Intel stock drops after Elon Musk hints Terafab could partner with a rival chipmaker

The move: Intel stock dropped 3% to start the week, dipping to a low of $115.31. Shares of the US chipmaker are up 213% year to date.

Why: The stock dropped as the week began following a weekend post from Elon Musk that hinted at a deepening partnership with an Intel rival.

On Saturday, Musk addressed a report from tech journalist and researcher Tim Culpan, who claimed that Taiwan Semiconductor Manufacturing Company could work with Terafab, Musk’s planned semiconductor plant being developed by Tesla, SpaceX, and Intel.

Musk responded to a post sharing Culpan’s report, stating “Just discussions, but something may come of it.”

TSMC shares were up about 1% on Monday.

What it means: There’s no deal yet between Musk’s companies and TSMC, but the market’s reaction to the possibility of a partnership has spooked investors who may have been betting on Intel being the top hardware beneficiary of the Terafab project. Data from Stocktwits shows that sentiment among retail investors shifted to bearish following Musk’s post.

Intel joined the Terafab project in April, with the stock rallying at that time, but a deal with TSMC could vault the Taiwanese chip company into a much bigger role in the project.

“The most likely scenario is for TSMC to try to own and operate the new factory,” Tim Culpan of Culpium Research wrote in the note that prompted the response from Musk.