Intel (INTC.US) Chief Executive Officer Tan Lip-Bu stated that the company will continue its collaboration with Elon Musk on the Terafab project, a bold initiative by the billionaire to venture into cutting-edge chip production.

Earlier this week, Musk revealed that he is in discussions with Taiwan Semiconductor Manufacturing (TSM) regarding a potential partnership related to Terafab. This news dampened investor sentiment toward Intel, which signed on as a development partner for Terafab in April of this year.

Speaking to reporters in Tokyo ahead of an event commemorating the U.S. company's 50th anniversary of entering the Japanese market, Tan said Intel will remain involved in the Terafab project.

The Terafab project is part of a global wave in which governments and companies are racing to expand production capacity for semiconductors and other critical components needed to accelerate the deployment of artificial intelligence applications. Factories producing everything from ball bearings, chip equipment, and industrial chemicals to slide rails are all operating at full capacity, prompting companies to build additional production lines.