New Delhi, Oct. 6 -- Elon Musk has confirmed that Taiwan Semiconductor Manufacturing Co. (TSMC) could participate in Terafab, the Texas chipmaking venture being developed by Tesla and SpaceX.

The development puts one of the world's biggest semiconductor manufacturers alongside Intel, which was the earliest known chipmaker to back the project, and raises a bigger question: Is Musk building a chip factory, or an entire semiconductor ecosystem for his companies?

Intel shares fell more than 4% in premarket trading on Monday after the development emerged, while TSMC shares rose in Taiwan and in US trading. The market reaction reflects concerns that TSMC's involvement could dilute Intel's expected role in a project that could become strategic...