Tesla confirms $16.5 billion Samsung deal for next-gen chip supply

Samsung Electronics has secured a $16.5 billion semiconductor supply deal with Tesla to produce next-generation AI chips, confirmed by both Samsung’s regulatory filing and Elon Musk’s social media announcement. The contract, effective from July 26, 2024, through December 31, 2033, involves Samsung’s new Texas semiconductor fabrication plant dedicated to manufacturing Tesla’s AI6 chips. Musk highlighted the strategic importance of this partnership, noting that Samsung currently produces AI4 chips while TSMC handles AI5 chips, with Tesla collaborating closely with Samsung to optimize manufacturing efficiency. Although Samsung has kept full contract details confidential to protect trade secrets, the deal’s scale and duration underscore its significance. This agreement represents a major boost for Samsung’s foundry business, which has been striving to catch up with competitors like TSMC in the rapidly growing AI chip market. Samsung is advancing its semiconductor technology, including plans for mass production of 2-nanometer chips that offer improved speed and energy efficiency—technology expected to