Tesla and Samsung Ink $16.5 Billion Deal for Next-Gen AI Chips

Tesla signs $16.5B deal with Samsung to make AI chips

Tesla has signed a $16.5 billion deal to get its next-generation chips from Samsung. "Samsung's giant new Texas fab will be dedicated to making Tesla's next-generation AI6 chip," Elon Musk posted on X late Sunday evening. "The strategic importance of this is hard to overstate." Tesla's AI6 (AKA Hardware 6) chip is the company's bet on an all-in-one chip design that can scale from powering its driver assistance system known as Full Self-Driving (Supervised) to Tesla's Optimus humanoid robots, all the way to high-performance AI training in data centers. Musk noted Tesla is working with TSMC to make AI5 chips, which just finished the design. The A15, a generation that is primarily built for FSD. will initially be made in TSMC's Taiwan factory and then at its Arizona facility. Samsung already makes the A14 chip, according to Musk. The deal is a boost for Samsung, which struggled to get its chip-making project off the ground after failing to attract and retain major clients. Musk said in another post that Tesla may end up spending more than $16.5 billion on Samsung chips. "Actual output is likely to be several times higher," he said. In a later post, Musk said Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. "This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house," Musk wrote.

Samsung Secures Tesla AI Chip Deal For $16.5 Billion, Production Set For Texas

Samsung has secured a renewed partnership to make AI chips for Tesla cars in a deal that's worth $16.5 billion. The order was first spotted within a regulatory finding late on July 27, with the deal set for an unnamed consumer tech company. Elon Musk, Tesla's CEO, soon posted on X to say the deal was for his car business. Musk said, "Samsung's giant new Texas fab will be dedicated to making Tesla's next-generation AI6 chip. The strategic importance of this is hard to overstate." Samsung has been building a new plant in Texas that it had initially planned to open in 2024, but it remains unopened and that may be the case until 2026. According to a report from Nikkei Asia in early July, the company has been struggling to find enough customers to justify opening the new plant. Musk also confirmed that Tesla will be involved in "optimizing" the production process for Samsung at its Texas factory. He says he'll be walking the fabrication line himself, and confirms the location is near to his own home. Samsung is producing the current A14 chip for Tesla, while TSMC won the deal to produce the A15 chip. For the A16, Samsung will be back onboard. This new deal lasts until 2033, so it's likely designed to keep Samsung producing the A17 and beyond. Musk said on X, "The $16.5B number is just the bare minimum. Actual output is likely to be several times higher." Tesla's self-driving cars first debuted last month in Austin, Texas. The limited tests saw safety drivers included in the vehicle in case of emergencies. Over the weekend, Tesla confirmed it's also testing its self-driving vehicles in the United Kingdom with examples in London and Swindon. That second location includes a difficult roundabout, which will be one of the big challenges for self-driving cars making their way to the UK.

Samsung bags $16.5B next-gen chip build contract with Tesla

Musk: 'I will walk the line personally to accelerate the pace of progress' Samsung Electronics has scored a $16.5 billion contract to make the silicon to power Tesla's next-gen self-driving computer hardware. The firm is set to produce this from a new fab it is building in Texas, according to Tesla CEO Elon Musk. The Korean technology giant published a disclosure on its investor site today detailing a "supply agreement for semiconductor contract manufacturing" worth ₩22,764,764,160,000, or approximately $16.5 billion at current exchange rates. Samsung's disclosure names the contracting party only as a "large global company," claiming that the name and other contract terms are being withheld "in accordance with the counterparty's request to maintain business confidentiality." However, a post on the website formerly known as Twitter by Tesla chief Elon Musk appears to give away the game. "Samsung's giant new Texas fab will be dedicated to making Tesla's next-generation AI6 chip. The strategic importance of this is hard to overstate," said Musk. We asked both companies for further comment. Samsung already has a semiconductor fabrication site in Austin, Texas, and is constructing a new facility near the town of Taylor, expected to come online in 2026, although it has been subject to delays. More than a year ago, Samsung said it was trying to secure $6.4 billion in funding under the previous US administration's CHIPS Act program to help with the costs of the new fab, and it was planning leading-edge logic production lines for 4nm and 2nm chips, as well as an R&D facility, and a packaging plant for High Bandwidth Memory (HBM). Samsung already makes the key silicon for what Musk refers to as "AI4," or AI hardware v4, the tech at the heart of Tesla's vehicles. It is understood to be based on Samsung's Exynos processor design, itself based on the Arm architecture. According to Musk's posting, the next iteration of the silicon, AI5, is scheduled to be manufactured by Samsung's big rival in the semiconductor manufacturing stakes, Taiwanese firm TSMC. This will be produced initially in Taiwan, but later from one of the chip contract manufacturer's fabrication plants located in Arizona. This means that production of the AI6 silicon could be several years away, and won't necessarily help Samsung with its current woes. Earlier this month, it posted an operating profit of ₩4.6 trillion ($3.3 billion), some way below the ₩6.3 trillion financial analysts had forecast. Samsung continues to struggle with technical difficulties with its high-performance HBM3E memory, which was targeted at the lucrative AI market. Nvidia reportedly chose parts from SK hynix instead, and Samsung was so chastened by the experience that it replaced the leaders of its memory and foundry businesses. Musk followed up his initial post on Twitter X with another claiming that Samsung had agreed to allow Tesla to assist in "maximizing manufacturing efficiency." He added: "I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house."

Musk says Tesla, Samsung sign $16.5 billion chip supply deal

SEOUL, July 28 (Reuters) - Tesla (TSLA.O), opens new tab CEO Elon Musk said the U.S. automaker had signed a $16.5 billion deal to source chips from Samsung Electronics (005930.KS), opens new tab, a move expected to bolster the South Korean tech giant's loss-making contract manufacturing business. Samsung's shares jumped as much as 6.8% to their highest since September last year after news of the deal. Musk said Samsung's new chip factory in Taylor, Texas will make Tesla's next-generation AI6 chip, potentially re-energizing the project that has faced long delays amid Samsung's difficulties in retaining and attracting major clients. "Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house," Musk said in a post on X on Monday. "The $16.5B number is just the bare minimum. Actual output is likely to be several times higher," he said in another post. According to a senior analyst at NH Investment & Securities, Ryu Young-ho, Samsung's Taylor fab "so far had virtually no customers, so this order is quite meaningful". In October, Reuters reported that Samsung had postponed taking deliveries of ASML (ASML.AS), opens new tab chipmaking equipment for its Texas factory as it had not yet won any major customers for the project. It has already delayed the plant's operational start to 2026. POTENTIAL PRODUCTION TIMELINE While no timeline was provided for AI6 chip production, Musk has previously said that next-generation A15 chips will be produced at the end of 2026, suggesting A16 would follow. Lee Dong-ju, an analyst at SK Securities, expects production in 2027 or 2028, but Tesla has a history of missing its targets. Samsung currently makes Tesla's A14 chips, which power its Full Self-Driving driver assistant system, while TSMC is slated to make the AI5, initially in Taiwan and then Arizona, Musk has said. Item 1 of 2 A Tesla Cybercab is displayed at the Los Angeles Auto Show, in Los Angeles, California, U.S., November 21, 2024. REUTERS/David Swanson/File Photo [1/2]A Tesla Cybercab is displayed at the Los Angeles Auto Show, in Los Angeles, California, U.S., November 21, 2024. REUTERS/David Swanson/File Photo Purchase Licensing Rights, opens new tab Samsung, the world's top memory chip maker, also produces logic chips designed by customers through its foundry business. The Texas project is central to Samsung Chairman Jay Y. Lee's strategy to expand beyond its bread-and-butter memory chips into contract chip manufacturing. Samsung currently holds just 8% of the global foundry market, far behind industry leader TSMC (2330.TW), opens new tab, which has a 67% share, data from market researcher Trendforce show. Samsung had earlier announced the $16.5 billion chip supply deal without naming the client, saying the customer had requested confidentiality about the details of the deal, which will run through the end of 2033. Three sources briefed about the matter told Reuters that Tesla (TSLA.O), opens new tab was the customer for the deal. HELP SAMSUNG'S FOUNDRY BUSINESS The deal with Tesla comes as Samsung, which is due to report its earnings on Thursday, faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix (000660.KS), opens new tab. This lag has weighed heavily on its profits and share price. Pak Yuak, an analyst at Kiwoom Securities, said the deal would help reduce losses at Samsung's foundry business, which he estimates exceeded 5 trillion won ($3.6 billion) in the first half of the year. Analysts say Samsung has struggled to retain key clients, with many defecting to TSMC for advanced chips, underscoring technological challenges the firm faces in the race to stay relevant in the capital intensive business. TSMC counts Apple (AAPL.O), opens new tab, Nvidia (NVDA.O), opens new tab and Qualcomm (QCOM.O), opens new tab among its customers. It is not clear whether the Samsung-Tesla deal is related to ongoing trade talks between South Korea and the United States. Seoul is seeking U.S. partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or reduce potential 25% U.S. tariffs. ($1 = 1,378.7000 won) Reporting by Heekyong Yang and Hyunjoo Jin, Wen-Yee Lee, Jack Kim, Additional reporting by Jihoon Lee; Editing by Ed Davies and Himani Sarkar Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Business * ADAS, AV & Safety * Sustainable & EV Supply Chain

Musk says Tesla, Samsung Electronics sign $16.5 billion chip supply deal

SEOUL, July 28 (Reuters) - Tesla (TSLA.O), opens new tab CEO Elon Musk said the U.S. automaker had signed a $16.5 billion deal to source chips from Samsung Electronics (005930.KS), opens new tab, a move expected to bolster the South Korean tech giant's loss-making contract manufacturing business. Samsung shares rose more than 4% after the news. "Samsung's giant new Texas fab will be dedicated to making Tesla's next-generation AI6 chip. The strategic importance of this is hard to overstate," Musk said in a post on X on Monday. If Musk was referring to Samsung's upcoming Taylor, Texas, plant, the deal could revive the project that has faced delays amid Samsung's struggles to retain and win major customers. "Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house," Musk said on his social media platform. Samsung had earlier announced the $16.5 billion chip supply deal without naming the client, saying the customer had requested confidentiality about the details of the deal, which will run through the end of 2033. Three sources briefed about the matter told Reuters that Tesla (TSLA.O), opens new tab was the customer for the deal. The deal comes as Samsung faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC (2330.TW), opens new tab and SK Hynix (000660.KS), opens new tab. This lag has weighed heavily on its profits and share price. Samsung, the world's top memory chip maker, also makes logic chips designed by customers through its foundry business. Pak Yuak, an analyst at Kiwoom Securities, said the latest deal would help reduce losses at Samsung's foundry business, which he estimated exceeded 5 trillion won ($3.63 billion) in the first half of the year. Analysts say Samsung has struggled with the defection of key clients to TSMC for advanced chips. TSMC counts Apple (AAPL.O), opens new tab, Nvidia (NVDA.O), opens new tab and Qualcomm (QCOM.O), opens new tab among its customers. The Samsung-Tesla deal may also be significant for South Korea, which is seeking U.S. partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or reduce potential 25% U.S. tariffs. Samsung is grappling to boost production yields of its latest 2-nanometer technology, but the order is unlikely to involve the cutting-edge tech, said Lee Min-hee, an analyst at BNK Investment & Securities. Samsung has been losing market share to TSMC in contract manufacturing, underscoring technological challenges the firm faces in mastering advanced chip manufacturing to attract clients like Apple and Nvidia, analysts said. ($1 = 1,378.7000 won) Reporting by Heekyong Yang and Hyunjoo Jin, Wen-Yee Lee, Jack Kim, Additional reporting by Jihoon Lee; Editing by Ed Davies and Himani Sarkar Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Business * ADAS, AV & Safety * Sustainable & EV Supply Chain

Musk says Tesla, Samsung Electronics sign chip supply deal

SEOUL, July 28 (Reuters) - Tesla CEO Elon Musk said on Monday that the U.S. automaker has signed a deal to source chips from Samsung Electronics (005930.KS), opens new tab, a move expected to bolster the South Korean tech giant's loss-making contract manufacturing business. On Saturday, Samsung announced a $16.5 billion chip supply deal with a major global company, without naming the client. It said the customer had requested confidentiality about the details of the deal, which will run through the end of 2033. Three sources briefed about the matter told Reuters that Tesla (TSLA.O), opens new tab was the customer for the deal. The deal comes as Samsung faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix (000660.KS), opens new tab. This lag has weighed heavily on its profits and share price. Samsung, the world's top memory chip maker, also makes logic chips designed by customers through its foundry business. Pak Yuak, an analyst at Kiwoom Securities, said the latest deal would help reduce losses at Samsung's foundry business, which he estimated exceeded 5 trillion won ($3.63 billion) in the first half of the year. Analysts say Samsung has struggled with the defection of key clients to TSMC for advanced chips. TSMC counts Apple (AAPL.O), opens new tab, Nvidia (NVDA.O), opens new tab and Qualcomm (QCOM.O), opens new tab among its customers. The Samsung-Tesla deal is also significant for South Korea, which is seeking U.S. partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or reduce potential 25% U.S. tariffs. It is not clear how the order would affect Samsung's plan to start production at its new factory in Texas, which has been delayed as it struggles to win major customers. Samsung is grappling to boost production yields of its latest 2-nanometer technology, and the order is unlikely to involve the cutting-edge tech, Lee Min-hee, an analyst at BNK Investment & Securities, said. Samsung has been losing market share to TSMC in contract manufacturing, underscoring technological challenges the firm faces in mastering advanced chip manufacturing to attract clients like Apple and Nvidia, analysts said. ($1 = 1,378.7000 won) Reporting by Heekyong Yang and Hyunjoo Jin, Wen-Yee Lee, Jack Kim, Additional reporting by Jihoon Lee; Editing by Ed Davies and Himani Sarkar Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Business * ADAS, AV & Safety * Sustainable & EV Supply Chain

