TSMC stock hits record high after Elon Musk confirms Texas Terafab talks

Shares in Taiwan Semiconductor Manufacturing Company reached an all-time high on Monday after Elon Musk confirmed that the company is in early discussions to help run his planned Terafab chipmaking plants in Texas.

The venture is Musk's effort to establish a dedicated semiconductor manufacturing hub in the United States to supply chips directly to Tesla, SpaceX and his artificial intelligence venture, xAI.

Musk acknowledged the talks over the weekend on his social media platform X, responding to a screenshot of an industry newsletter by technology journalist Tim Culpan. Culpan reported that TSMC was examining ways to partner with Terafab to assist in operating the upcoming Texas facilities.

"Just discussions, but something may come of it," Musk posted in response.

Investors moved quickly on the confirmation. TSMC's US-listed shares climbed to an unprecedented peak on Monday, extending a run that has seen the stock gain more than 60% since the start of the year.

What is the Texas Terafab project?

Terafab represents Musk's push to secure sovereign silicon manufacturing capacity for his companies, reducing reliance on commercial chip supply chains that have faced severe bottlenecks during the recent surge in artificial intelligence development.

The initiative is designed to produce specialised silicon for autonomous driving systems, rocket avionics, satellite networks and large-scale AI model training across Tesla, SpaceX and xAI.

Musk had already enlisted Intel, which agreed in April to take part in the Terafab project as part of its own foundry revival strategy. However, the revelation that TSMC might also join the venture rattled Intel investors. Intel shares slid by more than 2% following Musk's comments, amid concerns that TSMC's manufacturing expertise could overshadow Intel's role in the Texas operation.

Why TSMC's involvement matters

TSMC is the world's dominant contract chipmaker, producing the advanced processors that power hardware for Apple, Nvidia and AMD. The company has seen its order books swell over the past two years, buoyed by global demand for high-performance computing hardware built specifically for artificial intelligence.

The Taiwanese foundry is already deep into a multibillion-dollar expansion in the United States, building fabrication facilities in Arizona to satisfy US client demands for domestic production. Taking on a collaborative role in Texas would broaden that footprint and give TSMC direct ties to Musk's growing network of tech and aerospace firms.

Neither TSMC nor representatives for Terafab have outlined what specific form the partnership might take, or whether TSMC would provide proprietary process technology, factory operational management, or direct capital investment. For now, the discussions remain exploratory, but Musk's public acknowledgement was enough to convince markets of the project's scale.