Tesla Partners with Samsung for Major Chip Manufacturing Deal in Texas

Mon 28th Jul, 2025

The American electric vehicle manufacturer Tesla has entered into a significant agreement with the South Korean electronics giant Samsung, focusing on the production of computer chips. Elon Musk, Tesla's CEO, announced that Samsung's new facility in Texas will be dedicated to manufacturing the next-generation AI6 chips for Tesla. The previous version, known as the AI5, is currently being produced by the semiconductor manufacturer TSMC.

Samsung revealed over the weekend that it has signed a contract valued at $16.5 billion, although the specific client was not disclosed at that time. This deal is expected to alleviate some of Samsung's losses in the contract manufacturing sector and invigorate the construction of the planned facility in Texas, which has faced delays due to a lack of orders. Notably, Samsung has postponed the acquisition of a specialized machine intended for chip production.

According to analyst Pak Yuak from the online brokerage Kiwoom, the new contract is anticipated to significantly reduce Samsung's losses in contract manufacturing, which were estimated to exceed EUR3 billion in the first half of the year. Samsung has experienced a decline in its client base in recent years, losing several major customers such as Apple, Nvidia, and Qualcomm to TSMC. Currently, TSMC holds a dominant position in the market, controlling approximately two-thirds of the global contract manufacturing market, while Samsung accounts for about 8%.

This partnership marks a strategic move for both companies, as Tesla continues to enhance its technology in the rapidly evolving electric vehicle market, while Samsung seeks to strengthen its position in the semiconductor industry amid increasing competition. The collaboration is likely to provide a boost to both companies, allowing them to leverage each other's strengths to navigate the challenges of the tech landscape.


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