Billionaire Elon Musk has confirmed that Tesla will source $16.5 billion (about £12.8 billion) worth of chips from Samsung Electronics until 2033, marking a major win for the South Korean firm’s struggling chip foundry business.
Tesla has signed a $16.5 billion (about £12.8 billion) agreement with Samsung Electronics for a long-term supply of advanced automotive chips, Elon Musk said on Monday, in a deal expected to stabilise Samsung’s embattled contract chipmaking unit.
Musk said the chips, designated AI6, would be produced at Samsung’s forthcoming fab in Taylor, Texas.
“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,” he wrote on social media platform X.
Samsung confirmed the deal earlier on Monday without naming the client, citing confidentiality requests. However, three sources briefed on the matter told Reuters the customer is Tesla. Samsung shares jumped more than 4% after the announcement.
The agreement will run until the end of 2033 and is seen as a strategic boost to Samsung’s foundry operations, which have lost ground to Taiwanese rival TSMC. Analysts estimate the unit incurred losses exceeding 5 trillion won (about $3.63 billion) in the first half of 2025.
The foundry has been losing customers such as Apple and Nvidia to TSMC due to lagging yields in advanced chip nodes. Industry analysts said the Tesla deal will help reduce these losses, although the chips involved are unlikely to use Samsung’s cutting-edge 2-nanometre technology.
“Samsung agreed to allow Tesla to assist in maximising manufacturing efficiency,” Musk said, adding he would personally oversee progress at the plant, located near his residence.
The chip partnership may also carry geopolitical weight. South Korea is pursuing closer U.S. industrial ties, including in chipmaking and shipbuilding, as it negotiates to avoid possible 25% tariffs on key exports.
Samsung is the world’s largest maker of memory chips but continues to trail TSMC in logic chip manufacturing. Analysts say the Tesla contract, while not enough to reverse Samsung’s market position, could restore investor confidence as it seeks to win back high-profile clients.
South Korea's presidential Blue House said on Monday it was reviewing U.S. President Donald Trump's comments on scaling back joint military...
Shipping through the Strait of Hormuz slowed to a near standstill over the weekend, with five commodity vessels transiting Saturday and none on Sun...
American actress Hayden Panettiere...
At least 11 people were killed in Israeli strikes on southern Lebanon on Saturday, among the deadliest since a June ceasefire. Meanwhile, Qatar denied holding Iranian pilots. It said it had found the remains of one pilot after an airspace violation and had contacted Iran to coordinate a handover.
A wildfire in Croatia driven by strong winds descended on the tourist town of Omis overnight, engulfing houses, forcing about 1,000 people to evacuate to safety and injuring dozens, fire brigade and health officials said on Friday.
U.S. President Donald Trump's threats to make the Strait of Hormuz part of U.S. territory have been mocked by Iran's Deputy Foreign Minister, Kazem Gharibabadi, who said the sea passage "cannot be seized by tweet."
Russia and Ukraine traded large-scale overnight attacks targeting energy, industrial and military facilities on Saturday, with a three-month-old baby killed and 11 people injured in a Russian drone strike on a residential building in Ukraine’s Dnipropetrovsk region.
For fishermen along Pakistan’s southwestern coast, the consequences of the U.S.-Iran conflict are being felt far from the battlefield.
Online fast-fashion platform Shein lost a London copyright lawsuit against rival Temu on Thursday over photographs used to promote some products.
Norway’s $2.3 trillion sovereign wealth fund has revealed a 0.05 per cent stake in SpaceX worth $1.22 billion, marking its first reported holding in Elon Musk’s space company.
U.S. data analytics firm Palantir Technologies has reported a 93 per cent year-on-year jump in second-quarter revenue, even as the company faces continued criticism over its work with Israel's military and allegations linking its technology to the war in Gaza.a.
Rising trade across the Caspian Sea is strengthening Georgia’s role as a logistics hub and could help the country develop higher-value industries, according to the Asian Development Bank (ADB).
Ford raised its full-year earnings forecast after reporting stronger-than-expected second-quarter adjusted profit, as resilient demand for its vehicles and operational improvements helped offset tariff-related costs.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment