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Samsung loses Tesla’s huge 4nm chip order to TSMC

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Last updated: December 23rd, 2022 at 08:08 UTC+01:00

The latest report provides solid proof that the 4nm chip deal between Elon Musk-led Tesla and Taiwanese silicon giant TSMC has gone through. A few months ago, it was reported that Tesla placed a huge 4nm chip order at TSMC, choosing TSMC over Samsung. The 4nm chips will be used in Tesla cars’ self-driving systems in the future.

According to DigiTimes Asia, the deal between Tesla and TSMC is now complete, making Tesla one of the seventh-largest clients of TSMC. Reportedly, TSMC’s Arizona facility will be the one manufacturing 4nm chips, and volume production will begin in 2024. TSMC completed the construction of its Arizona facility last year, and it hired around 250 Americans to work in the facility.

Not only Tesla but Apple CEO Tim Cook has also said that his company plans to buy 3nm chips from TSMC’s Arizona facility. TSMC will begin chip production in 2024, similar to when it will begin manufacturing 4nm chips for Tesla. In an event earlier this month, Taiwan Semiconductor’s Chairman Mark Liu said the new Arizona facility would generate $10 billion in revenue once it gets functioning.

Industry analysts believe that this would be a big blow for the South Korean semiconductor giant Samsung. Moreover, it is also speculated that this deal would impact Samsung’s profits in the next couple of years. It was recently reported that Samsung is trailing way behind TSMC in the global foundry market in Q3 2022. The gap between TSMC and Samsung has grown wider to 40.6 percentage points in Q3 2022 compared to 33.8 percentage points in Q4 2021. So, Samsung is in a spot of bother as far as its foundry situation is concerned.

However, on the other side, Tesla chose Samsung as the camera supplier for its Vision self-driving system. While there are rumors suggesting that Tesla will make use of Samsung cameras in its upcoming Cybertruck or other EVs, nothing has been confirmed as of yet.

Business 4nmSamsung FoundryTaiwanTeslaTSMCUSA
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