Samsung Electronics announced a mammoth $16.5 billion deal to supply semiconductors to Tesla, officially confirming a partnership that is expected to shape the global technology for years to come. The deal was formalized on July 26, 2024 , and will remain in effect until the end of 2033, according to a Samsung filing.
Although Samsung initially did not officially name the counterparty , confirmation came via Elon Musk , who revealed in a post on the X platform (formerly Twitter) that Tesla is the buyer of the chips. Musk also said that Samsung will manufacture the AI6 , Tesla's next-generation powerful chip, at a new Samsung factory in Texas .
See also: Lucid Air: Access to Tesla's Supercharger network
"Samsung has agreed to allow Tesla to help maximize production efficiency. This is a critical point, as I will personally take steps to accelerate the pace of progress," said , leaving open the possibility that the deal could exceed $16.5 billion in value.
AI chip war: Samsung vs. TSMC and SK Hynix
The partnership with Tesla is a huge win for Samsung, which is trying to regain ground against strong competition from Taiwan Semiconductor Manufacturing Company (TSMC) and SK Hynix, especially in the race for chips performance AI.
While TSMC remains the global leader in foundry services, Samsung has launched significant investments aimed at producing 2-nanometer chips, a critical technological milestone, as the smaller the size, the greater the processing power and energy efficiency.
See also: Elon Musk: He does not support the merger of Tesla and xAI
The interest is not limited to Tesla. Local media in Korea are reporting that Qualcomm considering orders for 2nm chips from Samsung, which — if confirmed — would further strengthen its position in the foundry sector.
The critical moment for Samsung – Recovery efforts
Despite optimism surrounding the Tesla deal, Samsung is facing revenue pressures. The company warned that second-quarter profitability would be cut in half, mainly due to sluggish demand in the semiconductor market and problems adapting to the explosion of AI demand.
See also: Samsung Electronics acquires Xealth
What the Samsung–Tesla for the industry
Samsung's deal with Tesla:
- It reinforces the automotive industry's shift towards developing custom AI hardware,
- Confirms that AI technologies require integrated hardware - software chains ,
- It gives Samsung a breather in the advanced processor, but not without risks.
The big bet is whether Samsung can meet the quality requirements and production yields that projects of this scale require, especially when TSMC and Hynix have already established themselves as more reliable partners in the field.
Source: www.cnbc.com