Samsung Elec signs chip supply deal with Tesla, sources say

SEOUL, July 28 (Reuters) - Samsung Electronics (005930.KS), opens new tab has signed a deal to supply chips to Tesla Inc (TSLA.O), opens new tab, two people briefed about the matter told Reuters on Monday, in a significant boost to the South Korean tech giant's loss-making contract manufacturing business. On Saturday, Samsung announced a $16.5 billion chip supply deal with a major global company, without naming the client. It said the customer had requested confidentiality about the details of the deal, which will run through the end of 2033. The deal comes as Samsung faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix (000660.KS), opens new tab. This lag has weighed heavily on its profits and share price. Samsung, the world's top memory chip maker, also makes logic chips designed by customers through its foundry business. Pak Yuak, an analyst at Kiwoom Securities, said the latest deal would help reduce losses at Samsung's foundry business, which he estimated exceeded more than 5 trillion won ($3.63 billion) in the first half of the year. Analysts say Samsung had struggled with the defection of key clients to TSMC for advanced chips. TSMC counts Apple (AAPL.O), opens new tab, Nvidia (NVDA.O), opens new tab and Qualcomm (QCOM.O), opens new tab among its customers. The deal with Tesla comes as South Korea is seeking U.S. partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or cut potential 25% U.S. tariffs. It is not clear how the order would affect Samsung's plan to start production at its new factory in Texas, which has been delayed as it had struggled to win major customers. Samsung is grappling to boost production yields of its latest 2-nanometer technology, and the order is unlikely to involve the cutting-edge tech, Lee Min-hee, an analyst at BNK Investment & Securities, said. Samsung has been losing market share to TSMC in contract manufacturing, underscoring technological challenges the firm faces in mastering advanced chip manufacturing to attract clients like Apple and Nvidia, analysts said. ($1 = 1,378.7000 won) Reporting by Heekyong Yang and Hyunjoo Jin and Jack Kim, Additional reporting by Jihoon Lee; Editing by Ed Davies and Himani Sarkar Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Business * ADAS, AV & Safety * Sustainable & EV Supply Chain

Musk's Tesla signs $16.5 billion chip supply deal with Samsung

SEOUL, July 28 (Reuters) - Tesla (TSLA.O), opens new tab CEO Elon Musk said the U.S. automaker had signed a $16.5 billion deal to source chips from Samsung Electronics (005930.KS), opens new tab, a move expected to bolster the South Korean tech giant's loss-making contract manufacturing business. Samsung shares soared nearly 7% after news of the deal on Monday which comes as the world's top memory chip maker faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC (2330.TW), opens new tab and SK Hynix (000660.KS), opens new tab. Musk said Samsung's new chip factory in Taylor, Texas will make Tesla's next-generation AI6 chip, potentially re-energizing the project that has faced long delays amid Samsung's difficulties in retaining and attracting major clients. "Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house," Musk said in a post on X on Monday. "The $16.5B number is just the bare minimum. Actual output is likely to be several times higher," he said in another post. Shares of Samsung jumped 6.8% to their highest since September last year, while Tesla shares were up 1.9% in U.S. pre-market trading. According to a senior analyst at NH Investment & Securities, Ryu Young-ho, Samsung's Taylor fab "so far had virtually no customers, so this order is quite meaningful," although the deal may represent a small portion of its logic chip revenue annually. In October, Reuters reported that Samsung had postponed taking deliveries of ASML (ASML.AS), opens new tab chipmaking equipment for its Texas factory as it had not yet won any major customers for the project. It has already delayed the plant's operational start to 2026. It is not clear whether the Samsung-Tesla deal is related to ongoing trade talks between South Korea and the United States. Seoul is seeking U.S. partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or reduce potential 25% U.S. tariffs. A South Korean trade ministry official told Reuters he had not heard that the specific deal was part of the trade negotiations. POTENTIAL PRODUCTION TIMELINE While no timeline was provided for AI6 chip production, Musk has previously said that next-generation AI5 chips will be produced at the end of 2026, suggesting AI6 would follow. Item 1 of 2 A Tesla Cybercab is displayed at the Los Angeles Auto Show, in Los Angeles, California, U.S., November 21, 2024. REUTERS/David Swanson/File Photo [1/2]A Tesla Cybercab is displayed at the Los Angeles Auto Show, in Los Angeles, California, U.S., November 21, 2024. REUTERS/David Swanson/File Photo Purchase Licensing Rights, opens new tab Lee Dong-ju, an analyst at SK Securities, expects production in 2027 or 2028, but Tesla has a history of missing its targets. Samsung currently makes Tesla's AI4 chips, which power its Full Self-Driving driver assistant system, while TSMC is slated to make the AI5, initially in Taiwan and then Arizona, Musk has said. Samsung, the world's top memory chip maker, also produces logic chips designed by customers through its foundry business. The Texas project is central to Samsung Chairman Jay Y. Lee's strategy to expand beyond its bread-and-butter memory chips into contract chip manufacturing. It holds just 8% of the global foundry market, far behind industry leader TSMC (2330.TW), opens new tab, which has a 67% share, data from market researcher Trendforce show. Samsung had earlier announced the $16.5 billion chip supply deal without naming the client, saying the customer had requested confidentiality about the details of the deal, which will run through the end of 2033. Three sources briefed about the matter told Reuters that Tesla (TSLA.O), opens new tab was the customer for the deal. HELP SAMSUNG'S FOUNDRY BUSINESS The deal with Tesla comes as Samsung, which is due to report its earnings on Thursday, faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix (000660.KS), opens new tab. This lag has weighed heavily on its profit and share price. Earlier this month, Samsung projected a 56% drop in second-quarter operating profit, partly due to widening losses of its foundry business. Pak Yuak, an analyst at Kiwoom Securities, said the deal would help reduce losses at Samsung's foundry business, which he estimates exceeded 5 trillion won ($3.6 billion) in the first half of the year. Analysts say Samsung has struggled to retain key clients, with many defecting to TSMC for advanced chips, underscoring technological challenges the firm faces in the race to stay relevant in the capital-intensive business. TSMC counts Apple (AAPL.O), opens new tab, Nvidia (NVDA.O), opens new tab and Qualcomm (QCOM.O), opens new tab among its customers. ($1 = 1,378.7000 won) Reporting by Heekyong Yang and Hyunjoo Jin, Wen-Yee Lee, Jack Kim, Additional reporting by Jihoon Lee; Editing by Ed Davies, Himani Sarkar and Emelia Sithole-Matarise Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Business * ADAS, AV & Safety * Sustainable & EV Supply Chain

Tesla-Samsung $16.5 billion supply deal may spur chipmaker's US contract business

July 28 (Reuters) - Tesla (TSLA.O), opens new tab has signed a $16.5 billion deal to source chips from Samsung Electronics (005930.KS), opens new tab, a move that could bolster the South Korean tech giant's unprofitable contract business but is unlikely to help Tesla sell more EVs or roll out robotaxis more quickly. Tesla CEO Elon Musk said late on Sunday that Samsung's new chip factory in Taylor, Texas would make Tesla's next-generation AI6 chip. This could re-energize Samsung's project, which has faced long delays because the company had trouble retaining and attracting major clients. Samsung shares on Monday closed up 6.8% on hopes that this deal would help the world's top memory chip maker in the race to produce artificial intelligence chips, where it trails rivals such as TSMC (2330.TW), opens new tab. With production still years away, the deal is unlikely to help Tesla address immediate challenges, including ongoing declines in its EV sales and efforts to scale its emerging robotaxi service. Tesla shares still rose 4.2% on Monday. Musk has said that future AI inference chips, including AI6, would be deployed in self-driving vehicles and its Optimus humanoid robots, though he has noted the substantial computing power could enable broader AI applications. Inference chips are used to run AI models and make real-time decisions. "Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house," Musk said in a post on X on Monday. "The $16.5B number is just the bare minimum. Actual output is likely to be several times higher," Musk said in another post. It was unclear whether the deal is related to ongoing trade talks between South Korea and the U.S. Seoul is seeking U.S. partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or reduce potential 25% U.S. tariffs. A South Korean trade ministry official told Reuters he had not heard that the specific deal was part of the trade negotiations. Item 1 of 2 A Tesla Cybercab is displayed at the Los Angeles Auto Show, in Los Angeles, California, U.S., November 21, 2024. REUTERS/David Swanson/File Photo [1/2]A Tesla Cybercab is displayed at the Los Angeles Auto Show, in Los Angeles, California, U.S., November 21, 2024. REUTERS/David Swanson/File Photo Purchase Licensing Rights, opens new tab According to a senior analyst at NH Investment & Securities, Ryu Young-ho, Samsung's Taylor factory "so far had virtually no customers, so this order is quite meaningful," although the deal may represent a small portion of its logic chip revenue annually. In October, Reuters reported that Samsung had postponed taking deliveries of ASML (ASML.AS), opens new tab chipmaking equipment for its Texas factory as it had not yet won any major customers for the project. It has already delayed the plant's operational start to 2026. PRODUCTION TIMELINE While no timeline was provided for AI6 chip production, Musk has previously said that next-generation AI5 chips will be produced at the end of 2026, suggesting AI6 would follow. Musk confirmed during Tesla's earnings call last week that AI5 chips would enter "buying production" by the end of next year. Lee Dong-ju, an analyst at SK Securities, expects production in 2027 or 2028, but Tesla has a history of missing its targets. Samsung currently makes Tesla's AI4 chips, which power its Full Self-Driving (FSD) driver assistant system, while TSMC is slated to make the AI5, initially in Taiwan and then Arizona, Musk has said. Samsung, the world's top memory chip maker, also produces logic chips designed by customers through its foundry business. The Texas project is central to Samsung Chairman Jay Y. Lee's strategy to expand beyond its bread-and-butter memory chips into contract chip manufacturing. It holds just 8% of the global foundry market, far behind TSMC, which has a 67% share, data from market researcher Trendforce show. Pak Yuak, an analyst at Kiwoom Securities, said the deal would help reduce losses at Samsung's foundry business, which he estimates exceeded 5 trillion won ($3.6 billion) in the first half of the year. ($1 = 1,378.7000 won) Reporting by Heekyong Yang and Hyunjoo Jin, Wen-Yee Lee, Jack Kim, Akash Sriram and Chris Kirkham; Additional reporting by Jihoon Lee; Editing by Ed Davies, Himani Sarkar, Emelia Sithole-Matarise and David Gregorio Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Business * ADAS, AV & Safety * Sustainable & EV Supply Chain

Samsung Electronics shares retreat after Tesla deal, as challenges remain

Seoul, July 29 (Reuters) - Shares in Samsung Electronics (005930.KS), opens new tab came under pressure on Tuesday, following a powerful rally the previous day after the South Korean technology company clinched a $16.5 billion deal to supply artificial intelligence chips to Tesla (TSLA.O), opens new tab. Analysts said the deal could bolster the technology company's unprofitable contract manufacturing business, but Samsung faces challenges in securing additional large customers both for logic chips and memory chips where it struggles against TSMC (2330.TW), opens new tab and SK Hynix (000660.KS), opens new tab. "This new deal breathes some much-needed life into the business and may signal the start of a turning point for Samsung, but its memory business will need to make considerable progress too," Ben Barringer, global technology analyst at Quilter Cheviot, said. Samsung Electronics, the world's top memory chip maker, has suffered delays in supplying the latest high-bandwidth memory (HBM) chips to key U.S. customer Nvidia (NVDA.O), opens new tab, a setback that has dented its profits and weighed on its stock. In its "foundry" or contract manufacturing business, where it manufactures logic chips designed by customers, Samsung remains a distant second to market leader TSMC. "Whether this will open the door for additional large customers will depend heavily on its execution," Barringer said. Shares of Samsung recovered to around flat by midday on Tuesday, versus the broader market's (.KS11), opens new tab 0.6% gain. The shares were down more than 2 percent earlier in the session. FAVORABLE TERMS Tesla CEO Elon Musk said late on Sunday that Samsung's new chip factory in Taylor, Texas, would make the auto company's next-generation AI6 chips, likely to be used in self-driving cars, humanoid robots and data centers, without elaborating on the timing of the production. The deal comes as Samsung has struggled to win major customers for its new Texas factory, partly due to low production yields of its cutting-edge chips. "There also has to be a chance that the company was able to strike the long-term deal on favourable terms, given that Samsung needed to prove its contract manufacturing capabilities," said Russ Mould, investment director at AJ Bell. The long-term supply deal for a key technology from a U.S. factory would "lessen the risk of supply-chain dislocations or tariff friction," he said. "Samsung now needs to prove it can deliver in the right volume to the right quality for what is likely to be a demanding customer." While the deal is "more about securing the longer-term future, we won't see these in cars for at least a year or two," said Matt Britzman, senior equity analyst at Hargreaves Lansdown. Reporting by Hyunjoo Jin in Seoul Zaheer Kachwala in Bengaluru, Jihoon Lee in Seoul; Editing by Ed Davies and Jacqueline Wong Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Autos & Transportation * ADAS, AV & Safety * Software-Defined Vehicle * Sustainable & EV Supply Chain

