Intel Chief Executive Officer Lip-Bu Tan just doubled down on a massive new business relationship. During a highly anticipated earnings call on Thursday, Tan proudly confirmed that Intel will team up with Elon Musk. The companies will work together across Tesla, SpaceX, and a brand new project called TeraFab. Musk first revealed the team-up during his own Tesla earnings report on Wednesday, but Tan used Thursday to explain exactly why this deal matters so much. He told investors that he could think of absolutely no better partner than the controversial billionaire to help launch Intel’s upcoming 14A manufacturing node.
Tan spent his opening remarks reflecting on the deep history of his company. He reminded listeners that Intel spent the last 6 decades taking calculated risks. These early gambles eventually led to massive improvements in chip density, overall cost, and performance. Now, Tan wants to challenge the current rules of the tech industry. He firmly believes that the global semiconductor supply chain simply cannot keep up with the massive explosion in consumer demand.
The exact legal details of this new partnership remain a complete mystery. Financial analysts suspect that TeraFab will simply license the advanced 14A node technology directly from Intel. This clever shortcut would allow TeraFab to get a factory up and running very quickly without wasting billions of dollars on developing a new chip process from scratch. However, neither Musk nor Tan will confirm if they signed a simple licensing agreement or a much deeper operational contract.
Tan strongly hinted that the two companies plan to do much more than just sign basic licensing papers. He told investors that both men share a strong desire to change how factories build silicon chips completely. They want to explore highly unconventional methods to improve daily manufacturing efficiency. If they succeed, this teamwork will significantly improve the basic economics of semiconductor manufacturing. By working together, Intel and TeraFab hope to shorten the time required to reach full factory production.
This massive deal arrives exactly when the Intel Foundry business needs a heroic rescue. The manufacturing division lost serious money last year and continues to operate deep in the red. The company reported a brutal negative 45 percent operating margin for the first quarter of 2026. While this number looks bad, it actually represents a decent improvement from the massive negative 71.7 percent margin the division suffered back in the second quarter of 2025. Securing TeraFab as the first major customer for the 14A node provides the struggling division with a much-needed financial lifeline.
When financial reporters pressed Tan for more specific details about the TeraFab contract, the chief executive carefully dodged the question. He simply stated that both companies share a vision of learning together and exploring innovative manufacturing steps. He described it as a very broad relationship and promised to provide the public with more updates as the project moves forward. Tan also reminded everyone that while Musk brings exciting headlines, Intel is currently in discussions with multiple other potential customers behind closed doors.
Wall Street absolutely loved the surprise announcement. Intel stock sat at exactly $66.78 when the regular market closed on Thursday afternoon. Once news of the Elon Musk partnership hit the wire, traders rushed to buy shares. The stock price immediately jumped 19 percent in after-hours trading, reaching an impressive $79.74 per share. Investors clearly bet that teaming up with Musk will finally help Intel fix its manufacturing problems and once again dominate the computer chip market.
