Samsung secures a key deal with Tesla to manufacture AI6 chips, with production expected to begin at the Texas plant in 2026.
Samsung Electronics just landed a huge $16.5 billion deal to make next-generation AI chips for Tesla, a big win for both companies' future plans. This agreement, which runs through 2033, means Samsung will be cranking out Tesla's AI6 chips at its new facility in Taylor, Texas. Production is set to kick off in 2026.
Elon Musk, Tesla's CEO, confirmed these Samsung-made AI6 chips will be vital for Tesla's self-driving tech. Musk even stressed how strategic this partnership is, mentioning he plans to personally keep an eye on efforts to boost manufacturing efficiency at Samsung's Texas plant.
The deal's importance goes beyond just the manufacturing side. As part of the U.S. government's push for domestic semiconductor production, Samsung's Texas plant received a hefty $4.75 billion in funding through the Chips Act.
For Samsung, this deal is a real turning point! The Taylor plant had previously struggled to land big clients and faced delays. With Tesla now on board as a major client, this agreement provides a much-needed shot in the arm for Samsung's contract manufacturing business, which hadn't been performing as well.
Currently, Samsung makes Tesla's AI4 chips. Taiwan's TSMC is slated to produce the upcoming AI5 chips in both Taiwan and Arizona. However, with this new agreement, Tesla is set to broaden its chip supply chain, leaning less on TSMC.
Analysts see this partnership in a good light. Not only does it give Samsung a high-profile client, but it also strengthens Tesla's U.S.-based supply chain, offering more stability as it chases advancements in autonomous driving.
While this deal isn't expected to directly boost Tesla's electric vehicle sales or speed up robotaxi deployment, it definitely bolsters the company's chip supply chain. After the announcement, Samsung's stock climbed 3.5%, showing positive market feelings about the deal and the company's growing presence in the U.S. semiconductor market.
With this partnership set to last until 2033, it truly marks a major milestone in both Samsung's and Tesla's quests to lead the charge in AI-driven technologies.
