Intel Falls Premarket After Musk Says TSMC Is in Talks on Terafab Venture

INTC shares fell more than 4% in premarket trading on Monday after reports that TSMC is in discussions with Elon Musk's Terafab chip venture about a possible collaboration. On Sunday, Musk wrote on X, "Just discussions, but something may come of it," which confirms talks exist without describing a deal. MarketWatch's headline calls this a hint, and Barron's headlined it as a "setback" for the chipmaker. The drop narrowed during the session: Tikr reported Intel down roughly 2% on Monday, and a delayed SentiSense snapshot showed INTC at $117.11, down 1.9%.

Intel joined Terafab in April 2026, and its 14A process is the facility's only named process technology. Terafab is a Tesla and SpaceX venture planned for Grimes County, Texas, and Tom's Hardware reported it is set to supply TSLA, SpaceX and xAI exclusively, and that TSMC's involvement could push Intel's 14A out of the picture. According to a Culpium newsletter report on October 2, the most probable structure has TSMC owning and operating the Texas site with Terafab as an anchor customer, the model TSMC used in its JASM venture in Japan and ESMC in Germany. TSM rose about 1% in U.S. premarket trading and its Taiwan listing closed up 3%.

The timing added pressure. Susquehanna analysts said Monday that Intel likely kept losing CPU model share in the third quarter, to 68.1% from a level 3.9 points higher, while AMD rose to 29.3% and Qualcomm reached a record 2.2%; Intel's desktop share of about 76% would be its lowest since the second quarter of 2023. That call concerns PC processors, not Terafab, so the share data and the Terafab news are separate pressures landing on the same day.

Intel's foundry business is the part of the story most exposed to a Terafab outcome. 24/7 Wall St. reported Intel Foundry lost $2.1 billion on $5.8 billion of revenue in the second quarter, with just $293 million coming from external customers, a figure Tikr also cites. Terafab's first phase carries $16.8 billion of committed capital, per Tikr. Neither Musk nor Intel has said what role TSMC would take or whether Intel's 14A commitment changes, so the open question is whether any agreement emerges and whether Intel's 14A slot is kept alongside it.