The $16.5 billion chip manufacturing deal signed between Samsung and Tesla is not just a collaboration between two tech giants; it also stands out as a move that could reshape the balance in the global semiconductor market. Within Samsung’s broader semiconductor business, this development is seen as a key step that could help the company compete more effectively with TSMC.
Tesla and Samsung Electronics Sign $16.5 Billion Chip Supply Agreement
In the early stages of the process, Samsung declined to disclose the details of the agreement and the name of the other party until the end of 2033, citing the protection of trade secrets. However, the details have gradually begun to emerge.
According to the agreement, Samsung Electronics will begin producing next-generation AI-focused AI6 chips specifically developed for Tesla. The chip manufacturing deal is planned to remain valid until the end of 2033.
In an official statement, it was noted that the AI6 chips to be produced are specially designed for Tesla's autonomous driving and artificial intelligence infrastructure. Elon Musk emphasized that this strategic collaboration with Samsung will enhance Tesla’s hardware capabilities.
Tesla CEO Elon Musk Confirms Samsung Will Manufacture Chips for Tesla
Tesla CEO Elon Musk officially confirmed the agreement through a social media post. Musk stated that the process is not just a business partnership but one in which Tesla will be directly involved in the production process.
Samsung's massive new factory will be dedicated to producing Tesla's next-generation AI6 chips. This facility is positioned as a next-generation foundry located in Taylor, Texas. The production of AI6 chips at this site will also strengthen Tesla’s supply chain operations within the United States.
Tesla’s Next-Generation AI6 Chip to Be Manufactured at Samsung’s New Texas Factory
The new AI6 chips will be produced using Samsung’s 2-nanometer manufacturing process. This technology will offer enhanced power efficiency and processing capabilities, delivering high performance to Tesla’s autonomous driving systems. These chips, expected to significantly upgrade Tesla’s processor infrastructure, are anticipated to enter mass production soon.
Samsung is currently producing AI4 chips, while TSMC is handling the manufacturing of Tesla’s AI5 chips. TSMC will produce the newly finalized AI5 design first in Taiwan and later in Arizona. This demonstrates that Tesla is working in parallel with multiple manufacturers, diversifying its chip supply.
Competitive Strength and the Global Semiconductor Race
Samsung’s agreement with Tesla is expected to enhance its competitive power in the global semiconductor market. However, despite this major gain, Samsung has been facing some challenges in the memory chip segment.
The company is reportedly struggling to meet the growing demand for AI-focused memory chips, falling behind competitors like SK Hynix and Micron in the high-bandwidth memory (HBM) sector. As a result, the production of the AI6 chip plays a critical role in Samsung’s overall strategy.
This step is also seen as an opportunity for Samsung to compete more effectively with TSMC. Moving production technology to the 2nm level shows that Samsung is pushing the boundaries of innovation.
Strategic Partnership to Continue Through 2033
The large-scale collaboration between Samsung and Tesla carries a vision that impacts not only the present but also the next decade. Beginning production at the Texas facility will support the localization of technology manufacturing in the U.S. while accelerating Tesla’s journey toward independent chip development.
This agreement, valid until the end of 2033, will further solidify Tesla’s artificial intelligence strategy and offer Samsung the opportunity to deliver its chips to broader global markets.
