Tesla CEO Elon Musk has announced a $16.5 billion deal with Samsung Electronics to supply next-generation AI chips. This serves as a major win for Samsung’s struggling chip foundry business.
Samsung’s new factory in Taylor, Texas, will produce Tesla’s AI6 chip designed for future self-driving systems. This may revive a delayed project that had faced challenges attracting clients.
“Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency,” Musk said on X. “I will walk the line personally to accelerate the pace of progress.”
The Texas fab’s location near Musk’s residence is also a strategic benefit. He added that the $16.5 billion figure is a starting point, suggesting the actual output could be “several times higher.”
Samsung’s shares surged 6.8% following the news, hitting their highest level since September 2023. Tesla stock also climbed 1.9% in U.S. premarket trading.
Industry analysts say the deal is a turning point for Samsung. “The Taylor fab had virtually no customers, so this order is quite meaningful,” said Ryu Young-ho, a senior analyst at NH Investment & Securities.
Although no specific production date for the AI6 chips was revealed, Musk previously noted that Tesla’s AI5 chips would roll out in late 2026. Based on that timeline, analysts expect AI6 production by 2027 or 2028, though Tesla has often missed past targets.
Currently, Samsung manufactures Tesla’s AI4 chips, which power its Full Self-Driving software. Meanwhile, rival TSMC will handle AI5 chip production, starting in Taiwan and eventually moving to Arizona.
This deal also supports Samsung Chairman Jay Y. Lee’s broader strategy to shift beyond memory chips and expand the company’s presence in contract chipmaking.
