Tesla–Samsung Chip Deal: $16.5 Billion AI6 Contract Boosts Foundry Revival

Tesla Samsung chip deal was confirmed on July 28, 2025, when Tesla CEO Elon Musk announced a landmark agreement with Samsung Electronics. The multiyear contract, valued at $16.5 billion, tasks Samsung’s Texas facility with manufacturing Tesla’s next-generation AI6 chips through 2033

📌 Deal Overview

• The agreement spans eight years and covers manufacturing of Tesla’s custom AI6 chips at Samsung’s Taylor, Texas fab, a new facility backed by U.S. CHIPS Act funding
• Musk confirmed that Samsung will allow Tesla to manage manufacturing improvements directly, calling the fab’s proximity to his residence strategic for progress monitoring
• Following the announcement, Samsung’s shares surged about 6–7%, reflecting investor confidence in the deal’s impact

🧠 Strategic Importance

Reviving Samsung’s Foundry Business

Samsung’s foundry division has struggled to compete with industry leader TSMC. This deal marks one of its largest single-client contracts and could help reduce losses exceeding 5 trillion won reported earlier in 2025

Empowering Tesla’s AI Ambitions

Securing a long-term supply of AI6 chips is vital for Tesla’s future electric vehicles, autonomous driving capabilities, humanoid robots, and AI infrastructure. The contract also provides Tesla greater control over chip design and efficiency improvements

🔍 Production and Technology Details

• The AI6 chips will be fabricated using Samsung’s advanced 2 nanometer process, positioning the Taylor fab as a key production hub in Samsung’s move beyond memory chips into contract manufacturing
• Tesla already works with Samsung on its AI4 chips, while TSMC produces the intermediate AI5 generation. This deal anchors a long-term supply line for newer chip formats

📈 Market and Industry Implications

• The agreement is believed to represent about 7.6% of Samsung’s 2024 revenue and offers a meaningful boost in investor sentiment toward its foundry segment
• Analysts expect this to strengthen Samsung’s ability to attract more AI and automotive customers, helping narrow its gap with TSMC in advanced-node manufacturing

🔭 What Happens Next?

1. Operational ramp-up: Samsung must finalize the Taylor facility and improve yield rates on its 2 nm node.
2. Performance benchmarks: Tesla will closely monitor chip performance and production quality.
3. Expansion potential: Successful delivery may attract more clients to Samsung’s U.S. fab network.
4. Geopolitical context: The deal aligns with U.S. policy goals under the CHIPS Act and insulates Samsung from potential trade tariffs and global supply chain risks Financial Times

Summary Table