tesla taps samsung for $16.5 billion ai chip deal

2025-07-28 general

seoul, Monday, 28 July 2025.
samsung electronics secured a significant $16.5 billion contract to supply semiconductors. elon musk confirmed tesla as the unnamed partner. samsung’s texas fab will produce tesla’s next-generation ai6 chips. musk will personally oversee manufacturing efficiency, hinting at an even larger deal. the agreement, starting july 26, 2024, extends to december 31, 2033. samsung’s stock rose 3.5% on the news. this partnership marks a strategic move in ai chip production.

market boost and investor confidence

The announcement of the $16.5 billion contract boosted investor confidence in Samsung [6]. Shares of Samsung Electronics experienced an initial surge, opening 3.5% higher in the South Korean market [1][5]. This increase reflects positive market sentiment following the disclosure of the agreement to supply semiconductors to Tesla [1]. Investors are optimistic about the potential revenue and profitability impact of this large-scale supply agreement, particularly given samsung’s upcoming earnings report on thursday, july 31, 2025 [1].

strategic importance and manufacturing

Elon Musk emphasized the strategic importance of Samsung’s new Texas fab, which will be dedicated to producing Tesla’s next-generation AI6 chip [1]. Musk stated that Samsung has also agreed to allow Tesla to assist in maximizing manufacturing efficiency [1]. This collaboration is a critical point, as Musk plans to personally oversee the acceleration of progress [1]. He also suggested the deal with Samsung could potentially exceed the announced $16.5 billion, signaling further opportunities for growth [1].

samsung’s foundry business and competition

As the second-largest global provider of foundry services, Samsung aims to strengthen its position in the semiconductor market [1][5]. The contract with Tesla underscores the increasing competition in the chip代工领域, where companies are vying to secure advanced semiconductor capacity [5]. While samsung aims to commence 2-nanometer mass production, the company anticipates its second-quarter profit to more than halve, due to weak foundry orders and struggles in capturing ai demand for its memory business [1]. This new deal may help offset some of those concerns [6].

contract details and future outlook

The $16.5 billion agreement, equivalent to 22.8 trillion korean won, is one of Samsung’s largest single chip orders in recent years [2][3][7]. The contract spans from july 26, 2024, to december 31, 2033 [1][6]. While specific details remain confidential until the end of 2033, the deal represents approximately 7.6% of samsung’s 2024 revenue [1][6]. Despite lagging behind competitors like sk hynix in the hbm chip market, this partnership with tesla could enhance investor confidence in samsung’s代工业务 and future prospects [6].

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samsung electronics chip supply