Tesla CEO Elon Musk confirmed a $16.5 billion chip supply deal with Samsung Electronics, marking a major boost for the South Korean tech giant’s struggling contract manufacturing business.
Samsung will produce Tesla’s next-generation AI6 chips at its new facility in Taylor, Texas. “Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency,” Musk posted on X, adding, “I will walk the line personally to accelerate the pace of progress.”
Samsung’s giant new Texas fab will be dedicated to making Tesla’s next-generation AI6 chip. The strategic importance of this is hard to overstate.
— Elon Musk (@elonmusk) July 28, 2025
Samsung currently makes AI4.
TSMC will make AI5, which just finished design, initially in Taiwan and then Arizona.
Samsung’s shares surged nearly 7% following the announcement, hitting their highest level since September 2023. The Texas fab, previously delayed due to a lack of clients, now has a critical customer through 2033.
While Tesla’s A14 chips are already made by Samsung, the AI6 order comes as Samsung works to close the gap with industry leader TSMC, which holds 67% of the global foundry market. Samsung currently controls just 8%.
The deal is seen as a lifeline for Samsung’s foundry unit, which posted an estimated $3.6 billion loss in the first half of 2025.
