---
title: "Musk says Tesla and SpaceX will run the $16.8 billion Texas fab on Intel's unproven 14A process"
description: "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."
publisher: "The Inference"
section: "Silicon"
published: 2026-10-11T15:29:50.488Z
modified: 2026-10-11T15:29:50.488Z
canonical: https://theinference.org/article/musk-says-tesla-and-spacex-will-run-the-16-8-billion-texas-fab-on-intel-s-unproven-14a-process
language: en
keywords: "Tesla, SpaceX, Intel, TSMC, Elon Musk, Semiconductors"
---

# 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.

## Musk draws the line on who runs the fab

Barron's framed October 9 as the day [Elon Musk](https://theinference.org/markets/people/elon-musk) made clear who will own and operate Terafab: [Tesla rose 2.05% that day, still down 17% for the year](https://www.barrons.com/articles/tesla-stock-price-elon-musk-terafab-3a1e3322) [1]. The line itself [came on X two days earlier, in capitals](https://finance.yahoo.com/technology/articles/musk-rejects-rumors-tsmc-takeover-152000102.html): "No, we will build and run the fab. Let there be ZERO doubt about that. Maybe [TSMC](https://theinference.org/markets/companies/tsmc) subleases part of the Terafab if they want, but nothing more than that." [2] The same day, [Intel](https://theinference.org/markets/companies/intel) chief executive Lip-Bu Tan told Bloomberg that Intel will keep working on the project [2][3].

## 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](https://www.teslarati.com/elon-musk-shuts-down-talk-of-tsmc-taking-over-terafab/), with Terafab running [Intel's 1.4-nanometer 14A node](https://theinference.org/article/intel-14a-courts-eight-giants-on-paper-while-tsmc-collects-cash), the process Tan had staked the leading-edge business on [2][3]. [August brought the Grimes County site, a $10 million payment to the county, phase one at $16.8 billion and 3,000 jobs](https://startupfortune.com/musk-and-intel-are-building-a-chip-factory-bigger-than-the-pentagon-apple-park-and-mall-of-america-combined/) [3][6]. Texas filings list a December 1 construction start, and [total spend could reach $119 billion](https://finance.yahoo.com/video/terawulf-expands-muskie-1-gw-201417020.html) [6][8].

## The re-rate runs on $293 million a quarter

[Intel's own filing](https://www.sec.gov/Archives/edgar/data/50863/000005086326000157/intc-20260627.htm) 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 [2][6]. [The TSMC talks began](https://theinference.org/article/musk-confirms-tsmc-talks-for-terafab-the-ownership-split-decides-who-eats-the-16-8-billion) when Terafab managers [questioned whether Intel could deliver 14A at all](https://www.techpowerup.com/353453/intel-to-continue-working-on-terafab-confirms-ceo-lip-bu-tan) [4].

*Chart: **Outside customers paid Intel's fabs $293 million last quarter, up from $22 million a year earlier** Column chart of Intel's external foundry and assembly revenue: $22 million in Q2 2025, $174 million in Q1 2026, $293 million in Q2 2026.*

*Third-party foundry and assembly/test revenue from external customers, per Intel's Form 10-Q for the quarter ended June 27, 2026, filed July 24, 2026; Q1 2026 derived as the six-month total minus Q2. Dollars in millions. [5]*

*Chart: **Outsiders paid 5% of what Intel's foundry billed last quarter, and the segment still lost $2.1 billion** Column chart comparing, for one quarter, Intel Foundry's $5.8 billion of revenue, $293 million of it from external customers, and a $2.1 billion operating loss.*

*Intel Foundry segment, quarter ended June 27, 2026: $5.8 billion of revenue, most of it billed to Intel's own product groups, $293 million of it from external customers, against a $2.1 billion operating loss. Per Intel's Form 10-Q filed July 24, 2026. Dollars in millions. [5]*

## 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](https://wccftech.com/elon-musk-would-be-better-off-sending-rockets-to-mars-than-productively-making-chips-through-terafab-says-individual-knowledgable-about-tsmcs-internal-affairs/): 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](https://theinference.org/markets/companies/tesla) and [SpaceX](https://theinference.org/markets/companies/spacex) 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.

## Takeaway

Musk says Tesla and SpaceX will build and run the $16.8 billion Texas fab themselves, with TSMC at most a subtenant; Intel keeps the 14A assignment even though outsiders paid its fabs just $293 million last quarter, and the first test is whether construction starts December 1 with a disclosed contract.

## Sources

1. [Barron's, Tesla Stock Rises as Elon Musk Asserts Control Over Terafab Chip Project, 9 October 2026](https://www.barrons.com/articles/tesla-stock-price-elon-musk-terafab-3a1e3322)
2. [Yahoo Finance, Musk rejects rumors of TSMC takeover of Terafab, 7 October 2026](https://finance.yahoo.com/technology/articles/musk-rejects-rumors-tsmc-takeover-152000102.html)
3. [Teslarati, Elon Musk shuts down talk of TSMC taking over Terafab, 7 October 2026](https://www.teslarati.com/elon-musk-shuts-down-talk-of-tsmc-taking-over-terafab/)
4. [TechPowerUp, Intel to Continue Working on Terafab, Confirms CEO Lip-Bu Tan, 7 October 2026](https://www.techpowerup.com/353453/intel-to-continue-working-on-terafab-confirms-ceo-lip-bu-tan)
5. [Intel Corporation Form 10-Q for the quarter ended 27 June 2026, filed 24 July 2026](https://www.sec.gov/Archives/edgar/data/50863/000005086326000157/intc-20260627.htm)
6. [Startup Fortune, Musk and Intel Are Building a Chip Factory Bigger Than the Pentagon, Apple Park and Mall of America Combined, 30 September 2026](https://startupfortune.com/musk-and-intel-are-building-a-chip-factory-bigger-than-the-pentagon-apple-park-and-mall-of-america-combined/)
7. [Wccftech, Elon Musk Would Be Better Off Sending Rockets To Mars Than Productively Making Chips Through Terafab, 11 October 2026](https://wccftech.com/elon-musk-would-be-better-off-sending-rockets-to-mars-than-productively-making-chips-through-terafab-says-individual-knowledgable-about-tsmcs-internal-affairs/)
8. [Blockspace on Yahoo Finance, TeraWulf Expands Muskie to 1 GW and SpaceX Mulls TSMC for Terafab, 5 October 2026](https://finance.yahoo.com/video/terawulf-expands-muskie-1-gw-201417020.html)


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Musk says Tesla and SpaceX will run the $16.8 billion Texas fab on Intel's unproven 14A process — The Inference. Canonical: https://theinference.org/article/musk-says-tesla-and-spacex-will-run-the-16-8-billion-texas-fab-on-intel-s-unproven-14a-process