Intel stock dropped 3% at the start of the week, hitting a low of $115.31, after Elon Musk signaled that TSMC could join the Terafab semiconductor project — a plan Intel had joined just months earlier and that investors had treated as a major Intel win.

The decline came in response to a weekend post from Musk about a report by tech journalist and researcher Tim Culpan of Culpium Research, who claimed Taiwan Semiconductor Manufacturing Company could work with Terafab, the semiconductor plant being developed by Tesla, SpaceX, and Intel. Musk addressed the report on Saturday, responding to a post sharing Culpan's findings: "Just discussions, but something may come of it."

What does Musk's comment change?

Nothing is signed. There is no deal yet between Musk's companies and TSMC, but the market's reaction reflects a repricing of expectations. Investors who had been betting on Intel as the top hardware beneficiary of Terafab now face the possibility that the Taiwanese foundry could take a much bigger role in the project.

The scale of Intel's prior rally underlines how much was priced in. Even after the 3% drop at Monday's open, Intel shares remain up 213% year to date. TSMC shares, by contrast, rose about 1% on Monday.

Retail sentiment shifted too. Data from Stocktwits shows that sentiment among retail investors turned bearish on Intel following Musk's post — a rapid reversal for a stock that had been one of the market's strongest performers this year.

How did Intel get here?

Intel joined the Terafab project in April, and the stock rallied on the news at the time. The project — described as Musk's chip moonshot — pairs Tesla, SpaceX, and Intel in a planned semiconductor plant intended to supply hardware for the companies' AI, satellite, and automotive ambitions.

That positioning made Intel the presumptive manufacturing anchor of the effort. Culpan's report, and Musk's decision to engage with it publicly rather than dismiss it, opened the door to a different structure — one in which TSMC, the world's leading contract chipmaker, plays a central role.

Culpan laid out the scenario in the note that prompted Musk's response. "The most likely scenario is for TSMC to try to own and operate the new factory," he wrote.

Why does a TSMC role matter for Intel?

For Intel, the stakes are straightforward. A TSMC-owned and operated Terafab factory would marginalize Intel's manufacturing contribution to one of the most closely watched semiconductor projects in the market, diluting a catalyst that helped drive the stock's 213% year-to-date run.

For TSMC, the discussions represent a potential expansion of its footprint in a project with demand tied to Tesla's automotive business, SpaceX's satellite operations, and the AI compute ambitions across Musk's companies. The roughly 1% gain in TSMC shares on Monday suggests investors see modest upside if talks advance.

Musk's own framing — "just discussions" — leaves the outcome open. Talks of this kind can collapse, and no capacity figures, process nodes, or investment amounts for a TSMC role have been disclosed.

What happens next?

The immediate question is whether discussions between Musk's companies and TSMC convert into a formal agreement, and what structure it takes: a TSMC-owned plant, as Culpan suggests is most likely, or a more distributed role alongside Intel's existing participation. Until a deal is announced, Intel's Terafab premium rests on the assumption that it remains the project's primary hardware partner — an assumption Musk's weekend post has now called into question.