Samsung says tariff agreement reduces uncertainty, expects Tesla deal to boost orders

SEOUL, July 31 (Reuters) - Samsung Electronics (005930.KS), opens new tab said a trade deal that will see Washington charge 15% tariffs on imports from South Korea reduces uncertainty, as it forecast more major chip orders after signing a $16.5 billion deal with Elon Musk's Tesla (TSLA.O), opens new tab. "Building on this milestone, we anticipate securing additional orders from large customers," Samsung Vice President Noh Mi-jung said of its struggling contract chipmaking business during an earnings conference call. Samsung's new U.S. semiconductor factory in Texas, which is expected to make chips for Tesla (TSLA.O), opens new tab, is on track to begin production in 2026, she said. The Texas project is central to Samsung Chairman Jay Y. Lee's strategy of expanding beyond its bread-and-butter memory chip business into high-end contract chip manufacturing, which is dominated by Taiwan's TSMC (2330.TW), opens new tab. Noh's comments came after the company posted 4.7 trillion won ($3.37 billion) in operating profit for the April-June period, its weakest earnings in six quarters. That was roughly in line with an earlier estimate that had disappointed investors. The South Korean tech giant forecast a gradual second-half recovery for its overall business, without providing further details. Second-quarter operating profit at its chip division plunged 94% from a year earlier, it said, hurt by delays in supplying the latest AI chips to Nvidia (NVDA.O), opens new tab and U.S. export curbs on advanced semiconductor sales to China. Samsung's deal with Tesla this week came just days ahead of a much-anticipated tariff agreement with Washington announced by President Donald Trump on Wednesday that for now eases tensions with a top-10 U.S. trading partner and key Asian ally. FOCUS ON AI CHIPS Prolonged weakness in Samsung's performance has deepened investor concerns over the South Korean company's ability to catch up with smaller rivals like SK Hynix (000660.KS), opens new tab in developing high-bandwidth memory (HBM) chips used in AI data centres sold to customers including Nvidia. Last October, Samsung said it was making progress on a major deal to supply HBM3E chips to an unidentified customer that analysts said was Nvidia. Samsung warned on Thursday that the supply of HBM3E chips has been growing faster than demand, which would affect pricing. The tech giant said it has provided samples of its next-generation HBM4 chips to customers, with a plan to supply them next year. The customers are expected to include Nvidia, analysts said. Samsung said on Thursday it expected the industry environment would improve in the second half, driven by AI chip demand due to continued investments by major cloud service providers. Meta Platforms (META.O), opens new tab and Microsoft (MSFT.O), opens new tab on Wednesday pointed to strong AI chip demand and major investments in data centres in their earnings announcements. But Samsung said there were also some concerns about slowing global growth due to an uncertain trade environment and geopolitical risks. "We believe that the uncertainty has been reduced through the conclusion of negotiations between the United States and South Korea," Samsung Chief Financial Officer Park Soon-cheol said after Trump announced the trade deal. Park said Samsung was also closely monitoring a U.S. national security probe into imports of semiconductors and electronics such as smartphones, tablets and PCs, which he said could have a significant impact on its businesses. Samsung's second-quarter revenue rose 0.7% to 74.6 trillion won, in line with its earlier estimate of 74 trillion won. Its chip division posted a profit of 400 billion won during the quarter, down from 6.5 trillion won a year earlier, marking the first time in six quarters that the figure has dropped below the 1 trillion won mark. Samsung said in a statement that inventory value adjustments to memory chips and one-off costs from the impact of U.S. export restrictions on sales to China on its contract chipmaking business lowered the division's profit. Shares of Samsung were down 1.8% in early afternoon trade, underperforming the benchmark KOSPI (.KS11), opens new tab index, which was 0.5% lower. ($1 = 1,393.4100 won) Reporting by Heekyong Yang and Joyce Lee and Hyunjoo Jin; Editing by Anne Marie Roantree and Jamie Freed Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * China * ADAS, AV & Safety * Sustainable & EV Supply Chain

Samsung Electronics shares extend gains after Tesla deal, but challenges remain

Seoul, July 29 (Reuters) - Shares in Samsung Electronics (005930.KS), opens new tab eked out small gains on Tuesday, following a sharp rally the previous day after the South Korean technology company clinched a $16.5 billion deal to supply artificial intelligence chips to Tesla (TSLA.O), opens new tab. Analysts said the agreement could bolster the company's unprofitable contract manufacturing business, but Samsung faces challenges in securing additional large customers both for logic chips and memory chips where it struggles against TSMC (2330.TW), opens new tab and SK Hynix (000660.KS), opens new tab. "This new deal breathes some much-needed life into the business and may signal the start of a turning point for Samsung, but its memory business will need to make considerable progress too," Ben Barringer, global technology analyst at Quilter Cheviot, said. Samsung Electronics, the world's top memory chip maker, has suffered delays in supplying the latest high-bandwidth memory (HBM) chips to key U.S. customer Nvidia (NVDA.O), opens new tab, a setback that has dented its profits and weighed on its stock. In its "foundry" or contract manufacturing business, where it manufactures logic chips designed by customers, Samsung remains a distant second to market leader TSMC. "Whether this will open the door for additional large customers will depend heavily on its execution," Barringer said. Shares of Samsung recovered from early losses to close 0.3% higher on Tuesday, lagging the broader market's (.KS11), opens new tab 0.7% gain. The shares were down more than 2% earlier in the session after surging nearly 7% on Monday, following the Tesla deal. Meanwhile, Samsung Electronics Chairman Jay Y. Lee departed for Washington on Tuesday. A Yonhap News Agency report said he was expected to support trade talks between South Korea and the U.S. but a company spokesperson, when contacted by Reuters, described it as "business trip", with no further details. While South Korea has been promoting partnerships in chips and shipbuilding with the U.S., a trade official said the Tesla deal was unrelated to ongoing trade talks aimed at reducing U.S. tariffs. Analysts, however, said the deal could enhance prospects for Samsung's investments in its Texas-based new chip factory. FAVORABLE TERMS Tesla CEO Elon Musk said late on Sunday that Samsung's new chip factory in Taylor, Texas, would make the auto company's next-generation AI6 chips, likely to be used in self-driving cars, humanoid robots and data centers, without elaborating on the timing of the production. The deal comes as Samsung has struggled to win major customers for its new Texas factory, partly due to low production yields of its cutting-edge chips. "There also has to be a chance that the company was able to strike the long-term deal on favourable terms, given that Samsung needed to prove its contract manufacturing capabilities," said Russ Mould, investment director at AJ Bell. The long-term supply deal for a key technology from a U.S. factory would "lessen the risk of supply-chain dislocations or tariff friction," he said. "Samsung now needs to prove it can deliver in the right volume to the right quality for what is likely to be a demanding customer." While the deal is "more about securing the longer-term future, we won't see these in cars for at least a year or two," said Matt Britzman, senior equity analyst at Hargreaves Lansdown. Reporting by Hyunjoo Jin in Seoul and Zaheer Kachwala in Bengaluru, Additional reporting by Heekyong Yang and Jihoon Lee in Seoul; Editing by Ed Davies and Jacqueline Wong Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Autos & Transportation * ADAS, AV & Safety * Software-Defined Vehicle * Sustainable & EV Supply Chain

Samsung says trade deal reduces uncertainty, sees more chip orders after Tesla

SEOUL, July 31 (Reuters) - Samsung Electronics (005930.KS), opens new tab said on Thursday a trade deal that will see Washington charge 15% tariffs on imports from South Korea reduces uncertainty and it forecast major chip orders after signing a $16.5 billion deal with Tesla (TSLA.O), opens new tab. "Building on this milestone, we anticipate securing additional orders from large customers," Samsung Vice President Noh Mi-jung said of its contract chipmaking business during an earnings conference call. Samsung expected its U.S. chip factory in Texas to begin production in 2026, she said. The comments came after the company posted 4.7 trillion won ($3.37 billion) in operating profit for the April-June period, its weakest earnings in six quarters. That was roughly in line with an earlier estimate that had disappointed investors. The South Korean tech giant forecast a gradual second-half recovery for its chips business. Second-quarter operating profit at the division plunged 94% from a year earlier, it said, due to chip shipment delays and U.S. export curbs on advanced semiconductor sales to China. Tesla said this week it had signed a $16.5 billion deal to source chips from Samsung's new factory in Taylor, Texas, bolstering the tech giant's struggling contract business. Samsung said on Thursday it expected the industry environment would improve in the second half, driven by artificial intelligence demand due to continued investments by major cloud service providers. Major tech companies Meta Platforms (META.O), opens new tab and Microsoft (MSFT.O), opens new tab on Wednesday pointed to strong AI chip demand and major investments in data centres in their earnings announcements. But hours after U.S. President Donald Trump announced he would place 15% tariffs on South Korean goods, Samsung added there were concerns about slowing global growth due to an uncertain trade environment and geopolitical risks. "We believe that the uncertainty has been reduced through the conclusion of negotiations between the United States and South Korea," Samsung Chief Financial Officer Park Soon-cheol said. "We are closely monitoring the follow-up discussions between the two governments regarding the detailed contents of the recently announced agreement, and we plan to formulate our response strategy accordingly," he added. Samsung's second-quarter revenue rose 0.7% to 74.6 trillion won, in line with its earlier estimate of 74 trillion won. Its chip division posted a profit of 400 billion won during the quarter, down from 6.5 trillion won a year earlier, marking the first time in six quarters that the figure has dropped below the 1 trillion won mark. Samsung said in a statement that inventory value adjustments to memory chips and one-off costs from the impact of U.S. export restrictions on sales to China on its contract chipmaking business lowered the division's profit. Prolonged weakness in its financial performance has deepened investor concerns over the South Korean tech giant's ability to catch up with smaller rivals in developing high-bandwidth memory chips sold to customers including Nvidia (NVDA.O), opens new tab and used in AI data centres. Shares of Samsung were down 1.1% in morning trade, underperforming the flat benchmark KOSPI (.KS11), opens new tab index. ($1 = 1,393.4100 won) Reporting by Heekyong Yang and Joyce Lee and Hyunjoo Jin; Editing by Jamie Freed Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * China * ADAS, AV & Safety * Sustainable & EV Supply Chain

