Taiwan Semiconductor Manufacturing Company stock climbed to a record high above $480 on October 5, 2026, after Elon Musk confirmed early-stage discussions about a potential partnership for his Texas Terafab venture, rattling Intel shares in the process.
Taiwan Semiconductor shares surged to an all-time high on October 5, 2026, driven by strong NVIDIA results and the disclosure of prospective talks regarding Elon Musk’s ambitious semiconductor initiative in Texas as reported by FXLeaders. The American Depositary Receipts for the world’s largest contract chipmaker closed at $485.80, up 2.75% for the day according to GuruFocus. That milestone pushed the equity past its previous peak from June and moved it closer to the psychologically significant $500 threshold noted by FXLeaders.
The market reaction followed reports that Taiwan Semiconductor was exploring ways to help the startup chipmaker operate its upcoming facilities in Texas. Tech journalist Tim Culpan first detailed the discussions in a subscriber newsletter, noting that the most probable arrangement would involve the foundry owning and operating a new manufacturing plant while serving Terafab as an anchor customer according to Business Insider. Culpium Research noted that the most likely scenario is for TSMC to try to own and operate the new factory.
Elon Musk Confirms Early Talks on X
Over the weekend, Musk addressed the reporting publicly on social media in response to a screenshot shared by a user on X documented by Yahoo Finance.
While guarded, the confirmation marked a shift by acknowledging that the two sides are actively communicating. Terafab is designed as a massive semiconductor production hub in Grimes County, Texas, backed by an initial $16.8 billion investment from Tesla and SpaceX to supply advanced chips for autonomous vehicles, humanoid robots, space-based computing, and artificial intelligence systems detailed by Global Sources. Total spending across all phases of the project could eventually reach approximately $119 billion reported by Tikr.
Intel Stock Falls Amid Competitive Pressure
The prospect of a partnership between Musk’s venture and Taiwan Semiconductor sent ripples through the semiconductor sector, hitting Intel shares directly noted by Business Insider. Intel stock dropped about 2% to 4% in trading sessions following the news, touching an intraday low of $115.31 reported by Yahoo Finance and Quartz.
Intel had been the initial and exclusive named chip partner for Terafab since joining the project in April, intending to deploy its next-generation 14A manufacturing process reported by The Motley Fool. Market analysts noted that Intel’s equity valuation had largely priced in the expectation of major external foundry wins. However, outside customers contributed only $293 million in revenue to Intel’s foundry division during the second quarter according to Tikr. The entrance of Taiwan Semiconductor into the picture introduces formidable competition for the Texas project and dampens the exclusivity halo that previously buoyed Intel’s foundry narrative noted by Tikr.
Broader Market Splits as Investors Weigh Capacity Risks
While Taiwan Semiconductor climbed to records, the broader semiconductor exchange-traded funds saw mild downward pressure, with the iShares Semiconductor ETF slipping 0.3% reported by 247Wallst.
Financial analysts point out that the massive capital expenditures pouring into artificial intelligence processing and fabricators carry underlying risks according to FXLeaders. Rapid infrastructure expansion could generate excess manufacturing capacity if global demand fails to keep pace with soaring fab buildouts noted by FXLeaders. No formal agreement between Musk’s enterprises and Taiwan Semiconductor has been finalized, leaving investors watching for whether early talks translate into concrete contractual terms for the Texas facilities reported by 247Wallst.