Samsung bags massive $16.5 billion deal to make 2nm AI chips for Tesla

Samsung has signed a $16.5 billion deal with Tesla, where, the South Korean technology giant’s semiconductor manufacturing division, Samsung Foundry, will make chips for the electric vehicle maker from 2025 through the end of 2033 (via Bloomberg, Elon Musk, Jukan).

The first chip that Samsung will make for Tesla as a part of this deal is the EV maker’s next-generation chip, dubbed AI6, most likely for its future cars, on its 2nm fabrication process (SF2A) at its upcoming semiconductor manufacturing plant in Taylor, Texas, USA.

Elon says that Samsung has agreed to allow Tesla to assist Samsung Foundry in maximising manufacturing efficiency, which, according to him, is a “critical point.” To that effect, the CEO of Tesla says that he will personally visit the factory/production line to “accelerate the pace of progress.” He further states that the “fab is conveniently located not far” from his home.

According to Elon, “The strategic importance of this is hard to overstate.” Since the news about the deal broke out, Samsung’s share price rose as much as 5%, making it reach the highest point since September 2024. 

Lately, Samsung Foundry hasn't been performing well as it faced difficultly churning out good yield rates with 2nm and 3nm fabrication processes, and therefore, couldn’t attract a lot of customers. Samsung’s latest deal with Tesla should help the South Korean tech giant’s situation immensely. 

Samsung already makes Tesla’s AI4 chips. However, the EV maker’s upcoming chip, the AI5, is being made by Taiwan Semiconductor Manufacturing Company (TSMC). However, TSMC reportedly can’t meet all the demand. That, and Samsung’s willingness to work closely with Tesla might have made the EV company sign a deal with the South Korean tech giant.