Samsung to manufacture Tesla's AI6 chips in $16.5B agreement

Tesla and Samsung have entered a landmark $16.5 billion agreement to manufacture Tesla's next-generation AI6 chips at Samsung's new fabrication facility in Taylor, Texas.

This multiyear deal runs through 2033 and marks the largest contract ever for Samsung's foundry business.

The AI6 chips are poised to power Tesla's autonomous driving systems and potentially future robotics platforms.

CEO Elon Musk emphasized the strategic importance of the deal and will personally oversee the efficiency of the production plant in Texas.

Tesla’s evolving semiconductor strategy

Tesla currently uses Samsung to produce its A14 chips and contracts with TSMC for its upcoming AI5 chips.

The AI6 chips, expected to be Samsung's most advanced, will be manufactured using their cutting-edge 2-nanometer process technology.

This multi-vendor strategy leverages the strengths of each manufacturer, supporting Tesla's lead in electric vehicle autonomy while hedging supply risks.

Did you know?
Samsung's new Texas fabrication plant utilizes advanced 2-nanometer process technology, one of the smallest semiconductor manufacturing nodes currently in development.

Samsung's foundry business revival

Samsung's contract manufacturing unit reported losses exceeding $3.6 billion in the first half of 2025 and holds a 7.7% global foundry market share, behind market leader TSMC's 67.6%.

This Tesla deal revives Samsung's ambitions and validates its Texas fab plant after struggling to attract major clients.

The agreement positively impacted Samsung’s stock price, reflecting investor optimism for future growth fueled by this cornerstone client.

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Geopolitical and industry implications

The partnership underscores strengthening U.S.-South Korea technology ties amid ongoing trade tensions.

Samsung's advanced process technology is gaining international recognition, potentially attracting additional clients.

Tesla's decision to diversify chip production across countries and suppliers could help mitigate geopolitical risks and supply chain disruptions.

Tesla and Samsung’s $16.5 billion chip agreement exemplifies a strategic alliance shaping the future of autonomous vehicle technology and semiconductor manufacturing.