Insider Brief
- Samsung Electronics has secured a $16.4 billion semiconductor manufacturing deal with Tesla, according to Yonhap News Agency.
- The chips will be produced at Samsung’s under-construction fabrication plant in Taylor, Texas.
- The contract, confirmed by Elon Musk, covers Tesla’s next-generation AI6 chips for its Full Self-Driving system and could expand further as the companies deepen collaboration on manufacturing efficiency.
Samsung Electronics has landed a $16.4 billion deal to manufacture advanced AI semiconductors for Tesla, South Korean news agency Yonhap reports.
“Samsung’s giant new Texas fab will be dedicated to making Tesla’s next-generation AI6 chip,” Tesla CEO Elon Musk posted to X, confirming the deal that Samsung disclosed in a regulatory filing Monday without naming the client. “The strategic importance of this is hard to overstate.”
According to Yonhap, the foundry contract, disclosed in a regulatory filing Monday, represents roughly 7.6% of Samsung’s total revenue in 2024 and signals a strategic boost for the company’s lagging semiconductor fabrication business.
The chips will be manufactured at Samsung’s new semiconductor facility under construction in Taylor, Texas—a $37 billion project that has faced delays due to low customer demand. With the new contract, that facility is expected to take on a more central role in Tesla’s AI chip production roadmap. Elon Musk suggested on social media that the deal could grow beyond the $16.4 billion figure as the two companies collaborate on improving manufacturing efficiency.
Musk also revealed that Samsung is already producing Tesla’s AI4 chips, while rival TSMC will manufacture the recently finalized AI5 chips in Taiwan and ultimately Arizona. The AI6 chips are the latest in Tesla’s line of processors used to support its Full Self-Driving (FSD) system, a cornerstone of the automaker’s long-term ambitions.
Samsung’s earnings guidance for the second quarter fell short of expectations, with particular weakness in the foundry and System LSI units, Yonhap noted. Analysts had flagged the company’s struggle to attract high-volume clients as a drag on profitability. The Tesla deal may help reverse that narrative, at least in the eyes of investors. Shares of Samsung Electronics jumped 6.83% following the announcement, far outpacing the broader KOSPI index, the news agency reported.
