Samsung’s $16.5 billion agreement with Tesla sets the stage for a long-term partnership focused on cutting-edge chip development. The contract spans nearly a decade and tasks Samsung Foundry with producing advanced chips specifically for Tesla’s future EVs, starting in 2025.
The flagship product of this collaboration is the AI6 system-on-chip (SoC), built on Samsung’s 2nm SF2A technology. Manufacturing will take place in Samsung’s newly opened chip plant in Taylor, Texas, which is strategically located near Elon Musk’s residence—a factor Musk himself acknowledged in public comments.
Elon Musk praised Samsung’s willingness to cooperate on optimizing the production line, calling the collaboration “crucial” to Tesla’s next-gen vehicle architecture. Musk even announced plans to personally visit the Texas-based facility to ensure the project stays on track and advances swiftly.
This level of involvement reflects the strategic importance Tesla places on reliable chip supply, especially as it scales up AI-driven vehicle capabilities. Samsung’s commitment offers Tesla a more localized, agile, and innovative solution compared to its existing chip suppliers.
Following the announcement, Samsung’s stock surged nearly 5%, reaching its highest valuation since September 2024. The deal is expected to help Samsung regain ground in the competitive chipmaking space, particularly in the 2nm and 3nm segments where it has faced recent production hurdles.
Until now, TSMC had been producing Tesla’s AI5 chips, but reports suggest the Taiwanese firm struggled to meet growing demand. This shift to Samsung signals Tesla’s need for a more scalable and cooperative manufacturing partner.
The new contract could rejuvenate Samsung Foundry’s position in a market increasingly dominated by TSMC. Analysts view this deal as a strategic coup, potentially helping Samsung attract more high-profile clients and stabilize its advanced-node roadmap.
As the EV and AI sectors continue to converge, partnerships like this will define the competitive edge in both industries. Tesla’s renewed commitment to Samsung may signal broader industry changes ahead.