Samsung says tariff agreement reduces uncertainty, expects boost from Tesla deal

SEOUL, July 31 (Reuters) - Samsung Electronics (005930.KS), opens new tab said a trade deal between South Korea and Washington will help to alleviate business uncertainty, as the technology giant forecast more major chip orders after signing a $16.5 billion deal with Elon Musk's Tesla (TSLA.O), opens new tab. U.S. President Donald Trump said the U.S. will charge a 15% tariff on imports from South Korea as part of the deal that eases, for now, tension with a top-10 trading partner and key Asian ally. Imports from South Korea, a powerhouse exporter of computer chips, cars and steel, had faced a 25% rate. The tariff deal comes days after Tesla said it had signed a deal to source chips from Samsung, a move that analysts said could help the tech giant's struggling contract business. "Building on this milestone, we anticipate securing additional orders from large customers," Samsung Vice President Noh Mi-jung said on an earnings call, referring to its struggling contract chipmaking business. Samsung's new U.S. semiconductor factory in Texas, which is expected to make chips for Tesla (TSLA.O), opens new tab, is on track to begin production in 2026, she said. "The key to the Tesla order is how much Samsung would be able to address production yield issues for its advanced 2 nanometer chips," said Greg Roh, head of research at Hyundai Motor Securities. The Texas project is central to Samsung Chairman Jay Y. Lee's strategy of expanding beyond its bread-and-butter memory chip business into high-end contract chip manufacturing, which is dominated by Taiwan's TSMC (2330.TW), opens new tab. Noh's comments came after the company posted 4.7 trillion won ($3.37 billion) in operating profit for the April-June period, its weakest earnings in six quarters. That was roughly in line with an earlier estimate that had disappointed investors. The South Korean tech giant forecast a gradual second-half recovery for its overall business, without providing further details. Second-quarter operating profit at its chip division plunged 94% from a year earlier, it said, hurt by delays in supplying the latest AI chips to Nvidia (NVDA.O), opens new tab and U.S. export curbs on advanced semiconductor sales to China. FOCUS ON AI CHIPS Prolonged weakness in Samsung's performance has deepened investor concerns over the South Korean company's ability to catch up with smaller rivals like SK Hynix (000660.KS), opens new tab in developing high-bandwidth memory (HBM) chips used in AI data centres and sold to customers including Nvidia. Last October, Samsung said it was making progress on a major deal to supply HBM3E chips to an unidentified customer that analysts said was Nvidia. Samsung on Tuesday did not give an update to the plan, while warning that the supply of HBM3E chips has been growing faster than demand, which would affect pricing. The tech giant said it has also provided samples of its next-generation HBM4 chips to customers, with a plan to supply them next year. Customers for this chip are also expected to include Nvidia, analysts said. Samsung said on Thursday it expected the industry environment would improve in the second half of the year, driven by AI chip demand due to continued investments by major cloud service providers. Meta Platforms (META.O), opens new tab and Microsoft (MSFT.O), opens new tab on Wednesday pointed to strong AI chip demand and major investments in data centres in their earnings announcements. Samsung said there were also some concerns about slowing global growth due to an uncertain trade environment and geopolitical risks. "We believe that the uncertainty has been reduced through the conclusion of negotiations between the United States and South Korea," Samsung Chief Financial Officer Park Soon-cheol said after Trump announced the trade deal. Park said Samsung was closely monitoring a U.S. national security probe into imports of semiconductors and electronics such as smartphones, tablets and PCs, which he said could have a significant impact on its businesses. Samsung's second-quarter revenue rose 0.7% to 74.6 trillion won, in line with its earlier estimate of 74 trillion won. Its chip division posted a profit of 400 billion won during the quarter, down from 6.5 trillion won a year earlier, marking the first time in six quarters the figure has dropped below the 1 trillion won mark. Samsung said in a statement inventory value adjustments to memory chips and one-off costs from the impact of U.S. export restrictions on sales to China on its contract chipmaking business lowered the division's profit. Samsung said smartphone demand, which had rebounded in the first half thanks to stockpiling ahead of U.S. tariffs and China subsidies, is expected to see slowing growth in the second half. For TVs, Samsung expected demand to slightly decline due to inflation and economic uncertainty in the second half from a year earlier. Shares of Samsung were down 1.8% in early afternoon trade, underperforming the benchmark KOSPI (.KS11), opens new tab index, which was 0.5% lower. ($1 = 1,393.4100 won) Reporting by Heekyong Yang and Joyce Lee and Hyunjoo Jin; Editing by Anne Marie Roantree, Jamie Freed and Tom Hogue Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * China * ADAS, AV & Safety * Sustainable & EV Supply Chain

Samsung lands $16.5 billion chip contract with Tesla

Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. What just happened? Samsung Electronics has landed a landmark $16.5 billion deal to manufacture semiconductor chips for Tesla, a move that could reshape the competitive landscape in advanced chipmaking and help revive Samsung's struggling foundry division. The multi-year contract, representing 7.6 percent of the company's projected 2024 revenue, will run through the end of 2033. The deal was first revealed in a South Korean regulatory filing on July 26, 2025. Although Samsung did not name the customer due to confidentiality agreements, Tesla CEO Elon Musk later confirmed on X that the electric vehicle maker was indeed behind the agreement. He underscored the strategic significance of the partnership, stating that Samsung's new semiconductor fabrication plant in Taylor, Texas, will be dedicated to producing Tesla's next-generation AI6 chips. These chips are expected to power Tesla's upcoming autonomous driving systems, robotics platforms, and AI training clusters. Production will ramp up once the Taylor facility becomes operational, which is projected for 2026. Samsung's foundry division, which manufactures chips for external clients, has long lagged behind industry leader TSMC. While TSMC dominates the market by serving major customers like Apple, Nvidia, and Qualcomm, Samsung has faced persistent challenges, including lower yields in advanced manufacturing and difficulty retaining clients. Experts see Tesla's decision as a major vote of confidence for Samsung, especially at a time when the company has lost high-profile contracts and posted operating losses in its foundry segment over the past year. According to Kiwoom Securities analyst Pak Yuak, Samsung's foundry business posted losses exceeding $3.6 billion in the first half of 2025, primarily due to delays in securing large customers and slow progress with its 2-nanometer technology. Industry watchers suggest the Tesla deal could mark a turning point. Some experts believe that producing chips for a global player like Tesla at its Texas facility could help Samsung improve its production yields and attract additional top-tier clients. However, questions remain about the profitability of the deal, as analysts speculate that Samsung may have offered aggressive pricing to secure Tesla's business. However, Daniel Kim of Macquarie emphasized that the deal is strategically significant, even if short-term profit margins are limited, as it allows Samsung to gain experience with advanced manufacturing and strengthen its presence in the US market.

Musk announces Tesla, Samsung Electronics chip supply deal

The big picture: Samsung had announced Saturday that it had struck a $16.5 billion supply agreement, but it didn't name the company. * The announcement comes after Samsung, one of the world's largest memory chip makers acknowledged last year that it had fallen behind in the AI chips war. Driving the news: "Samsung's giant new Texas fab will be dedicated to making Tesla's next-generation AI6 chip. The strategic importance of this is hard to overstate," Musk wrote on his platform X. * "Samsung currently makes AI4. TSMC will make AI5, which just finished design, initially in Taiwan and then Arizona," Musk added. * "Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house." * Representatives for Samsung did not immediately respond to Axios' late Sunday request for comment. Editor's note: This is a breaking news story. Please check back for updates.

Tesla signs massive deal with Samsung to provide chips

Why it matters: The deal gives the Austin-based car company a steady supply of critical technology -- and furnishes Samsung with the big dependable customer it had been seeking. * The chip manufacturer had paused construction on its massive Taylor plant -- due to open next year -- as it sought a buyer for its chips, Nikkei Asia reported in early July. * Taylor is 30 miles northeast of Austin. The big picture: Samsung announced Saturday that it had struck a $16.5 billion supply agreement, but it didn't identify the company. * The announcement comes after Samsung, one of the world's largest memory chip makers, acknowledged last year that it had fallen behind in the AI chips war. Driving the news: "Samsung's giant new Texas fab will be dedicated to making Tesla's next-generation AI6 chip," Tesla CEO Elon Musk then revealed on his platform X late Sunday. "The strategic importance of this is hard to overstate." The intrigue: "Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress," Musk wrote. * "And the fab is conveniently located not far from my house." What they're saying: Ryu Young-ho, a senior analyst at NH Investment and Securities, said that Samsung's Taylor factory "so far had virtually no customers, so this order is quite meaningful," Reuters reported. The bottom line: The deal's announcement sent shares of Samsung and its suppliers soaring Monday, with the Seoul-based company seeing a 6.8% jump.

Musk hails $16.5bn Samsung deal to supply Tesla with AI chips

Samsung has agreed a $16.5bn (£12.3bn) deal to manufacture artificial intelligence chips for Tesla, in a move hailed by Elon Musk on Monday. The South Korean tech company announced the contract with an unnamed client in a regulatory filing, with Tesla's chief executive giving further details on his social media platform, X. Musk wrote that Samsung would produce Tesla's next-generation A16 chips at a new plant in Texas. "The strategic importance of this is hard to overstate," he wrote. In December, the Biden administration announced $4.75bn in funding for Samsung's semiconductor manufacturing facilities in Texas under the Chips Act, legislation aimed at making the US more self-sufficient in chip manufacturing. At the time, the then US commerce secretary, Gina Raimondo, said the funding would ensure the country had a "steady stream" of chips essential to AI and national security. In a post of X on Monday, Musk said Samsung had agree to allow Tesla to "assist in maximising manufacturing efficiency" and that he would "walk the [manufacturing] line personally to accelerate the pace of progress". He added that the Samsung plant in Taylor, outside Austin, Texas, was "conveniently located not far from my house". The deal will help re-energise a project faced long delays amid Samsung's difficulties in retaining and attracting big clients. Ryu Young-ho, a senior analyst at Seoul-based NH Investment & Securities, said the Taylor plant "so far had virtually no customers", making the deal "quite meaningful". In October, Reuters reported that Samsung had postponed taking deliveries of chipmaking equipment from ASML, a Dutch manufacturer, for the Texas site as it had not yet won any significant customers for the project. It has already delayed the plant's operational start to 2026. Samsung makes Tesla's AI4 chips, which power the carmaker's full self-driving driver assistant system. Taiwan's TSMC is slated to make the AI5 chips for Tesla, initially in Taiwan and then Arizona, Musk has said. The regulatory filing by Samsung announcing the chip supply agreement did not name the client, saying the customer had requested confidentiality about the details of the deal, which will run through the end of 2033.

AI6 chip deal with Samsung signals Tesla's plan to scale AI across its entire product line

Samsung's Texas fab will manufacture the Tesla chips, which are described as a flexible platform Tesla has entered into a $16.5 billion agreement with Samsung to manufacture its upcoming AI6 chip, which will be used in wide range of AI-driven applications. The deal, which was disclosed in a South Korean regulatory filing and later confirmed by Elon Musk, will run from now until the end of 2033. As CNBC reports, Samsung initially declined to name the counterparty, citing a confidentiality request, but Musk later outed Tesla as the customer, stating Samsung's upcoming Texas fabrication plant would focus on building Tesla's AI6 hardware. Musk said Tesla would be involved in streamlining the manufacturing process and that he personally planned to oversee progress at the plant. The AI6 chip is is designed to power a range of systems, including humanoid robots, autonomous vehicles, and AI data centers. It follows the AI4 chip, currently in use, and AI5, which recently completed design and is planned for production by TSMC using a 3nm process. At Tesla's recent Q2 2025 earnings call, the company noted, without giving a reason, that the AI5 hardware would be delayed by a full year, with production now expected at the end of 2026. Tesla described the AI6 chip as a flexible platform that could scale down for robotic applications and up for large-scale inference workloads. The company also claimed it could improve inference performance on current hardware by nearly 10x. AS CNBC noted, this comes amid speculation that Tesla may be reaching the limits of its current AI4 architecture. Former Tesla chip architect Jim Keller, also known for his work on chips at Apple, AMD, and Intel, has previously stated that Tesla would likely need a 5 to 10x performance jump over AI4 to achieve full self-driving capabilities. Samsung's involvement in the AI6 marks a strategic win for its foundry business, which is currently behind TSMC in market share. The company is investing heavily in 2nm production to secure future AI chip orders.

Tesla signs $16.5 billion AI chip deal with Samsung

Samsung didn't build a $40 billion chip plant in Texas to let it sit empty. Now, Elon Musk is giving it something to do. Tesla just signed a $16.5 billion, multiyear deal with Samsung to manufacture the company's coming AI6 chips, the latest iteration of the custom silicon that powers Tesla's vehicles, robots, and AI infrastructure. The contract runs through 2033 and makes Samsung the primary foundry partner for the AI6, with production based at the electronics company's facility in Taylor, Texas. Stocks moved fast on the news: Samsung shares surged roughly 7%, hitting their highest level since September, while Tesla rose around 1-2% in early trading amid signs that Musk's in-house AI empire is getting the infrastructure it needs to move beyond cars. But the EV-maker's shares still remain down over 15% for the year after a volatile first half (including a rough second-quarter earnings report). Musk announced the deal on X over the weekend, framing it as the floor, not the ceiling. "The $16.5B number is just the bare number," he wrote, adding that actual output "is likely to be several times higher." He also said he "will walk the line personally to accelerate the pace of progress," half-jokingly talking about the fab's proximity to his Austin home. That kind of visibility -- both literal and strategic -- could give Tesla leverage it didn't have with overseas chip fabs. "The strategic importance of this is hard to overstate," Musk wrote. And as his company continues to struggle, he needs that to be the case. The relationship between these two companies isn't new. Tesla already uses Samsung's silicon in its current-generation Hardware 4 systems, which power the current version of the EV-maker's Full Self-Driving (FSD) capabilities. But Tesla shifted production of the AI5 to TSMC (to be produced first in Taiwan but soon in Arizona). This new deal pulls Samsung back into the center of Tesla's AI roadmap, giving it the nod for AI6 -- a chip expected to roll out around 2027 or 2028. What's powering Tesla's demand isn't just vehicles. The company's chips run across a growing stack of products: FSD systems, the coming (but delayed) Optimus humanoid robot, and the company's AI training clusters. The move also positions the company to reduce its reliance on third-party hardware from Nvidia and AMD as Tesla continues to build a vertically integrated AI stack. That means more custom chips, more foundry space, and more supplier leverage. Samsung is now a direct beneficiary. Tesla's broader context sharpens the stakes. The company is fresh off its Q2 earnings, where Musk warned of choppy quarters ahead, but investors are laser-focused on the company's AI-led ambitions -- robotaxis, robots, and Dojo-powered training centers all point toward a bigger AI stack that runs on custom chips. The move also fits Musk's -- and President Donald Trump's -- broader "onshoring" streak. Musk, from Gigafactories to supercomputers, has increasingly shifted production onto U.S. soil. With Samsung's fab just a short drive from Tesla's Gigafactory Texas, the logistics -- and the optics -- work in his favor. For Samsung, the agreement is both a breakthrough and a test. Its U.S. foundry business has struggled to attract major customers despite massive capital outlays and a flood of incentives from the Biden administration's CHIPS Act. Delays, yield issues, and fierce competition from TSMC have limited Samsung's market share to just 8% of global foundry revenue. Tesla, meanwhile, is exactly the kind of customer Samsung needed: deep pockets, long timelines, and an appetite for bleeding-edge AI chips. Still, the deal could squeeze Samsung's margins, especially if Tesla demanded (as some analysts seem to think) favorable pricing to offset the foundry's relative inexperience. And while A16 production is expected to soon ramp up, Samsung's ability to hit the timeline and deliver chips at Tesla's scale could still be a challenge. But if Samsung can deliver, the company could draw more high-end clients to its U.S. operations. And if Tesla's AI6 rollout goes according to plan, the deal could mark a turning point in how the automaker controls its AI future -- from chip to bot to car.

