Tesla CEO Elon MuskconfirmTesla has signed a contract with SamsungA nine-year foundry supply agreement with a total value of US$165 billionThis cooperation not only boosted Samsung’s stock price, but also injected a shot in the arm to its long-term loss-making wafer foundry business.
According to Elon Musk's disclosure on "X", the cooperation between the two parties will focus on the field of AI chips, with Samsung's new wafer factory in Texas responsible for producing Tesla's next-generation AI6 chip. Samsung has already helped produce Tesla's AI4 chip, while AI5 will be produced by TSMC. The relevant design has been completed in Taiwan, and will then be produced by TSMC's factory in Arizona.
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.
Samsung currently makes AI4.
TSMC will make AI5, which just finished design, initially in Taiwan and then Arizona.
- Elon Musk (@elonmusk) July 28, 2025
Compared to previous foundry cooperation models, this time Tesla has the right to participate in manufacturing efficiency adjustments, and Elon Musk himself will even personally supervise the entire production process. Since the wafer factory is close to Elon Musk's home, Tesla also hopes to more effectively control the supply and quality of key chips in this way.
For Tesla, this cooperation symbolizes a key step in accelerating its AI chip self-production capabilities, which is of strategic significance to the upcoming self-driving and computing platforms. As for Samsung, it will not only help restart the long-delayed expansion plan of the Tyler plant in Texas, but also help alleviate the pressure of its foundry department's accumulated losses of more than 5 trillion won in the first half of the year.
Faced with competitive pressure from TSMC and SK Hynix in the high-end process market, Samsung has continued to lose important customers in the field of AI chip manufacturing in recent years. Companies including Apple, NVIDIA and Qualcomm have all chosen to cooperate with TSMC, causing Samsung to gradually lose its advantage in advanced process technology.
Although Tesla's foundry orders in this cooperation are not expected to use Samsung's immature 2nm process, it is still expected to significantly improve Samsung's foundry capacity utilization and overall operational confidence.
On the other hand, this cooperation is also of great significance to the South Korean government's geo-economic strategy. Under the pressure of the United States' possible imposition of tariffs of up to 25% on foreign semiconductor products, South Korea is actively promoting close cooperation between the chip industry and the domestic manufacturing chain in the United States. The establishment of a long-term cooperation between Samsung and Tesla will help consolidate the industrial alliance between South Korea and the United States.
However, industry analysts still believe that Samsung still faces many technical and operational challenges in competing with TSMC in terms of advanced process yield and technology maturity.
