Samsung already manufactures Tesla’s current A14 chips, its next-gen A15 chips will be produced by TSMC, Musk had previously confirmed.
In a strategic move poised to reshape the chip manufacturing landscape, Tesla CEO Elon Musk on Monday confirmed a $16.5 billion chip supply deal with Samsung Electronics, aimed at producing Tesla’s next-generation AI6 chips. The chips are expected to be manufactured at Samsung’s new fab in Taylor, Texas, a delayed but critical project for the South Korean tech giant’s contract manufacturing ambitions.
“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,” Musk posted on X, sending Samsung shares soaring over 6%.
While the deal had previously been reported without disclosing the client, Reuters confirmed via three sources that Tesla is the buyer—potentially reviving a Samsung project that has been plagued by delays and a lack of major customers. The fab’s operational start has already been postponed to 2026.
In an unusual operational disclosure, Musk added:
“Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency… I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house.”
The deal offers a much-needed boost to Samsung’s struggling foundry division, which has been bleeding losses—estimated at over $3.6 billion (5 trillion won) in just the first half of 2025, according to analysts at Kiwoom Securities. Once reliant on memory chip dominance, Samsung’s pivot into logic chip manufacturing through its foundry business has faced stiff resistance from market leader TSMC, which currently holds a 67% global share compared to Samsung’s 8%, per TrendForce.
While Samsung already manufactures Tesla’s current A14 chips, its next-gen A15 chips will be produced by TSMC, Musk had previously confirmed. The A16 chips, to be developed under this deal, appear to mark a renewed vote of confidence in Samsung, particularly in U.S. territory.
The Samsung-Tesla partnership arrives as South Korea pursues deeper tech ties with the U.S. amid global semiconductor supply chain realignments. Seoul is pushing for agreements in the chipmaking and shipbuilding sectors as part of its broader trade negotiation strategy with Washington, especially in light of potential 25% U.S. tariffs on Korean exports.
While not explicitly linked to the deal, the timing suggests possible geopolitical undercurrents, especially as Samsung attempts to reclaim market share lost to TSMC’s elite clientele like Apple, Nvidia, and Qualcomm.
Samsung’s Texas fab, once heralded as a U.S. manufacturing breakthrough, had suffered from client defections, equipment delays, and stalled timelines. Reports last October revealed Samsung had postponed receiving advanced EUV tools from Dutch supplier ASML due to the fab’s uncertain future.
Now, with Tesla on board and Musk pledging personal involvement, the Taylor project may finally gain the traction needed to become a central player in the AI chip arms race.
Samsung is set to release its earnings on Thursday. With this new anchor client secured and a major American endorsement in hand, investors will be watching closely to see whether this is the inflection point the South Korean giant has been waiting for.
