Why an Intel–Musk Partnership Could Threaten TSMC More Than Terafab Alone

Table of Contents

• You might want to know
• Why an Intel–Musk combination matters
• Key Insights Table
• Afterwards...

You might want to know

• Why might Intel’s participation make Terafab a more consequential challenge for TSMC than Musk building a chip factory on his own?
• Could Intel’s manufacturing expertise overcome the project’s questions about control, funding, and Musk’s long-term attention?

Why an Intel–Musk combination matters

Seaport Research Partners senior semiconductor analyst Jay Goldberg argues that Elon Musk’s potential challenge to Taiwan Semiconductor Manufacturing Company (TSMC) may not come primarily from Musk attempting to build advanced chips by himself. The more consequential possibility, Goldberg says, is that Intel could help Musk build Terafab. That would change the competitive picture from a contest between TSMC and Musk alone into one involving an Intel–Musk combination.

Goldberg, co-host of the semiconductor program The Circuit, made the point in an interview with Benzinga. He said that if he were TSMC, he would be less concerned about having to take on Elon Musk alone and more concerned about facing Intel alongside him. In Goldberg’s view, Intel already represents a serious competitor on its own. Pairing Intel’s manufacturing capabilities with Musk’s ambition and resources could make Terafab more competitive sooner than it might be otherwise.

That possibility remains conditional, however. Intel’s precise role in Terafab has not been made clear. The project’s prospects therefore depend not only on whether the two sides work together, but also on what responsibilities Intel would assume, how production would be organized, and who would control the technology and operating decisions.

Musk said in April that Terafab was planned to use Intel’s next-generation 14A process. Goldberg has also described Intel as having a deep pool of talent. If Intel Chief Executive Officer Lip-Bu Tan leads the manufacturing effort, Goldberg believes the project could move faster. Access to experienced manufacturing personnel and process technology could help address a central challenge for a new semiconductor operation: turning an ambitious plan into a functioning production system.

Still, technical capability is only part of the issue. Goldberg identifies control over intellectual property (IP) as a potential source of friction. Musk has insisted that he wants to retain control of the project’s IP, while that preference may not align easily with Intel’s traditional foundry model. A partnership would have to establish how designs, process technology, ownership, and manufacturing responsibilities fit together. Without clarity on those questions, even a strong manufacturing partner might not resolve the project’s structural challenges.

Goldberg said a very real contest between TSMC and Intel is beginning to take shape, adding that a year earlier he had not expected this kind of competitive landscape to emerge. The change reflects the possibility that Intel could become more than a supplier or prospective manufacturing partner: it could be part of a broader effort to compete in advanced chip production. TSMC Chair and Chief Executive Officer C.C. Wei said in April that Intel is a strong competitor, while emphasizing that there are no shortcuts in wafer manufacturing.

Goldberg is also cautious about portraying Terafab as a straightforward showdown between Musk and TSMC. Asked whether the project could become a decisive contest between the two, he said that framing assumes a higher probability of success than he is currently willing to assign. The distinction matters: Terafab may be technically possible and strategically significant without becoming a high-volume commercial operation on its announced ambitions or timetable.

Intel has a clear business incentive to participate. The company has previously said that, without a major external customer, it might not move its 14A technology to high-volume production. Its latest quarterly report confirmed that development of the process will continue. A Terafab commitment could therefore provide an important customer outlet for 14A and help Intel regain momentum as it rebuilds its foundry business. For Intel, the project could potentially address both a technology-development need and a customer-demand challenge.

But relying too heavily on Musk’s long-term commitment would create risks for Intel. Goldberg framed the concern directly: if he were Intel, he would wonder whether Musk might lose interest in the project two years later. Musk’s many businesses and priorities could affect the continuity of Terafab, while the project’s scale could require sustained attention and funding over an extended period. A partnership could strengthen Terafab’s manufacturing prospects, but it would also expose Intel to the uncertainty of Musk’s long-term focus.

Musk said in early October that Tesla and SpaceX would build and operate their own facilities. TSMC, by contrast, has only been reported as a possible tenant in part of the Texas site, with no role in operating it. Goldberg questioned whether the plan represented a serious effort to build a semiconductor factory or might instead become a real-estate transaction involving Intel. His remark underscores the gap between a stated intention to create manufacturing capacity and a clearly defined arrangement for building and running a fab.

The projected schedule and cost further illustrate the scale of the undertaking. Goldberg previously estimated that Terafab might begin operating in 2028, while commercial-scale production could be delayed until 2030. On Wednesday (21), Musk said during an earnings conference that the project’s eventual cost could exceed $100 billion. Tesla and SpaceX are still working out how to divide the funding. A day earlier, Musk had disclosed that the two companies had established a special committee to assess a possible merger. Polymarket odds currently put the chance of a formal merger announcement by the end of 2027 at about 70%.

Those figures describe a project that could demand substantial capital and coordination. Building a fab is not the same as securing a site or announcing a production target: advanced manufacturing requires sustained investment, technical execution, customer planning, and operational discipline. The possibility of a Tesla–SpaceX merger may affect how observers think about funding and organizational structure, but it does not by itself settle how Terafab would be financed or managed.

If Terafab succeeds, Goldberg identifies TSMC as the biggest potential loser. Intel’s position, he suggests, would resemble a “jump ball” in basketball: the outcome could be very good or very bad. Terafab might offer Intel a valuable customer and a way to advance its foundry ambitions, but it could also tie Intel to a project with uncertain execution, funding, and leadership continuity.

Goldberg’s overall assessment is that Terafab is feasible, ambitious, and achievable. The main constraints, in his view, are the allocation of capital and Musk’s attention. That judgment is more nuanced than either dismissing the project or treating it as an assured rival to TSMC. Intel’s participation could make the threat more substantial by adding manufacturing experience and a strategic incentive, but the partnership’s structure and durability remain unresolved.

Key Insights Table

Afterwards...

Terafab’s significance will depend on whether its potential partnership becomes a clearly defined manufacturing operation supported by sustained investment and a workable division of control. Intel could bring capabilities that make the project more credible and offer a meaningful customer opportunity for its 14A process. At the same time, questions about IP, funding, operating responsibilities, and Musk’s long-term engagement remain central.

For TSMC, the emerging issue is not simply whether Musk can build a fab, but whether Intel can help convert his ambition into a sustained manufacturing competitor. For Intel, Terafab could be a major opening—or a high-stakes commitment to an uncertain project. The competitive implications will become clearer as the companies define their respective roles and demonstrate whether the plan can progress from announcement to production.