Elon Musk confirms Tesla has signed a $16.5 billion chip contract with Samsung Electronics

Samsung Electronics has entered into a $16.5 billion contract for supplying semiconductors to Tesla, based on a regulatory filing by the South Korean firm and Tesla CEO Elon Musk's posts on X. The memory chipmaker, which had not named the counterparty, mentioned in its filing that the effective start date of the contract was July 26, 2025 -- receipt of orders -- and its end date was Dec. 31, 2033. However, Musk later confirmed in a reply to a post on social media platform X that Tesla was the counterparty. He also posted: "Samsung's giant new Texas fab will be dedicated to making Tesla's next-generation AI6 chip. The strategic importance of this is hard to overstate. Samsung currently makes AI4.TSMC will make AI5, which just finished design, initially in Taiwan and then Arizona." "Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress," Musk said on X, and suggested that the deal with Samsung could likely be even larger than the announced $16.5 billion. Samsung earlier said that details of the deal, including the name of the counterparty, will not be disclosed until the end of 2033, citing a request from the second party "to protect trade secrets," according to a Google translation of the filing in Korean on Monday. "Since the main contents of the contract have not been disclosed due to the need to maintain business confidentiality, investors are advised to invest carefully considering the possibility of changes or termination of the contract," the company said. The company's shares rose over 6% in trading on Monday to reach their highest level since September 2024. Tesla was a probable customer, Ray Wang, research director of semiconductors, supply chain and emerging technology at The Futurum Group, told CNBC before Musk's post. Bloomberg News had earlier reported that Samsung's deal was with Tesla, citing a source. Samsung's foundry service manufactures chips based on designs provided by other companies. It is the second largest provider of foundry services globally, behind Taiwan Semiconductor Manufacturing Company. The company stated in April that it aimed to commence 2 nanometer mass production in its foundry business and secure major orders for the next-generation technology. In semiconductor technology, smaller nanometer sizes signify more compact transistor designs, which lead to greater processing power and efficiency. Local South Korean media outlets have also reported that American chip firm Qualcomm could place an order for chips manufactured using Samsung's 2 nanometer technology. Samsung, which is set to deliver earnings on Thursday, expects its second-quarter profit to more than halve. An analyst previously told CNBC that the disappointing forecast was due to weak orders for its foundry business and as the company has struggled to capture AI demand for its memory business. The company has fallen behind competitors SK Hynix and Micron in high-bandwidth memory chips -- an advanced type of memory used in AI chipsets. SK Hynix, the leader in HBM, has become the main supplier of these chips to American AI behemoth Nvidia. While Samsung has reportedly been working to get the latest version of its HBM chips certified by Nvidia, a report from a local outlet suggests these plans have been pushed back to at least September.

Elon Musk's Tesla signs €14 billion chip deal with Samsung Electronics

Elon Musk confirmed in a post on X that the South Korean giant's US-based foundry will produce chips used in Tesla's self-driving cars, a record-breaking deal for both Samsung and American chipmaking. A Samsung manufacturing facility in Texas will produce the newest generation of an advanced microchip for its yet-to-be rolled-out cars, Tesla CEO Elon Musk announced in a post on X. "Samsung's giant new Texas fab will be dedicated to making Tesla's next-generation AI6 chip. The strategic importance of this is hard to overstate," Musk said. The deal is a major win for the South Korean tech giant, which lost major clients like Google in recent years to competitors such as the Taiwan Semiconductor Manufacturing Company (TSMC) due to workflow issues and low production yields. "Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency," Musk continued in the post. "This is a critical point, as I will walk the line personally to accelerate the pace of progress." While Samsung already produces the AI4 and has been working with Tesla since 2017, it lost the AI5 deal to TSMC, who initially produced it in Taiwan and will soon be moving production to a plant in Arizona. According to another post on X, the deal amounts to $16.5 billion (€14 billion), which Musk claims is "just the bare minimum. Actual output is likely to be several times higher". Besides Tesla vehicles, the upcoming AI6 chip is expected to power the technological advancement of Tesla's humanoid robots and will be involved in AI model training. What's so "fab" about the new fab? A fab is a tech industry term for a semiconductor fabrication plant or a cutting-edge factory where companies like Tesla get their custom computer chips built after they are designed. There are only a few tech giants in the world that have the excruciatingly precise machinery to build 2-nanometer (nm) chips, which fit 50 billion transistors on a chip barely the size of a human fingernail. The obsession with miniaturization in the tech world is part of a drive to achieve better computational power and combine it with greater energy efficiency. The South Korean multinational conglomerate has been operating a semiconductor plant in Austin, Texas, since 1996. However, the new AI6 Tesla chip will be produced in a new plant in Taylor, around 50 kilometres away from the original fab. "The fab is conveniently located not far from my house," Musk said in the post. Musk has lived near the launch site of his space exploration company, SpaceX, in Texas since 2021. The Samsung deal is in line with the Chips and Science Act, a US bill passed in 2022, which aims to bring more of the highly profitable semiconductor manufacturing industry to the US, instead of relying on overseas producers.

Tesla signs $16.5 billion deal with Samsung to make AI chips

Tesla CEO Elon Musk said late on Sunday that Samsung's new chip factory in Taylor, Texas would make Tesla's next-generation AI6 chip. This could re-energize Samsung's project, which has faced long delays because the company had trouble retaining and attracting major clients. Samsung shares on Monday closed up 6.8% on hopes that this deal would help the world's top memory chip maker in the race to produce artificial intelligence chips, where it trails rivals such as TSMC. With production still years away, the deal is unlikely to help Tesla address immediate challenges, including ongoing declines in its EV sales and efforts to scale its emerging robotaxi service. Tesla shares still rose 4.2% on Monday.

Samsung to Make Tesla's AI6 Chips at Upcoming Texas Facility | AIM

Samsung Electronics has secured a ₩22.76 trillion (~$16.5 billion) contract to manufacture advanced 2-nanometer semiconductors, according to a regulatory filing by the South Korean tech firm. While Samsung has not officially named Tesla in its filing, it has revealed that the deal is with a "large global company". To follow up, Elon Musk confirmed on X that Samsung's upcoming foundry in Taylor, Texas, will be "dedicated to making Tesla's next-generation AI6 chip", following Samsung's current production of AI4 chips and TSMC's upcoming AI5 chip. "Samsung agreed to allow Tesla to assist in maximising manufacturing efficiency," Musk wrote in another post, stating that he will "walk the line personally to accelerate the pace of progress". The order is the largest ever for Samsung Foundry and reportedly accounts for 7.6% of the company's total revenue in 2024. The company anticipates completing the contract by the end of 2033. Although the Texas foundry is still under construction, the order signals a long-term bet on US-based chip manufacturing. The move is also seen as part of Tesla's vertical integration strategy to secure an in-house AI chip supply for its autonomous driving. Shares of Samsung Electronics have risen to ₩70,000 following the announcement. The deal will provide a significant boost to Samsung's foundry business, which has struggled to compete with TSMC in the advanced node segment.

Tesla and Samsung team up on AI chips

This partnership is a huge vote of confidence in Samsung's advanced chip-making capabilities as it seeks to challenge the dominance of rival TSMC. Elon Musk announced Sunday that Tesla has secured a semiconductor chip supply deal with Samsung Electronics for its AI chips, following Samsung's earlier disclosure of a $16.5 billion supply agreement. Musk stated on X that Samsung's new Texas fabrication plant will produce Tesla's AI6 chip. He noted that Samsung currently manufactures the AI4 chip, while TSMC will produce AI5 chips, initially in Taiwan and later in Arizona, after design completion. Musk also indicated that Samsung will permit Tesla to assist in maximizing manufacturing efficiency at the facility. The announcement follows Samsung's previous acknowledgment of falling behind in the AI chip sector.

Elon Musk says Samsung's new Texas fab will be dedicated to making Tesla's next-gen AI6 chips

TL;DR: Samsung secured a $16.5 billion foundry contract to manufacture Tesla's next-generation AI6 chips at its new Texas facility, highlighting a strategic partnership. Elon Musk emphasized his personal involvement to accelerate production, marking a significant win for Samsung over competitors like TSMC and Intel in advanced AI chip manufacturing. Samsung has secured a huge $16.5 billion foundry contract to make Tesla's next-gen AI6 chip at its new Texas fab, with Elon Musk saying that the strategic importance of this is "hard to overstate". In a new post on X by the SpaceX and Tesla boss, Elon Musk said: "Samsung's giant new Texas fab will be dedicated to making Tesla's next-generation AI6 chip. The strategic importance of this is hard to overstate. Samsung currently makes AI4. TSMC will make AI5, which just finished design, initially in Taiwan and then Arizona". Samsung Foundry will be making next-gen AI6 chips for Tesla at its Texas semiconductor facility, with Musk adding that Samsung "agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house". In a world where US chipmaking giant Intel can't secure a contract, so much so that Intel Foundry could shut its doors for good if it can't land a big tech company to use its new in-house Intel 14A node, here's another struggling company -- Samsung -- securing deals with one of the biggest tech and AI companies on the planet to make next-generation AI chips. An interesting thing to note here is that Elon will be personally involved with the acceleration of the process, and it's a huge win away from TSMC, too.

Elon Musk says new Samsung plant will make Tesla AI chips

Tesla CEO Elon Musk said a new Samsung plant in Texas will be devoted to making the next generation of semiconductors for the electric vehicle (EV) company as it pushes the needle on artificial intelligence (AI). In a Sunday post on X, the social media platform he purchased in 2022, Musk said Samsung's new factory will be "dedicated" to making Tesla's AI6 chip. Musk said he will also be a presence at the factory to "assist" Samsung "in maximizing manufacturing efficiency." "This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house," Musk wrote. The Hill has reached out to Samsung for comment. The value of the contract is $16.5 billion, according to CNBC. Tesla's deal with Samsung could be a major lift for the embattled EV company as it attempts to overcome a serious dip in sales, spurred largely by Musk's brief alliance with President Trump. Tesla's global sales sunk throughout 2025 as Musk led Trump's Department of Government Efficiency (DOGE) cost-cutting panel. He also spurred backlash to Tesla in Europe by aligning himself with far-right political figures and attacking Ukrainian President Volodymyr Zelensky. Musk left the White House in May after a nasty blow-up with Trump over the president's sweeping tax-cut bill, which coincided with the end of the billionaire's appointment as a special government employee. But Tesla has still faced serious financial blowback, and Musk said he expects the company to suffer from several more "rough" quarters ahead. Even so, Tesla remains a favorite tech stock among Wall Street analysts, given the company's stranglehold over the U.S. EV market and Musk's heavy investments in AI. Advanced AI chips are a crucial part of Musk's plans to create fully autonomous vehicles, as well as his growing focus on generative AI through Grok, his chatbot.

