Samsung Electronics has secured a landmark ₩22.8 trillion ($16.5 billion) deal to manufacture next-generation AI semiconductors for Tesla, marking a pivotal win for the tech giant’s struggling foundry business and accelerating Tesla’s ambitions in autonomous driving.
The agreement, announced Monday, will run through 2033, with production set to take place at Samsung’s upcoming Taylor, Texas facility, where Tesla’s advanced AI6 chips will be built.
Tesla CEO Elon Musk confirmed the deal via X, calling it “just the bare minimum,” suggesting the actual contract value could rise significantly over time. Musk also pledged to oversee the chip fabrication process personally to optimize production efficiency.
Why It Matters:
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Tesla’s AI6 chips are critical to its self-driving technology roadmap, forming the computational core of its Full Self-Driving (FSD) systems.
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The move bolsters Samsung’s foundry division, which has been operating at a loss and losing ground to Taiwan’s TSMC, the current industry leader.
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Samsung’s foundry market share shrank to 7.7% in Q1 2025, while TSMC holds 67.6%, according to TrendForce.
Samsung previously manufactured Tesla’s AI4 chips, while TSMC is handling the AI5 generation. The rapid transition from AI4 to AI6 highlights Musk’s aggressive timeline, despite skepticism surrounding Tesla’s repeated delays in delivering fully autonomous vehicles.
Boost to Samsung’s Stock and Industry Perception
Samsung shares jumped nearly 7% on the Seoul exchange following the announcement — their highest since September. Key suppliers such as Soulbrain Co. also surged, climbing 16%, reflecting strong investor confidence in the long-term potential of the AI-chip market.
“Their foundry business has been loss-making and struggling with under-utilization, so this will help a lot,”
– Vey-Sern Ling, Managing Director, Union Bancaire Privée
The contract is Samsung’s largest foundry deal since Chairman Jay Y. Lee was cleared of legal charges earlier this year, marking a turning point for the company’s manufacturing ambitions.
However, the Texas chip plant — a $17 billion facility — has been delayed until 2026, adding urgency to Samsung’s need to stabilize production and reclaim competitiveness in advanced semiconductor manufacturing.
Tesla’s Road to Autonomy
For Tesla, the Samsung deal reinforces its high-stakes bet on AI hardware as it races to deliver on long-standing promises of self-driving cars. Following a disappointing Q2 earnings report, Musk doubled down on his forecast that Level 4 autonomy could roll out by late 2026, despite limited regulatory approval and unresolved safety concerns.
But the fast evolution of chip platforms — from AI4 to AI5 and now AI6 — may frustrate early adopters. Tesla previously halted hardware retrofits in 2023, leaving some customers with outdated Full Self-Driving tech despite earlier guarantees.
