TLDR
- TSM stock hit an all-time high Monday, up nearly 3% after Elon Musk confirmed early talks with the company over his Terafab chip project.
- TSMC is reportedly weighing a new Texas campus with multiple fabs, potentially costing $20 billion or more each.
- Intel, already a Terafab partner, fell more than 2% on the news.
- TSMC shares are up roughly 60% year to date, driven by AI chip demand.
- The company reports earnings on October 15, with Wall Street expecting EPS of $4.45, up from $2.92 a year ago.
Taiwan Semiconductor Manufacturing Company (TSM) stock climbed to an all-time high on Monday. Shares rose as much as 2.75%, extending a rally that’s made TSMC one of the best-performing chip stocks of the year.
Taiwan Semiconductor Manufacturing Company Limited, TSM
The move came after Elon Musk confirmed early-stage talks with TSMC about a possible role in his Terafab project. Terafab is Musk’s plan for a massive chip factory in Texas meant to supply Tesla, SpaceX, and xAI.
Tech journalist Tim Culpan reported that TSMC is exploring ways to help the startup chipmaker run its new Texas factories.
Musk responded directly on X, saying “Just discussions, but something may come of it.”
Intel, which joined Terafab back in April, didn’t share in the good news. Its stock dropped more than 2% as investors weighed what a TSMC partnership might mean for Intel’s own foundry ambitions.
Bloomberg also reported Thursday that TSMC is considering a separate new manufacturing campus in Texas. That project could involve tens of billions of dollars and multiple fabrication plants, though talks remain early.
Each potential fab could cost at least $20 billion on its own. Any final decision likely hinges on whether a 35% U.S. advanced-manufacturing tax credit gets extended past the end of 2026.
Why Demand Keeps Climbing
North American customers now generate more than 75% of TSMC’s wafer revenue. Nvidia and AMD are among the biggest names placing large orders for advanced chip manufacturing.
Deputy Co-Chief Operating Officer Cliff Hou said TSMC has roughly doubled its planned equipment purchases over the past year. The company is trying to keep pace with surging AI infrastructure demand.
TSMC has already committed $265 billion to its Arizona operations. It’s also working on projects in Japan and Germany, and holding talks with Singapore.
Counterpoint Research calls TSMC the “central beneficiary” of the AI chip boom. The firm pointed to second-quarter revenue growth of 34% year over year, reaching $40.2 billion.
TSMC’s share of the Foundry 2.0 market rose to about 42%, up from 38% in 2025. Counterpoint expects full-year 2026 revenue to grow around 43%, accelerating to near 50% in the second half.
What Could Slow Things Down
S&P Global Ratings expects hyperscaler AI spending to hit $1.5 trillion by 2028. The firm sees TSMC as relatively resilient even if that spending eventually cools.
S&P credited TSMC’s technology lead and diversified customer base for helping protect pricing and margins. Profitability and cash generation should stay above 2026 levels even in a weaker spending scenario, according to the firm.
Despite all the overseas expansion, TSMC says it will keep its most advanced chipmaking technology based in Taiwan. The company declined to comment directly on the Texas campus rumors, saying only, “We have no comment on market rumors.”
TSMC reports earnings on October 15. Wall Street expects EPS of $4.45, up from $2.92 a year earlier, with revenue projected at $45.54 billion versus $33.10 billion last year.
The stock trades at a price-to-earnings ratio of about 35.3. TSM carries a Buy consensus rating with an average price forecast of $547.38, and Stifel, Bernstein, and Needham have all issued Buy or Outperform ratings in recent months.
Shares were up 1.66% at $480.62 during premarket trading Monday, marking another fresh 52-week high.
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