Samsung Electronics has officially confirmed a multi-year chip manufacturing agreement with Tesla valued at approximately $16.5 billion, making its new Texas semiconductor fabrication plant the production site for Tesla’s next-generation AI6 processors. Tesla CEO Elon Musk publicly acknowledged the deal via a post on X, highlighting the strategic importance of the partnership and revealing that Samsung’s Taylor, Texas fab will focus exclusively on producing these custom AI chips.
The agreement, disclosed earlier by Samsung without naming Tesla, will run through December 31, 2033, marking the largest chip supply contract ever secured by Samsung’s foundry division. According to Musk, Samsung currently manufactures Tesla’s AI4 chips, while the intermediate AI5 chip production has been assigned to TSMC facilities in Taiwan and 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.
— Elon Musk (@elonmusk) July 28, 2025
Samsung currently makes AI4.
TSMC will make AI5, which just finished design, initially in Taiwan and then Arizona.
A key aspect of the deal is Tesla’s involvement in optimizing manufacturing efficiency at the Texas plant, which Musk describes as “critical” to the success of the project. He intends to be directly engaged in on-site operations, stating he will “walk the line personally” to accelerate production progress.
Samsung’s filing reveals the contract is valued at around KRW 22.76 trillion (approximately USD 16.54 billion) with no advance payment required. The deal accounts for about 7.6% of Samsung’s 2024 revenue, underscoring its significance in reviving Samsung’s foundry business, which has faced challenges with lower order volumes and unused capacity.
This partnership not only arrives as a major boost for Samsung’s Texas fab, slated to begin operations in the second half of 2026, but also aligns with strengthened industrial ties between South Korea and the United States amid ongoing trade considerations. Samsung’s shares jumped over 3.5% in Seoul following the announcement, reflecting investor confidence.
Overall, the Samsung-Tesla collaboration marks a crucial milestone for both companies: Tesla gains a dedicated U.S.-based production line for its cutting-edge AI chips designed for autonomous driving and robotics, while Samsung reinforces its position in the competitive semiconductor foundry market.
Further updates on the AI6 chip production timeline and Texas fab progress are anticipated in the coming months.