Elon Musk says Tesla, Samsung Electronics sign chip supply deal - The Economic Times

Tesla has signed a major chip supply deal with Samsung Electronics, reportedly worth $16.5 billion through 2033. The move aims to support Samsung's struggling contract chip-making business as it faces tough competition from TSMC. Analysts say the deal could reduce losses and strengthen South Korea-U.S. tech ties amid trade talks.Tesla CEO Elon Musk said on Monday that the US automaker has signed a deal to source chips from Samsung Electronics, a move expected to bolster the South Korean tech giant's loss-making contract manufacturing business. On Saturday, Samsung announced a $16.5 billion chip supply deal with a major global company, without naming the client. It said the customer had requested confidentiality about the details of the deal, which will run through the end of 2033. Three sources briefed about the matter told Reuters that Tesla was the customer for the deal. The deal comes as Samsung faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix. This lag has weighed heavily on its profits and share price. Samsung, the world's top memory chip maker, also makes logic chips designed by customers through its foundry business. Pak Yuak, an analyst at Kiwoom Securities, said the latest deal would help reduce losses at Samsung's foundry business, which he estimated exceeded ₩5 trillion ($3.63 billion) in the first half of the year. Analysts say Samsung has struggled with the defection of key clients to TSMC for advanced chips. TSMC counts Apple, Nvidia and Qualcomm among its customers. The Samsung-Tesla deal is also significant for South Korea, which is seeking U.S. partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or reduce potential 25% U.S. tariffs. It is not clear how the order would affect Samsung's plan to start production at its new factory in Texas, which has been delayed as it struggles to win major customers. Samsung is grappling to boost production yields of its latest 2-nanometer technology, and the order is unlikely to involve the cutting-edge tech, Lee Min-hee, an analyst at BNK Investment & Securities, said. Samsung has been losing market share to TSMC in contract manufacturing, underscoring technological challenges the firm faces in mastering advanced chip manufacturing to attract clients like Apple and Nvidia, analysts said. ($1 = ₩1,378.7000)

Samsung says tariff agreement reduces uncertainty, expects Tesla deal to boost orders

Samsung Electronics anticipates increased chip orders following a $16.5 billion deal with Tesla, despite reporting a significant drop in second-quarter operating profit due to AI chip delays and export restrictions. A new U.S. semiconductor factory in Texas is slated to begin production in 2026. The company sees reduced uncertainty from a U.S.-South Korea trade agreement, while closely monitoring a U.S. Samsung Electronics said a trade deal that will see Washington charge 15% tariffs on imports from South Korea reduces uncertainty, as it forecast more major chip orders after signing a $16.5 billion deal with Elon Musk's Tesla. "Building on this milestone, we anticipate securing additional orders from large customers," Samsung Vice President Noh Mi-jung said of its struggling contract chipmaking business during an earnings conference call. Samsung's new U.S. semiconductor factory in Texas, which is expected to make chips for Tesla, is on track to begin production in 2026, she said. The Texas project is central to Samsung Chairman Jay Y. Lee's strategy of expanding beyond its bread-and-butter memory chip business into high-end contract chip manufacturing, which is dominated by Taiwan's TSMC. Noh's comments came after the company posted 4.7 trillion won ($3.37 billion) in optrumperating profit for the April-June period, its weakest earnings in six quarters. That was roughly in line with an earlier estimate that had disappointed investors. The South Korean tech giant forecast a gradual second-half recovery for its overall business, without providing further details. Second-quarter operating profit at its chip division plunged 94% from a year earlier, it said, hurt by delays in supplying the latest AI chips to Nvidia and U.S. export curbs on advanced semiconductor sales to China. Samsung's deal with Tesla this week came just days ahead of a much-anticipated tariff agreement with Washington announced by President Donald Trump on Wednesday that for now eases tensions with a top-10 U.S. trading partner and key Asian ally. Focus on AI chips Prolonged weakness in Samsung's performance has deepened investor concerns over the South Korean company's ability to catch up with smaller rivals like SK Hynix in developing high-bandwidth memory (HBM) chips used in AI data centres sold to customers including Nvidia. Last October, Samsung said it was making progress on a major deal to supply HBM3E chips to an unidentified customer that analysts said was Nvidia. Samsung warned on Thursday that the supply of HBM3E chips has been growing faster than demand, which would affect pricing. The tech giant said it has provided samples of its next-generation HBM4 chips to customers, with a plan to supply them next year. The customers are expected to include Nvidia, analysts said. Samsung said on Thursday it expected the industry environment would improve in the second half, driven by AI chip demand due to continued investments by major cloud service providers. Meta Platforms and Microsoft on Wednesday pointed to strong AI chip demand and major investments in data centres in their earnings announcements. But Samsung said there were also some concerns about slowing global growth due to an uncertain trade environment and geopolitical risks. "We believe that the uncertainty has been reduced through the conclusion of negotiations between the United States and South Korea," Samsung Chief Financial Officer Park Soon-cheol said after Trump announced the trade deal. Park said Samsung was also closely monitoring a U.S. national security probe into imports of semiconductors and electronics such as smartphones, tablets and PCs, which he said could have a significant impact on its businesses. Samsung's second-quarter revenue rose 0.7% to 74.6 trillion won, in line with its earlier estimate of 74 trillion won. Its chip division posted a profit of 400 billion won during the quarter, down from 6.5 trillion won a year earlier, marking the first time in six quarters that the figure has dropped below the 1 trillion won mark. Samsung said in a statement that inventory value adjustments to memory chips and one-off costs from the impact of U.S. export restrictions on sales to China on its contract chipmaking business lowered the division's profit. Shares of Samsung were down 1.8% in early afternoon trade, underperforming the benchmark KOSPI index, which was 0.5% lower. ($1 = 1,393.4100 won)

Tesla's Samsung Chip Deal Is "Likely" Worth More Than $16.5 Billion, Says Musk As He Confirms The Affair

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. Tesla CEO Elon Musk has confirmed that his firm will use Korean technology giant Samsung's chip manufacturing plant in Taylor, Texas, to produce its next-generation AI chips. Called the AI6, these chips will be manufactured with Tesla's assistance, with Musk adding that he will personally take part in the process to ensure smooth production. Taiwan's TSMC, the world's largest contract chip manufacturer, will make the AI5 chips, initially in Taiwan and then in its Arizona plant, according to Musk. Tesla's deal with Samsung for its AI chips marks a rare win for the South Korean firm, whose foundry division has continued to lag behind TSMC's over the past couple of years. The deal is worth $16.5 billion, according to Bloomberg, and Samsung's shares gained by 2.5% in Korea after the news broke. Musk confirmed the development on X and added that the deal likely worth "much more than" $16.5 billion. According to him Samsung will manufacture Tesla's next-generation AI chips while TSMC will continue with the current generation hardware. The chips currently used in Tesla's cars are the AI3 chips, and the firm believes that the AI5 chips will be its most advanced processors that might also be subject to US export controls. Musk shared a few details about them during Tesla's latest earnings call, where he commented that the chip should "hopefully be in volume production around the end of next year." Hardware upgrades have been a contentious issue on Teslas as cars launched with older chips have struggled to keep up with the latest full self-driving (FSD) assisted driving platform's upgrades. The A15 chips are believed to be essential for autonomous driving, and according to Musk, these chips will be manufactured by Taiwan's TSMC. Confirming Bloomberg's report, Tesla's CEO shared that TSMC will initially make the A15 chips in Taiwan and then in Arizona. These chips "just finished design," according to Musk, with Samsung being responsible for manufacturing the AI4 processors. TSMC's Arizona site is the firm's most advanced manufacturing facility and is currently producing chips on the N4 process technology family. The AI5 chip is believed to be made on the 3-nanometer process technology family, with unconfirmed reports suggesting that the inference computer could perform as many as 2,500 trillion operations per second. Musk added that Samsung will make Tesla's next-generation A16 chips. "The strategic importance of this is hard to overstate," he said, outlining that "Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency." Allowing Tesla to assist it with chip production was an important factor in the deal, according to Musk, since not only will he "walk the line personally to accelerate the pace of progress," but "the fab is conveniently located not far from" his house in Texas. Musk has established Texas as his operational base due to its proximity to SpaceX's Boca Chica site, where his rocket company is developing the world's largest rocket, Starship, for interplanetary spaceflight missions.

Tesla Stock Is Climbing Higher Monday: What's Going On? - Tesla (NASDAQ:TSLA)

Tesla, Inc. TSLA shares are trading higher Monday after the company announced a $16.5 billion artificial intelligence (AI) chips deal with Samsung. What To Know: According to the Financial Times, Samsung Electronics secured an eight-year, $16.5 billion contract to produce Tesla's next-generation AI6 chip, marking the largest chip order Samsung has ever received from a single customer. The chips will be manufactured at Samsung's new Texas fabrication plant, part of a broader $40 billion investment supported by subsidies under the U.S. Chips and Science Act. The custom chip is designed to support Tesla's autonomous driving systems and humanoid robot technology. Tesla CEO Elon Musk said the AI6 chip could also be used in Tesla's data centers to train video-based AI models, reducing reliance on general-purpose GPUs from Nvidia and AMD. Musk confirmed the deal on X, stating Samsung had "agreed to allow Tesla to assist in maximizing manufacturing efficiency" and added that he would "walk the line personally to accelerate the pace of progress." He called the deal strategically vital, noting the fabrication plant is located "not far from my house." Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started Musk said the $16.5 billion figure is "just the bare minimum," adding that "actual output is likely to be several times higher." See Also: What Is Going On With AMD Stock On Monday? TSLA Price Action: At the time of writing, Tesla stock is trading 3.88% higher at $328.35, according to data from Benzinga Pro. Image via Shutterstock TSLATesla Inc$328.553.95%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum66.66Growth63.62Quality71.58Value10.15Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Taiwan Semiconductor Stock Slips As Samsung Scores $16.5 Billion Tesla Chip Deal - Taiwan Semiconductor (NYSE:TSM)

Taiwan Semiconductor Manufacturing Co TSM stock is trading lower on Monday after Tesla Inc TSLA CEO Elon Musk confirmed signing a $16.5 billion chip manufacturing deal with the Taiwanese contract chipmaker rival Samsung Electronics Co SSNLF. Musk tweeted that Samsung will build the EV giant's next-generation AI6 chip at its massive new Texas fab, underscoring the project's critical strategic value. Samsung already manufactures the current AI4 chip, Musk tweeted. He also tweeted that Taiwan Semiconductor will produce the AI5 chip -- now finalized -- intially in Taiwan before shifting to Arizona. Also Read: How Taiwan Is Betting Big On AI To Power Its Economy Taiwan Semiconductor stock surged 23% year-to-date, gaining over 48% in the last three months as the industry grappled with changing regulatory dynamics. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started The White House launched "Winning the AI Race: America's AI Action Plan" on Wednesday, fulfilling President Donald Trump's January executive order to boost U.S. leadership in artificial intelligence. The plan outlines over 90 federal actions focused on accelerating innovation, expanding AI infrastructure and strengthening global AI leadership. The administration will also streamline regulations, modernize permitting for data centers and chip plants and invest in workforce training for AI-driven industries. The semiconductor sector rebounded, recovering losses from Tuesday's drop tied to delays in the $500 billion. Stargate project. The semiconductor industry took a hit after reports revealed major setbacks in the $500 billion Stargate AI project. Disputes between OpenAI's Sam Altman and SoftBank's Masayoshi Son stalled progress, triggering doubts and dragging chipmaker shares lower. TSM Price Action: Taiwan Semiconductor stock is down 1.44% at $242.07 at publication on Monday. Read Next: Google Cloud, YouTube, And Search Drive Big Upside: Goldman Sachs Photo: Shutterstock TSMTaiwan Semiconductor Manufacturing Co Ltd$242.00-1.47%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum85.25Growth28.42QualityN/AValue48.96Price TrendShortMediumLongOverviewSSNLFSamsung Electronics Co LtdNot Available-%TSLATesla Inc$327.553.64%Market News and Data brought to you by Benzinga APIs

Samsung Electronics Shares Fall 2.54% Following Tesla's $16.5 Billion AI Chip Manufacturing Agreement - Samsung Electronics Co (OTC:SSNLF), Tesla (NASDAQ:TSLA)

Samsung Electronics Co. Ltd. SSNLF shares declined 2.54% on Tuesday morning on the South Korean exchange following Tesla Inc.'s TSLA confirmation of a $16.5 billion chip manufacturing partnership. Shares dropped from 70,800 won to 69,000 won before recovering to 70,400 won ($50.62). Tesla CEO Elon Musk confirmed on Monday that his company will manufacture next-generation AI6 chips at Samsung's Texas facility through December 2033. Tech analyst Ming-Chi Kuo called the deal a "valuable opportunity" for Tesla to gain foundry experience, Taiwan Semiconductor Manufacturing Co. Ltd. TSM "would never allow." Samsung holds 8% of the global foundry market versus TSMC's 67%. Read Next: Mark Cuban Says It's Not The Students At Fault But The School If Answers Can Be Generated With AI: Kids Take 'Path Of Least Resistance' Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo by Sybillla via Shutterstock SSNLFSamsung Electronics Co Ltd$42.48-%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentumN/AGrowthN/AQualityN/AValueN/APrice TrendShortMediumLongOverviewTSLATesla Inc$326.193.21%TSMTaiwan Semiconductor Manufacturing Co Ltd$242.70-1.18%Market News and Data brought to you by Benzinga APIs

