Shares of Taiwan Semiconductor shifted sharply higher on October 5, climbing 3.5% to ARS 85,750 on Buenos Aires markets, after Elon Musk confirmed he is in early-stage discussions about involving TSMC in chip facilities planned by his Terafab venture in Texas. The move extends a five-session winning streak that has added roughly 5.8% since September 25, but the question for shareholders is whether talk alone warrants the enthusiasm. TSMC-Terafab Texas Talks Light Up Shares, but Does a Handshake Without a Deal Deserve a $3 Billion Cheer?
Shares surged as reports confirmed that the world's dominant chipmaker is now in direct conversation with Elon Musk's ambitious semiconductor venture—raising the prospect of a massive new U.S. revenue stream for TSMC while threatening to upend its existing partner dynamics.
Musk Said the Talks Are Real, but There Is No Deal Yet
Musk wrote on X: "Just discussions, but something may come of it."
He characterized the talks as early stage, and no agreements have been reached.
Two possible structures are under discussion: one where TSMC would own and operate the Texas facility with Terafab as anchor customer, and another where TSMC would supply manufacturing know-how while other investors hold majority ownership. For shareholders, the upside is clear but entirely conditional—nothing is signed.
The Prize Is Enormous: A $16.8 Billion-Plus Facility
SpaceX and Tesla announced an initial investment of approximately $16.8 billion for the Grimes County, Texas site.
Analysts have pegged the full multi-phase complex at $20–55 billion.
Musk's long-term target is 1 million wafer starts per month, producing 100 to 200 billion custom AI and memory chips per year. If TSMC lands the operating role, it would gain a captive, high-volume customer—similar to its joint ventures in Japan and Germany—layered on top of a $265 billion Arizona commitment that already draws from a customer base generating roughly 75.6% of TSMC's revenue from U.S. clients.
Intel Is the Immediate Loser—and That Matters for TSMC's Pricing Power
Intel was previously the only named manufacturing partner for Terafab. TSMC's entry into discussions materially alters the competitive landscape.
Intel shares fell 4% on the news. If TSMC displaces Intel's 1.4-nanometer process commitment at Terafab, it reinforces its dominance in leading-edge fabrication and strengthens its hand in pricing negotiations across its entire customer roster.
The Risk: TSMC Is Stretching Its Capital Across Two Continents
TSMC's total U.S. investment pipeline in Arizona alone has reached $265 billion, with full-year capital expenditure revised to $60–64 billion. Adding a Texas mega-campus would further strain engineering talent and equipment supply chains. The ownership structure and TSMC's eventual role remain under discussion, and operating and investment arrangements have yet to be finalized. A 3.5% pop on preliminary talks prices in a meaningful probability of a deal that may never materialize—or may look very different when the fine print arrives.