Samsung Electronics will supply chips to Tesla in a deal worth $16.5 billion, the companies confirmed on Monday.
The chips will be produced at Samsung’s new factory in Taylor, Texas, and will be used in Tesla’s next-generation AI6 chip.
Tesla CEO Elon Musk said Samsung has agreed to let Tesla help improve manufacturing efficiency at the plant, adding that he will personally visit the facility to speed up progress. Musk noted the deal value is a minimum estimate and that actual production could be much higher.
The deal is expected to boost Samsung’s contract chipmaking business, which has been facing losses and struggling to attract clients. The Taylor plant, initially delayed until 2026, had no major customers until now.
Samsung previously delayed receiving advanced chipmaking tools for the site.
Samsung already makes Tesla’s AI4 chips, while Taiwan’s TSMC is expected to make the AI5 chip. Musk earlier said AI5 production would begin in late 2026, suggesting the AI6 could come later.
Shares of Samsung rose nearly 7% after the announcement. Tesla’s shares also gained in U.S. pre-market trading.
Samsung had disclosed the $16.5 billion deal earlier without naming the customer. The agreement runs through the end of 2033.
The partnership also comes as South Korea seeks closer U.S. trade ties in sectors like chips and shipbuilding. However, officials say this deal is not tied to those discussions.
Samsung’s contract chipmaking division holds 8% of the global foundry market, far behind TSMC’s 67%, according to industry data. The company is trying to grow beyond memory chips as part of a broader business strategy.
