Samsung Electronics has struck a $16.5 billion agreement to produce advanced AI chips for Tesla, marking a significant win for its underperforming foundry business. The deal, valued at 22.8 trillion won, will run through the end of 2033 and focuses on manufacturing Tesla’s next-generation AI6 semiconductor, designed for AI-driven automotive systems.
Production will take place at Samsung’s new facility in Taylor, Texas, which is part of the company’s push to strengthen its position in high-performance chipmaking and challenge rivals such as Taiwan Semiconductor Manufacturing Company (TSMC). Tesla CEO Elon Musk confirmed the agreement on X, highlighting the strategic importance of these AI chips to Tesla’s evolving technology roadmap, which includes autonomous driving and advanced vehicle intelligence.
The partnership gives Tesla a domestic chip supply chain for its next-generation AI systems, reducing reliance on overseas suppliers and enhancing supply security amid ongoing global chip competition. For Samsung, the deal provides a much-needed boost to its struggling semiconductor foundry unit, which has faced challenges winning major contracts in recent years due to competition from TSMC and Intel.
The collaboration underscores a growing convergence of automotive and semiconductor industries as electric vehicle manufacturers increasingly rely on AI chips to power autonomous driving systems and in-vehicle computing. By securing Tesla as a major client for nearly a decade, Samsung positions itself as a key player in the future of AI-enabled mobility while enhancing U.S.-based chip manufacturing capabilities.
This agreement also aligns with U.S. efforts to strengthen domestic semiconductor production, making Samsung’s Taylor plant a pivotal hub for next-generation automotive chips.