Tesla's Samsung Deal A 'Valuable Opportunity' To Gain Real-World Experience That TSMC Wouldn't Have Allowed -- Experts React To $16.5 Billion Agreement - Samsung Electronics Co (OTC:SSNLF), Intel (NASDAQ:INTC)

Elon Musk-led Tesla Inc.'s TSLA multibillion-dollar chip partnership with Samsung Electronics Co. SSNLF has sparked strong commentary from some of tech's most vocal investors and analysts -- and they see big implications for AI, autonomy and the future of manufacturing. What Happened: On Monday, Tesla confirmed a $16.5 billion multiyear deal with Samsung Electronics to manufacture its next-generation AI6 chip in Texas. Musk said the chips will be built at Samsung's new U.S. facility, calling the strategic importance of the partnership "hard to overstate." Following the announcement, billionaire investor Chamath Palihapitiya took to X, formerly Twitter, saying, "Tesla is a physical AI company + software AI company... the only company, today, that is tying both branches of AI together at scale." See Also: Trump's New EU Trade Deal Labeled 'Bad News' By Economists As Dow Futures Spike Over 150 Points Tech analyst Ming-Chi Kuo called the deal a "valuable opportunity" for Tesla to gain real-world foundry experience -- something Taiwan Semiconductor Manufacturing Co TSM would have never allowed. "It enables Tesla to enhance its chip design capabilities ... which will give them more leverage in future negotiations," he stated. Kuo also added that while Samsung's 2nm yield (40-45%) trails TSMC and Intel Corporation INTC, the partnership's upside outweighs the risk. "If production falls short of expectations, the worst-case scenario for Tesla would be to shift the order back to TSMC and absorb the resulting delays to AI6," he said. Gene Munster, managing partner at Deepwater Asset Management, said, AI6 will "unlock a far more advanced autonomous capability for Robotaxi, FSD, and Optimus," he wrote, adding that current chips may not meet Tesla's ultimate AI goals. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started Why It's Important: Samsung currently manufactures Tesla's AI4 chips, which are used in the company's Full Self-Driving driver assistance system. According to Musk, TSMC will handle production of the upcoming AI5 chip, starting in Taiwan and later shifting to Arizona. While best known as the world's leading memory chip producer, Samsung also operates a foundry business, fabricating custom-designed logic chips for clients. Its Texas facility plays a key role in Chairman Jay Y Lee's efforts to diversify beyond memory and grow in the contract chip manufacturing space, reported CNN. Despite these ambitions, Samsung holds only 8% of the global foundry market, compared to TSMC's dominant 67%, according to data from market research firm TrendForce. Price Action: On Monday, Tesla shares rose 3.02% in regular trading and edged up an additional 0.18% after hours, closing at $326.19, according to Benzinga Pro. Benzinga's Edge Stock Rankings show that TSLA continues to face short-term downward momentum while maintaining strong upward trends over the medium and long term. The stock also scores high on quality metrics, though its valuation remains comparatively weak. More detailed performance insights are available here. Read Next: Delta's AI Now Sets Unique Prices For Each Passenger -- Here's What We Know Photo Courtesy: Tada Images On Shutterstock.com Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. INTCIntel Corp$20.68-0.10%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum20.40Growth15.87QualityN/AValue75.81Price TrendShortMediumLongOverviewSSNLFSamsung Electronics Co Ltd$42.48-%TSLATesla Inc$326.193.21%TSMTaiwan Semiconductor Manufacturing Co Ltd$242.70-1.18%Market News and Data brought to you by Benzinga APIs

Samsung's Chip Profits Crash 94% -- AI Demand, Tesla Deal, HBM3E Ramp Offer Hope For 2H Comeback As Trump Hits South Korea With 15% Tariff - Samsung Electronics Co (OTC:SSNLF), Tesla (NASDAQ:TSLA)

Samsung Electronics Co. Ltd. SSNLF has projected a gradual second-half recovery for its semiconductor business after second-quarter operating profit at the division plunged 93.84% from a year earlier, driven by U.S. export restrictions on advanced chip sales to China and inventory adjustments. Chip Division Posts Weakest Performance in Six Quarters The South Korean tech giant's Device Solutions division posted an operating profit of 400 billion won ($287 million) during the April-June period, down from 6.5 trillion won ($4.67 billion) a year earlier. This marked the first time in six quarters that chip division profits dropped below the 1 trillion won mark. Samsung reported a total operating profit of 4.7 trillion won ($3.37 billion) for the second quarter of 2025, its weakest performance in six quarters. Revenue rose 0.7% year-over-year to 74.6 trillion won ($53.5 billion), according to the company's Thursday earnings report. AI Demand Expected to Drive Recovery Samsung expects the industry environment to improve in the second half, driven by demand for artificial intelligence from continued investments by major cloud service providers. The company cited "proactive addressing of server demand by expanding HBM3E sales" and growth in high-density DDR5 products. However, Samsung warned of concerns about slowing global growth due to an uncertain trade environment and geopolitical risks, particularly following U.S. President Donald Trump's announcement of 15% tariffs on South Korean goods. See Also: Trump Leaves 'Good Friend' India In The Cold, Strikes Trade Deal With Arch Rival Pakistan Over 'Massive Oil Reserves' Tesla Partnership Bolsters Foundry Business The earnings announcement came days after Tesla Inc. TSLA confirmed a $16.5 billion deal to source chips from Samsung through 2033. The partnership involves manufacturing Tesla's next-generation AI6 chips at Samsung's Texas facility, potentially strengthening the company's struggling foundry business. Samsung's foundry division remained weak despite significant revenue growth, with earnings impacted by inventory value adjustments stemming from U.S. export restrictions and prolonged low utilization at mature nodes. Memory Business Shows Mixed Results The Memory division saw sales increase 11% quarter-over-quarter to 21.2 trillion won ($15.2 billion), though down 3% year-over-year. Samsung expanded HBM3E sales to address server demand while significantly reducing NAND inventory through the expansion of server SSD sales. For the second half, Samsung plans to increase high-density, high-performance SSD production while accelerating the transition to 8th Generation V-NAND across all applications. The company aims to expand sales of industry-leading 128GB DDR5 and 24Gb GDDR7 for AI servers. Price Action: Samsung traded at 71,400 KRW ($51.41) on Thursday on the South Korean exchange, down 1,200 KRW ($0.86) or 1.65% as of 12:23 p.m. local time. The stock is up 18,000 KRW ($12.97) or 33.71% year to date. Read Next: Google Plans $6 Billion Data Center In India, Its Largest In Asia, With Massive Renewable Energy Investment: Report Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Sybillla via Shutterstock SSNLFSamsung Electronics Co Ltd$42.48-%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentumN/AGrowthN/AQualityN/AValueN/APrice TrendShortMediumLongOverviewTSLATesla Inc$317.89-1.03%Market News and Data brought to you by Benzinga APIs

Why Tesla Stock Jumped Today | The Motley Fool

Tesla signed a major deal with Samsung to manufacture its next-generation AI6 chips. Tesla and Samsung's $16.5 billion deal will see the South Korean electronics giant manufacture Tesla's chips, producing them in its new factory in Texas. CEO Elon Musk said on X that, along with producing the chips, "Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency," adding that, "The $16.5B number is just the bare minimum. Actual output is likely to be several times higher." While it will be years before the first AI6 chips -- designed to enable artificial intelligence (AI) inference for Tesla's vehicles and personal robots -- roll off the line, the news was enough to send Tesla shares higher. The deal will help Tesla bring its vision for the future closer to reality, but it's still a long road. In the meantime, Tesla is struggling. The company faces increased competition from Chinese EV makers like BYD as it sees its sales sharply decline around the globe. Musk's own foray into politics has done significant damage to Tesla's brand. The next year will be very telling whether Tesla can find its footing once again. I have my doubts, and I continue to think the stock is significantly overpriced.

Musk's Tesla signs $16.5 billion chip supply deal with Samsung

SEOUL -- Tesla CEO Elon Musk said the U.S. automaker had signed a US$16.5 billion deal to source chips from Samsung Electronics, a move expected to bolster the South Korean tech giant's loss-making contract manufacturing business. Samsung shares soared nearly seven per cent after news of the deal on Monday which comes as the world's top memory chip maker faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix. Musk said Samsung's new chip factory in Taylor, Texas will make Tesla's next-generation AI6 chip, potentially re-energizing the project that has faced long delays amid Samsung's difficulties in retaining and attracting major clients. "Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house," Musk said in a post on X on Monday. "The $16.5B number is just the bare minimum. Actual output is likely to be several times higher," he said in another post. Shares of Samsung jumped 6.8 per cent to their highest since September last year, while Tesla shares were up 1.9 per cent in U.S. pre-market trading. According to a senior analyst at NH Investment & Securities, Ryu Young-ho, Samsung's Taylor fab "so far had virtually no customers, so this order is quite meaningful," although the deal may represent a small portion of its logic chip revenue annually. In October, Reuters reported that Samsung had postponed taking deliveries of ASML chipmaking equipment for its Texas factory as it had not yet won any major customers for the project. It has already delayed the plant's operational start to 2026. It is not clear whether the Samsung-Tesla deal is related to ongoing trade talks between South Korea and the United States. Seoul is seeking U.S. partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or reduce potential 25 per cent U.S. tariffs. A South Korean trade ministry official told Reuters he had not heard that the specific deal was part of the trade negotiations. While no timeline was provided for AI6 chip production, Musk has previously said that next-generation AI5 chips will be produced at the end of 2026, suggesting AI6 would follow. Lee Dong-ju, an analyst at SK Securities, expects production in 2027 or 2028, but Tesla has a history of missing its targets. Samsung currently makes Tesla's AI4 chips, which power its Full Self-Driving driver assistant system, while TSMC is slated to make the AI5, initially in Taiwan and then Arizona, Musk has said. Samsung, the world's top memory chip maker, also produces logic chips designed by customers through its foundry business. The Texas project is central to Samsung Chairman Jay Y. Lee's strategy to expand beyond its bread-and-butter memory chips into contract chip manufacturing. It holds just eight per cent of the global foundry market, far behind industry leader TSMC 2330.TW, which has a 67 per cent share, data from market researcher Trendforce show. Samsung had earlier announced the $16.5 billion chip supply deal without naming the client, saying the customer had requested confidentiality about the details of the deal, which will run through the end of 2033. Three sources briefed about the matter told Reuters that Tesla was the customer for the deal. The deal with Tesla comes as Samsung, which is due to report its earnings on Thursday, faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix. This lag has weighed heavily on its profit and share price. Earlier this month, Samsung projected a 56 per cent drop in second-quarter operating profit, partly due to widening losses of its foundry business. Pak Yuak, an analyst at Kiwoom Securities, said the deal would help reduce losses at Samsung's foundry business, which he estimates exceeded 5 trillion won ($3.6 billion) in the first half of the year. Analysts say Samsung has struggled to retain key clients, with many defecting to TSMC for advanced chips, underscoring technological challenges the firm faces in the race to stay relevant in the capital-intensive business. TSMC counts Apple, Nvidia and Qualcomm among its customers.

