Tesla Diversifies AI Chip Production: Samsung Joins TSMC as Key Manufacturer

Not Just Taiwan Semiconductor: Elon Musk To Also Rely On Samsung For Tesla's AI Chips - Samsung Electronics Co (OTC:SSNLF), Tesla (NASDAQ:TSLA), Taiwan Semiconductor (NYSE:TSM)

Tesla, Inc. (NASDAQ:TSLA) chief Elon Musk announced that Samsung Electronics Co., Ltd. (OTC:SSNLF) will now co-produce the automaker's next-generation artificial intelligence chip, the AI5. The move signals a major win for Samsung as it vies for market share against the key contract chip manufacturer, Taiwan Semiconductor Manufacturing Co. (NYSE:TSM). Musk Revises Previous Manufacturing Plans During Tesla's third-quarter investor conference call on Wednesday, Musk explicitly corrected his own previous public statements, which had indicated that Taiwan Semiconductor would be the sole manufacturer for the AI5 chip, Bloomberg reported on Thursday. Also Read: Tesla's AI And Robotaxi Push Could Add $1 Trillion, Analyst Says Tesla designs these specialized AI chips to power its autonomous driving features and its developing line of robots, using them alongside processors from Nvidia Corporation (NASDAQ:NVDA). In July, Musk confirmed reports of a $16.5 billion deal for Samsung to manufacture Tesla's future AI6 chip. At that time, he noted that while Samsung was already producing the older AI4 chip, Taiwan Semiconductor would handle the AI5 -- a plan that has now evolved to include both manufacturing giants. While still a distant second to Taiwan Semiconductor, the South Korean firm is making substantial investments in a new production hub near Austin, Texas, where Tesla is also headquartered. AI Fuels Samsung's Profit Surge Samsung looks to report its largest quarterly profit in more than three years. The intense demand for AI hardware has significantly boosted sales of Samsung's specialized High-Bandwidth Memory (HBM) while also constraining the supply and driving up prices for its core business of conventional memory chips. CLSA Securities Korea and Counterpoint analysts attributed the success to several key factors. Samsung's HBM shipments surged dramatically. This, combined with strong demand from both AI and general-purpose servers, has pushed prices for standard DRAM and NAND chips. Looking ahead, Samsung is solidifying its market position for future growth. The company recently secured a critical win by getting its latest HBM chips approved for use in Nvidia's advanced AI systems. Price Action: TSLA stock was trading lower by 3.30% to $424.48 at last check Thursday. TSM was up 0.84%. Read Next: Is Amazon The Next Big AI Winner? One Analyst Thinks Wall Street Is Wrong Photo by Frederic Legrand - COMEO via Shutterstock SSNLFSamsung Electronics Co Ltd$42.480.34%OverviewTSLATesla Inc$424.06-3.40%TSMTaiwan Semiconductor Manufacturing Co Ltd$290.300.49%NVDANVIDIA Corp$179.90-0.21%Market News and Data brought to you by Benzinga APIs

Samsung's Fab Is More Advanced Than TSMC's," Claims Elon Musk, as Tesla Turns to the Korean Giant for Its Next-Gen AI5 & AI6 Chips

Elon Musk has said a few words of 'appreciation' for Samsung Foundry, which could go a long way for the Korean giant, as it manages to snag up orders for Tesla's latest AI chips. Tesla's Upcoming AI5 Chips Are Claimed to Bring In Massive Performance Improvements, Up to 10x the Previous-Generation One of the most significant achievements for Samsung's foundry division was securing orders for Tesla's AI6 chips, which were to utilize the firm's SF2 (2nm) process. This was seen as a massive breakthrough for the Korean giant, considering that Elon's partnership meant one of the first significant industry exposures to Samsung Foundry. However, at the recent Q3 earnings call, Tesla's CEO, Elon Musk, revealed that both Samsung and TSMC are responsible for producing the AI5 chips, and more importantly, Samsung's Taylor fab is "slightly advanced" compared to TSMC's Arizona facility. We do know that Tesla entered a deal with Samsung to have their AI6 chips produced in the US, but AI5 is a new addition, considering that they were previously produced exclusively at TSMC. This indicates that Samsung Foundry has garnered substantial interest from Elon himself, which is a significant deal for the Korean giant. Interestingly, Elon also discussed the firm's AI5 chips, claiming that they would offer an improvement of up to ten times over AI4. This would be a significant feat, considering that such an upgrade has been achieved by just a single generational change. Discussing the architectural changes within the AI5 chip, Musk notes that Tesla's design team has removed the 'legacy GPU block', likely referring to the general-purpose GPU onboard. Instead, the team has likely integrated AI tile kernels and similar elements for application-specific workloads that would suit Tesla's computing ambitions. Musk also mentions the "half a reticle" size of the AI5 chip, which implies a massive package with many more accelerator tiles and a larger on-chip SRAM footprint, bringing the expected performance improvements that the Tesla team desires. Elon Musk is so optimistic about AI5 that he actually wants an 'oversupply' of the chips, which means that Samsung's Taylor fab would need to ramp up production volumes to ensure they meet the anticipated demand. Securing Tesla as a client will defintely boost Samsung's efforts to produce in the U.S., ultimately paving the way for a more extensive adoption by customers. Follow Wccftech on Google or add us as a preferred source, to get our news coverage and reviews in your feeds.