GoKawiilIntel CEO Lip-Bu Tan is doubling-down on a partnership with Tesla and SpaceX, which was revealed Wednesday during Tesla's quarterly earnings. On Thursday, during Intel's earnings, Tan said he "could think of no better partner than Elon Musk," vaguely referring to the partnership with the controversial billionaire, who plans to use Intel's upcoming 14A node.
"Over the last six decades, we have always been willing to take measured risks that have eventually paved the way for step-function improvement in transistor density, cost, power, and performance. As we look to continue challenging the status quo, I can think of no better partner than Elon Musk," said Tan during the open remarks of Intel's quarterly earnings.
The exact details of Intel's partnership with Tesla, SpaceX, and the TeraFab project aren't clear. It appears likely that TeraFab will license 14A from Intel, allowing TeraFab to get a node up and running quickly without developing it completely from scratch. However, neither Musk nor Intel has confirmed it's strictly a licensing deal yet.
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Tan hinted that the partnership could go beyond a simple licensing arrangement. "Elon and I share a strong conviction that global semiconductor supply is not keeping pace with a rapid acceleration in demand," Tan said during the earnings call. "We are excited to explore innovative ways to refactor silicon process technology, looking for unconventional ways to improve manufacturing efficiency that will eventually lead to a dynamic improvement in the economics of semiconductor manufacturing."
TeraFab is the first major customer Intel has scored for 14A, regardless of the specific arrangement. Intel's Foundry business saw declining revenue last year, and it continues operating at a loss, with the company noting a -45% operating margin for Q1 2026, which is up from a low of -71.7% margin in Q2 2025.
When pressed directly about the relationship between Intel and TeraFab during the earnings call, Tan didn't share many more details. "We both share the vision that we're going to learn a lot together, exploring the innovative way, and then in the process of the manufacturing. Saying all this, you know, clearly, it's a very broad relationship. And we will update you as we go. Clearly, this is a very exciting customer to work with, and we have multiple other customers we are engaging," Tan said in response.
One sticking point about the partnership is the global supply chain not keeping pace with demand, suggesting that Intel and TeraFab will work together in an attempt to shrink the time it takes to hit full production.
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Intel's stock was at $66.78 at market close on Thursday, jumping up 19% to $79.74 a share in after-hours trading, likely in response to Intel's comments about its partnership with TeraFab.
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