Intel Stock Rises 3% as Musk Plans 14A Chips for Tesla, SpaceX Terafab

This article first appeared on GuruFocus.

Intel (NASDAQ:INTC) shares rose about 3% on early Thursday after Elon Musk said Tesla (NASDAQ:TSLA) and SpaceX will use Intel's 14A process for a planned Terafab, giving Intel a fresh sign of interest in its manufacturing turnaround, according to a Wednesday earnings call.

Intel has been spending heavily to rebuild its chipmaking position and compete with Taiwan Semiconductor Manufacturing Co. (TSM). Musk said the process is still under development, but he expects it to be mature by the time the facility begins operating.

Tesla and SpaceX would use the Intel technology in a semiconductor plant meant to support their AI work, Musk said. He added that the Terafab would help address a shortage of advanced chips as demand for AI infrastructure keeps climbing.

Intel is due to report earnings on Thursday. The comments add a new customer-facing angle for Intel as it looks to show progress on 14A, while memory chip suppliers including Samsung Electronics, SK Hynix and Micron Technology (NASDAQ:MU) face tight supply conditions.