Samsung To Make Tesla AI Chips In Multiyear Texas Deal

Samsung Electronics Co. will manufacture AI semiconductors for Tesla Inc. under a new $16.5 billion agreement—a significant boost for its underperforming chip foundry business, Yoolim Lee and Shinhye Kang reported for Bloomberg New.

Despite the deal, Samsung continues to trail TSMC. I Photo: Samsung Semiconductor Facebook

South Korea’s largest company announced recently that it secured the 22.8 trillion won agreement, which will run through the end of 2033. A new facility in Taylor, Texas, will produce Tesla’s next-generation AI6 chip, Tesla CEO Elon Musk confirmed in a post on X, formerly Twitter, following a Bloomberg report.

Samsung’s Seoul-listed shares surged 6.8%—their highest since last September—while suppliers like Soulbrain Co. jumped as much as 16%.

Despite the deal, Samsung continues to trail Taiwan Semiconductor Manufacturing Co. (TSMC), which held a 67.6% share of the global chip foundry market in the first quarter of 2025.

Samsung’s market share dropped to 7.7%, down from 8.1% the previous quarter, according to data from Taipei-based TrendForce.

“The strategic importance of this is hard to overstate,” wrote Musk, 54, on X. He described the announced $16.5 billion value as “just the bare minimum,” adding that actual output could be “several times higher.”

Musk, who also owns X, said he plans to personally walk the chip fabrication line and has been authorized by Samsung to help optimize production.

The AI6 chip will serve as the core of Tesla’s future self-driving hardware suite. Samsung currently produces Tesla’s existing AI4 chip, Musk confirmed.