Samsung Secures $16.5 Billion Deal to Supply AI Chips for Tesla

Samsung Electronics has struck a landmark $16.5 billion agreement with Tesla (NASDAQ: TSLA) to manufacture the automaker’s next-generation AI6 inference chips at its new semiconductor facility in Taylor, Texas. The contract, set to run through 2033, strengthens Samsung’s ambitions to expand its U.S. foundry footprint and positions Tesla to advance its AI-driven projects.

Samsung’s Foundry Gains a Key Client

Samsung’s Texas plant, slated to begin operations in 2026, will use the Tesla contract as a launchpad to reestablish credibility in advanced logic chip manufacturing—a segment where Taiwan Semiconductor Manufacturing Company (TSMC) remains the dominant player. The deal is expected to contribute roughly 7.6% of Samsung’s 2024 revenue, providing a significant boost to its contract-manufacturing unit, which has struggled to gain traction.

Analysts view the agreement as Samsung’s biggest U.S. foundry win to date, potentially setting the stage for broader competition with TSMC in high-performance AI chip production.

Tesla’s Strategic Shift Toward AI and Robotics

Tesla CEO Elon Musk described the partnership as critical to the company’s long-term AI roadmap. He announced plans to personally oversee early production efforts to ensure manufacturing efficiency and quality control, a hands-on approach Musk referred to as “walking the line.”

The AI6 chip is expected to power Tesla’s Full Self-Driving (FSD) system, robotaxi platform, Optimus humanoid robots, and the company’s Dojo AI supercomputing centers, which underpin autonomous driving and advanced robotics initiatives.

Market Reaction and Competitive Impact

Following the announcement, Samsung shares climbed nearly 6.8%, while Tesla stock gained approximately 4.2%, outperforming sector peers. Investors welcomed the clarity on Tesla’s chip roadmap and Samsung’s expansion into AI chip manufacturing.

The deal comes at a time when Samsung’s global foundry share is under 8%, far behind TSMC’s 67%. Securing a high-profile customer like Tesla signals a strategic push to capture growth from AI-driven demand and automotive computing.

Execution Risks and Timeline Challenges

Production of the AI6 chip is unlikely to start before 2028, with Tesla continuing to rely on transitional AI5 chips manufactured by TSMC until Samsung’s Texas facility ramps up. Any delays in Samsung’s production schedule could impact Tesla’s rollout of robotaxis and advanced AI services.

While the contract is unlikely to drive immediate gains in Tesla’s EV operations, it highlights the company’s evolution toward becoming an AI and robotics powerhouse, reducing dependence on external chipmakers and strengthening U.S.-based semiconductor supply chains.

Tips for Traders

• Watch Samsung (KRX: 005930) and its U.S.-listed ADRs for price movements tied to updates on the Texas plant’s construction and chip delivery timelines.

• Monitor Tesla (NASDAQ: TSLA) earnings calls for details on AI6 integration into autonomous driving and robotics platforms.

• Track semiconductor peers, including NVIDIA, AMD, and TSMC, as Tesla’s chip strategy could shift competitive dynamics in AI compute.

• Follow Texas-based semiconductor infrastructure investments, as local suppliers may benefit from Samsung’s expanded operations.

• Stay alert to U.S.–South Korea trade policy developments, which could impact subsidies, export controls, and overall semiconductor market sentiment.