Tesla signs 16.5 billion dollar chip deal with Samsung

Tesla has signed a USD 16.5 billion semiconductor supply agreement with Samsung Electronics.

As confirmed in a regulatory filing and by Tesla CEO Elon Musk, the deal took effect on July 26, 2025. It’s set to run until December 31, 2033.

Under the agreement, Samsung will manufacture Tesla’s AI6 chips at its new Texas facility. The Korean tech giant currently produces the AI4 chips for Tesla. Meanwhile, TSMC is expected to handle production of the AI5 chip.

Musk said Tesla will also assist Samsung in refining its chip manufacturing processes. He also noted that the deal’s total value could exceed USD 16.5 billion depending on future developments.

Samsung stated that certain parts of the agreement may be adjusted or canceled during the contract period. Following the announcement, Samsung shares surged over 6%, reaching their highest level since September 2024.

Samsung also revealed plans to produce 2nm chips with better performance and power efficiency. The company is currently the second-largest chip foundry globally, next to TSMC.