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Samsung Electronics inked a $16.5 billion chip deal with Tesla, its biggest semiconductor contract yet, and possibly even larger than reported.
What’s the deal: Samsung will manufacture Tesla’s upcoming AI6 chips at its new fabrication plant in Texas. These chips will run the brains of Tesla’s next-generation cars and software systems. Samsung already makes the AI4 version, while TSMC is handling AI5 in Taiwan and Arizona.
In a rare move, Tesla will actively help Samsung optimize manufacturing. That’s how strategic this partnership is.
Why Samsung: the company is the world’s second-largest chip foundry after TSMC. It doesn’t design its own chips but manufactures them for other giants. With its push into 2-nanometer tech, a more compact and powerful chip standard. Reports also say Qualcomm may place orders using this same tech.
But here’s the catch: Samsung is falling behind in a key area, high-bandwidth memory (HBM), crucial for AI chipsets. SK Hynix currently leads the HBM game and supplies to Nvidia. Samsung’s next-gen HBM chip is reportedly delayed till at least September, putting it further behind rivals like SK Hynix and Micron.
Zoom out: beyond tech, this deal has trade war undertones. With South Korea trying to dodge a potential 25% U.S. tariff wall, deepening chip ties with American firms like Tesla could be part of a larger geopolitical play.
In short, Samsung needs a win in the AI chip race and Tesla just gave it a solid boost.
