Tesla CEO Elon Musk confirmed the automaker has signed a $16.5 billion chip supply deal with Samsung Electronics. Samsung had earlier announced the deal without naming the customer due to a confidentiality request.
According to three Reuters sources, Tesla is the buyer. Musk said 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.”
Samsung shares rose more than 4% after the news. The deal runs through the end of 2033. If referring to Samsung’s new plant in Taylor, Texas, the agreement could revive the delayed project.
Samsung has been struggling to secure major clients amid losses in its foundry business. Analyst Pak Yuak at Kiwoom Securities estimated foundry losses of over 5 trillion won ($3.63 billion) in the first half of this year.
Musk also posted, “Samsung agreed to allow Tesla to assist in maximising 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.” The statement highlights Tesla’s involvement in production optimisation.
Samsung trails TSMC and SK Hynix in the AI chip race. This lag affects its profits and share value. Samsung is the world’s top memory chip maker but faces challenges in its logic chip foundry business. TSMC leads the advanced chip market with clients like Apple, Nvidia, and Qualcomm. Analysts say Samsung’s client loss is due to technological gaps.
Lee Min-hee from BNK Investment & Securities said the order is unlikely to involve Samsung’s 2-nanometer tech, which still faces production issues. Still, the deal may support South Korea’s push for U.S. partnerships in chips and shipbuilding, amid concerns over potential 25% U.S. tariffs.
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