Samsung says tariff agreement reduces uncertainty, expects boost from Tesla deal

SEOUL -- Samsung Electronics 005930.KS said a trade deal between South Korea and Washington will help to alleviate business uncertainty, as the technology giant forecast more major chip orders after signing a US$16.5 billion deal with Elon Musk's Tesla. U.S. President Donald Trump said the U.S. will charge a 15 per cent tariff on imports from South Korea as part of the deal that eases, for now, tension with a top-10 trading partner and key Asian ally. Imports from South Korea, a powerhouse exporter of computer chips, cars and steel, had faced a 25 per cent rate. The tariff deal comes days after Tesla said it had signed a deal to source chips from Samsung, a move that analysts said could help the tech giant's struggling contract business. "Building on this milestone, we anticipate securing additional orders from large customers," Samsung Vice President Noh Mi-jung said on an earnings call, referring to its struggling contract chipmaking business. Samsung's new U.S. semiconductor factory in Texas, which is expected to make chips for Tesla, is on track to begin production in 2026, she said. "The key to the Tesla order is how much Samsung would be able to address production yield issues for its advanced 2 nanometer chips," said Greg Roh, head of research at Hyundai Motor Securities. The Texas project is central to Samsung Chairman Jay Y. Lee's strategy of expanding beyond its bread-and-butter memory chip business into high-end contract chip manufacturing, which is dominated by Taiwan's TSMC 2330.TW. Noh's comments came after the company posted 4.7 trillion won ($3.37 billion) in operating profit for the April-June period, its weakest earnings in six quarters. That was roughly in line with an earlier estimate that had disappointed investors. The South Korean tech giant forecast a gradual second-half recovery for its overall business, without providing further details. Second-quarter operating profit at its chip division plunged 94 per cent from a year earlier, it said, hurt by delays in supplying the latest AI chips to Nvidia and U.S. export curbs on advanced semiconductor sales to China. Prolonged weakness in Samsung's performance has deepened investor concerns over the South Korean company's ability to catch up with smaller rivals like SK Hynix 000660.KS in developing high-bandwidth memory (HBM) chips used in AI data centers and sold to customers including Nvidia. Last October, Samsung said it was making progress on a major deal to supply HBM3E chips to an unidentified customer that analysts said was Nvidia. Samsung on Tuesday did not give an update to the plan, while warning that the supply of HBM3E chips has been growing faster than demand, which would affect pricing. The tech giant said it has also provided samples of its next-generation HBM4 chips to customers, with a plan to supply them next year. Customers for this chip are also expected to include Nvidia, analysts said. Samsung said on Thursday it expected the industry environment would improve in the second half of the year, driven by AI chip demand due to continued investments by major cloud service providers. Meta Platforms and Microsoft on Wednesday pointed to strong AI chip demand and major investments in data centers in their earnings announcements. Samsung said there were also some concerns about slowing global growth due to an uncertain trade environment and geopolitical risks. "We believe that the uncertainty has been reduced through the conclusion of negotiations between the United States and South Korea," Samsung Chief Financial Officer Park Soon-cheol said after Trump announced the trade deal. Park said Samsung was closely monitoring a U.S. national security probe into imports of semiconductors and electronics such as smartphones, tablets and PCs, which he said could have a significant impact on its businesses. Samsung's second-quarter revenue rose 0.7 per cent to 74.6 trillion won, in line with its earlier estimate of 74 trillion won. Its chip division posted a profit of 400 billion won during the quarter, down from 6.5 trillion won a year earlier, marking the first time in six quarters the figure has dropped below the 1 trillion won mark. Samsung said in a statement inventory value adjustments to memory chips and one-off costs from the impact of U.S. export restrictions on sales to China on its contract chipmaking business lowered the division's profit. Samsung said smartphone demand, which had rebounded in the first half thanks to stockpiling ahead of U.S. tariffs and China subsidies, is expected to see slowing growth in the second half. For TVs, Samsung expected demand to slightly decline due to inflation and economic uncertainty in the second half from a year earlier. Shares of Samsung were down 1.8 per cent in early afternoon trade, underperforming the benchmark KOSPI .KS11 index, which was 0.5 per cent lower.

Samsung Signs $16.5 Billion Deal to Make AI Chips for Tesla in Texas; Shares Rally -- Update

Samsung Electronics will manufacture artificial-intelligence chips for Tesla in Texas under a $16.54 billion multiyear deal, a major win for its U.S. foundry business that sent shares of South Korea's largest company sharply higher. The technology giant said in a regulatory filing Monday that the contract--equivalent to 7.6% of its overall 2024 revenue from businesses including smartphones, televisions and home appliances--will run until the end of 2033. It didn't identify the client, citing a confidentiality agreement that also kept other details under wraps. Tesla Chief Executive Elon Musk confirmed the deal with the Korean company on X, saying that Samsung's new fabrication facilities in Texas will be dedicated to making the U.S. electric-vehicle maker's next-generation AI6 chip. "The strategic importance of this is hard to overstate," he wrote in the post. Samsung currently makes the AI4 chip, and TSMC will make the AI5 chip, Musk said. The AI6 chip is intended to be used in humanoid robots, self-driving cars and AI data centers. "Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress," Musk said in a subsequent post. Shares in Samsung rose 6.8% on Monday following the news, closing at 70,400 won, equivalent to $50.88--the highest level since last September. The advance outperformed the benchmark Kospi's 0.4% gain and was the stock's sharpest daily increase in more than eight months. The contract win comes as Samsung, the world's largest memory-chip maker, struggles to catch up with Taiwan Semiconductor Manufacturing Co. in the foundry business--making chips on a contract basis for customers such as Nvidia, Qualcomm and Apple, which design chips but don't have their own factories to produce them. Despite years of investment, Samsung has only widened its gap with TSMC. Industry tracker TrendForce, a research firm, estimates that TSMC's share of global foundry revenue increased to 67.6% in the first quarter of 2025 from 67.1% in the previous quarter. Samsung's share fell to 7.7% from 8.1% over the same period. Some analysts say that relative to TSMC, Samsung's foundry business is suffering from lower yields, broadly referring to the number of chips that can be harvested from a wafer. Samsung is also seen to be struggling with slower-than-expected progress in its advanced manufacturing processes and insufficient demand from major customers. The deal with Tesla will likely enable Samsung's new fabrication plant in Taylor, Texas, which is scheduled to begin operating in 2028, to focus on producing chips largely used in AI data centers and robots, according to Samsung Securities analysts led by Lee Jong-wook. Samsung's U.S. foundry business is expected to secure a sizable and sustainable revenue contribution from the deal, the analysts said. "The existing smartphone-centered customer base can be diversified into applications such as data centers and robots," they wrote in a note.

Samsung to build Tesla's next-gen FSD chip in $16.5bn deal

As global demand for high-performance chips accelerates, especially in the fields of artificial intelligence and autonomous driving, chipmakers are battling for dominance in next-generation semiconductor manufacturing. In this race, has just secured a major win. The South Korean tech giant has signed a chip manufacturing deal with , a move that could reshape the competitive landscape and revive Samsung's foundry business after a challenging period, reports. The contract, officially active from until , was revealed in a regulatory filing on . While did not name the client, citing confidentiality, CEO confirmed the partnership. will be responsible for fabricating Tesla's AI6 chips, which are core to the electric vehicle maker's next-generation Full Self-Driving (FSD) system. Production will take place at Samsung's upcoming facility in . Musk highlighted that the plant will be fully dedicated to producing the AI6 chips, which are scheduled to debut in vehicles in 2027. This new chip is expected to surpass its predecessor, the AI5, in processing complex neural networks, real-time data fusion from sensors, and enabling autonomous driving without human intervention. While is building the AI5 chip for this year, 's AI6 production marks a potential comeback in a market it once shared more evenly. Although details about the AI6 remain confidential, industry observers believe will use its 2-nanometre process, one of the most advanced chip-making technologies to date. This would represent a leap in processing power, efficiency and competitiveness against -based , the current global leader in chip foundry services. Since 2019, has participated in the production of earlier FSD chips, but recent generations have been manufactured primarily by using 4- and 5-nanometre processes. However, with Samsung's 2-nanometre yield rates reportedly improving, appears to be returning to the Korean manufacturer for its next leap in FSD performance. Musk also stated that would actively collaborate with to improve manufacturing efficiency and scale. He emphasised that the figure is only a base level and that the actual production volume could be significantly higher. 'I will walk the line personally,' he wrote on X (formerly Twitter), pointing to the deal's strategic importance. The scale of the contract is noteworthy. It accounts for roughly 7.6% of Samsung's estimated 2024 revenue of , giving the company a multi-year revenue anchor for its foundry division, which has been under pressure. In the second quarter of 2024 alone, Samsung's foundry and System LSI divisions reportedly posted combined operating losses of around , largely due to underperformance in 3-nanometre production and an inability to attract major long-term clients. However, also stated that momentum appears to be shifting. In a report published on , analyst -ak stated that Samsung's operating losses could narrow in the coming months. This would be driven by several developments: the introduction of Samsung's Exynos 2500 chip in the Galaxy Z Flip 7, expected mass production of Apple's iPhone 18 image sensors in 2026, and new strategic partnerships, including the deal. The chips for will be produced at Samsung's foundry, which is central to the company's plan to invest over in by 2030. The plant, initially scheduled to begin operations by late 2024, has faced delays due to a lack of confirmed orders. With now secured as a client, expects the plant to begin producing chips in 2025. There is also speculation that could win additional orders beyond the AI6. Industry insiders suggest that the foundry may also fabricate the Dojo 2 chips, used for training neural networks behind Tesla's FSD system. is also reportedly in talks to manufacture advanced chips for Qualcomm and , further strengthening its position in the AI and high-performance computing segment. This deal reflects more than just a contract win; it suggests a strategic pivot. has been working to rebuild trust and relationships in . Top semiconductor executives, including -hyun, head of the Device Solutions division, have travelled repeatedly to the US to meet key clients. The company also recently appointed a former executive to lead its US foundry operations, showing a clear intent to compete aggressively in the region. Samsung's deal with is more than just a commercial success, it's a credibility statement. After falling behind in yield and client wins, is showing that it still has the technological capability and strategic clarity to compete at the highest level. This move also repositions the company in the AI and autonomous vehicle chip space, which is quickly becoming the next frontier in semiconductor innovation. The deal brings revenue stability, an opportunity to fine-tune Samsung's 2-nanometre process in high-stakes production, and most importantly, a chance to change the narrative. If can deliver on both yield and timeline, it could use this momentum to secure further deals, regain market confidence, and close the gap with .

Samsung Electronics shares retreat after Tesla deal, as challenges remain

Seoul (Reuters) -Shares in Samsung Electronics came under pressure on Tuesday, following a powerful rally the previous day after the South Korean technology company clinched a $16.5 billion deal to supply artificial intelligence chips to Tesla. Analysts said the deal could bolster the technology company's unprofitable contract manufacturing business, but Samsung faces challenges in securing additional large customers both for logic chips and memory chips where it struggles against TSMC and SK Hynix. "This new deal breathes some much-needed life into the business and may signal the start of a turning point for Samsung, but its memory business will need to make considerable progress too," Ben Barringer, global technology analyst at Quilter Cheviot, said. Samsung Electronics, the world's top memory chip maker, has suffered delays in supplying the latest high-bandwidth memory (HBM) chips to key U.S. customer Nvidia, a setback that has dented its profits and weighed on its stock. In its "foundry" or contract manufacturing business, where it manufactures logic chips designed by customers, Samsung remains a distant second to market leader TSMC. "Whether this will open the door for additional large customers will depend heavily on its execution," Barringer said. Shares of Samsung recovered to around flat by midday on Tuesday, versus the broader market's 0.6% gain. The shares were down more than 2 percent earlier in the session. FAVORABLE TERMS Tesla CEO Elon Musk said late on Sunday that Samsung's new chip factory in Taylor, Texas, would make the auto company's next-generation AI6 chips, likely to be used in self-driving cars, humanoid robots and data centers, without elaborating on the timing of the production. The deal comes as Samsung has struggled to win major customers for its new Texas factory, partly due to low production yields of its cutting-edge chips. "There also has to be a chance that the company was able to strike the long-term deal on favourable terms, given that Samsung needed to prove its contract manufacturing capabilities," said Russ Mould, investment director at AJ Bell. The long-term supply deal for a key technology from a U.S. factory would "lessen the risk of supply-chain dislocations or tariff friction," he said. "Samsung now needs to prove it can deliver in the right volume to the right quality for what is likely to be a demanding customer." While the deal is "more about securing the longer-term future, we won't see these in cars for at least a year or two," said Matt Britzman, senior equity analyst at Hargreaves Lansdown. (Reporting by Hyunjoo Jin in Seoul Zaheer Kachwala in Bengaluru, Jihoon Lee in Seoul;Editing by Ed Davies and Jacqueline Wong)

Samsung signs $16.5 bn chip deal with Tesla to revive its foundry business

Samsung has been facing tough competition in the foundry space, especially from rivals like TSMC. Samsung Electronics has secured a $16.5 billion chip supply deal with Tesla, a move that could boost its struggling contract chip manufacturing business. The South Korean tech giant announced the deal over the weekend, saying it had signed a long-term agreement with a major global company but did not reveal the client's name. However, according to Reuters, sources familiar with the matter confirmed that the deal is with Tesla. The contract will run until the end of 2033. This could be a big win for Samsung's foundry business. Despite being one of the world's leading memory chip makers, Samsung has been facing tough competition in the foundry space, especially from rivals like TSMC. The company has lost several high-profile clients to TSMC. "TSMC counts Apple, Nvidia, and Qualcomm among its customers," the report mentioned. Also read: Google makes it easier to use AI Mode on Android, here's how Pak Yuak, an analyst at Kiwoom Securities, estimated that the foundry division has lost more than 5 trillion won (about $3.63 billion) in the first half of this year. It's unclear whether the deal will involve Samsung's latest 2-nanometer chip technology. According to BNK Investment & Securities analyst Lee Min-hee, Samsung is still working on improving the production quality of these chips. The agreement comes at a crucial time as South Korea looks to strengthen ties with the US in key industries like semiconductors and shipbuilding. Also read: Apple iPhone 17 Pro and iPhone 17 Pro Max: Price in India, design, camera and all other leaks So, the Tesla deal marks a significant step for Samsung as it tries to rebuild its presence in the global chip manufacturing market and compete more strongly against its biggest rivals.