Tesla Inc chief executive officer Elon Musk yesterday said that Samsung Electronics Co would provide his company with its next-generation AI6 chips, following the South Korean firm’s announcement of a US$16.5 billion deal.
Samsung said in a regulatory filing yesterday that it had secured an eight-year agreement, without naming the client, describing it only as a “major global company.”
Under the deal, the partnership — effective from Thursday last week — runs through the end of 2033.
Photo: EPA
“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 wrote on X.
“Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency,” he added, calling it a “critical point” in striking the deal.
“I will walk the line personally to accelerate the pace of progress,” he said, citing how Samsung’s Texas plant was “conveniently located not far from my house.”
The deal represents about 7.6 percent of Samsung’s annual sales for last year, the company said.
The agreement is expected to provide a major boost to Samsung, which has faced headwinds in its foundry business, lagging rivals SK Hynix Inc and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in the race for cutting-edge artificial intelligence chips.
Samsung earlier this month said that it expected operating profit to fall 56 percent year-on-year and 31 percent from the previous quarter, citing a slump in its core semiconductor division.
Experts have attributed the decline to weaknesses in its foundry operations, which involve contract-based manufacturing of chips designed by other companies.
TSMC held a dominant share of 67.6 percent of the global foundry market in the first quarter this year, up from 67.1 percent in the previous quarter, Taipei-based researcher TrendForce Corp (集邦科技) reported last month.
Samsung’s share slipped to 7.7 percent from 8.1 percent in the previous quarter.
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