Samsung Electronics has signed a record-breaking USD 16.5 billion deal to produce Tesla’s upcoming AI6 chips, marking a significant milestone for the South Korean tech giant’s foundry business.
According to a report by the Korea Herald, Tesla CEO Elon Musk confirmed on X (formerly Twitter) that Samsung’s chip fabrication plant in Taylor, Texas, will be dedicated to manufacturing these advanced AI chips. Musk emphasized the strategic value of the partnership, noting that Samsung currently produces Tesla’s AI4 chips, while rival TSMC handles the AI5 chips in Taiwan and will later expand production to Arizona.
The 10-year contract, which runs through 2033, represents 7.6% of Samsung’s projected 2024 revenue. Although Samsung’s regulatory filing did not directly name Tesla, Musk’s public confirmation solidified the client’s identity. He further suggested that the total deal value could exceed the reported figure, calling the USD 16.5 billion “just the bare minimum.”
Samsung aims to begin mass production at its Texas facility in the second half of 2026. The announcement boosted Samsung’s stock by 6.83%, closing at 70,400 won—the first time it has surpassed 70,000 won in nearly a year.
The contract is a much-needed win for Samsung’s struggling foundry division, which has been posting annual losses. In Q2 2025, Samsung reported a 4.6 trillion won (USD 3.32 billion) operating profit, nearly 50% lower than the previous year, with its Device Solutions division earning less than 1 trillion won. Foundry and logic chip operations alone are expected to report around 2 trillion won in losses.
Despite calls to spin off the loss-making foundry unit, Samsung Chairman Lee Jae-yong dismissed the idea, reaffirming his commitment to strengthening the division. Industry experts see the Tesla deal as a vote of confidence in Samsung’s semiconductor capabilities, particularly its 2-nanometer process technology.
“This latest contract is significant as it reflects strong trust in Samsung’s chip-making technology,” said Lee Jong-hwan, a system semiconductor engineering professor at Sangmyung University. “It could also encourage other major tech companies to place similar orders in the future.”
With this landmark partnership, Samsung not only bolsters its position in the competitive semiconductor market but also strengthens its ties with Tesla as the EV maker gears up for advanced AI-driven automotive innovations.
Doonited Affiliated: Syndicate News Hunt
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