups most of its $5.8 billion that quarter and still lost $2.1 billion on operations 5. Shares trade near $105, roughly tripled this year by one count, with no disclosed price, volume or ramp obligation behind the Terafab assignment 26. The TSMC talks began when Terafab managers questioned whether Intel could deliver 14A at all 4.
Outside customers paid Intel's fabs $293 million last quarter, up from $22 million a year earlier
Data
| External foundry revenue | |
|---|---|
| Q2 2025 | $22 |
| Q1 2026 | $174 |
| Q2 2026 | $293 |
Outsiders paid 5% of what Intel's foundry billed last quarter, and the segment still lost $2.1 billion
Data
| Q2 2026 | |
|---|---|
| Foundry segment revenue | $5,800M |
| External customers' share | $293M |
| Operating loss | -$2,100M |
Thirty years of know-how, or a Mars shot
The bull case, from Hanwha analyst Park Joon-yong: Intel's production experience lets Musk's companies skip building a process from scratch 7. The bear case, from a Samsung official and a source familiar with TSMC's inner workings: yield tuning takes 30 years, and Musk would find it easier to send Starship to Mars than to hold stable yields at Terafab 7. TSMC chairman C.C. Wei puts a normal fab at two to three years to build and one to two more to reach full output. Tesla+2.08% — Tesla, up 2.08 percent today and SpaceX+1.40% — SpaceX, up 1.40 percent today have never run one 3.
The tell is December 1
Watch whether concrete pours on December 1 with a disclosed Intel contract behind it. None is public today, and first-phase completion is targeted for the end of 2028 6. Intel staked its leading-edge future on a customer who owns the factory, and the customer is now shopping the landlord's biggest rival.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
