On Monday, Samsung entered into a contract worth $16.5 billion (£12.3 billion) to produce artificial intelligence chips for Tesla, marking a significant development while Elon Musk was active on social media.
The South Korean technology giant disclosed a partnership with an unnamed client in a regulatory filing. Musk shared details on the platform X.
Musk stated that Samsung will manufacture Tesla’s next-gen A16 chips at its new facility in Texas.
He emphasized, “The strategic significance of this is hard to overstate.”
Back in December, the Biden administration allocated $4.755 billion to support Samsung’s semiconductor manufacturing operations in Texas under the Chips Act. At that time, former U.S. Commerce Secretary Gina Raimondo remarked that this funding would ensure a “steady flow” of chips vital for AI and national security.
In a post on X on Monday, Musk indicated that he had allowed Samsung to assist Tesla in “maximizing manufacturing efficiency” and “expediting” production processes.
He added that the Samsung facility in Taylor, a suburb of Austin, Texas, is “conveniently located not far from my home.”
This agreement is poised to revive projects that have faced significant delays due to Samsung’s struggle to maintain and attract major clients. Ryu Young-Ho, a senior analyst at NH Investment & Securities in Seoul, noted that the Taylor plant “currently has no customers,” making this deal “a logical move.”
In October, Reuters reported that Samsung had postponed shipments of chip manufacturing equipment from ASML, a Dutch supplier, as it had not yet secured key customers. The facility’s opening has already been delayed until 2026.
Samsung is currently producing Tesla’s AI4 chips, which enhance the automaker’s fully autonomous driver assistance system. Taiwan’s TSMC will initially manufacture Tesla’s AI5 chips in Taiwan before moving production to Arizona.
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The regulatory filing announcing Samsung’s chip supply agreement did not disclose the client’s identity, citing a request for confidentiality concerning the transaction to be carried out until the end of 2033.
Samsung has been invited to provide a comment.
Reuters contributed to this article
Source: www.theguardian.com
