Samsung to Manufacture Tesla’s AI6 Chips in $16.5B Deal, Musk Confirms

• Tesla and Samsung sign $16.5B chip deal for next-gen AI6 chips, to be produced at Samsung’s Texas fab.

• Elon Musk confirms partnership, says Tesla will help optimize production efficiency.

• Samsung shares jump over 6%, as the deal boosts its struggling chip foundry business.

• The contract runs through 2033, and may strengthen U.S.–South Korea industrial ties.

• TSMC to handle AI5 chips, while Samsung currently makes Tesla’s A14 chips for its FSD system.

Tesla CEO Elon Musk announced on Monday that the company has signed a $16.5 billion chip supply deal with Samsung Electronics, a move that could revitalize Samsung’s struggling contract chip manufacturing business. The agreement designates Samsung to produce Tesla’s upcoming AI6 chips, which are expected to power future versions of the automaker’s autonomous driving technology.

The announcement sparked a more than 6% surge in Samsung’s shares, reflecting investor optimism over the landmark agreement.

“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 posted on X.

Production to Take Place in Texas

Musk was referring to Samsung’s semiconductor facility in Taylor, Texas, which has faced delays and difficulty attracting major clients. This deal with Tesla could breathe new life into the project, and further solidify Texas as a key U.S. chip manufacturing hub.

Musk also revealed that Tesla will collaborate closely with Samsung to improve production efficiency, even noting that he plans to personally oversee the manufacturing process on-site.

“Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency… And the fab is conveniently located not far from my house,” he added.

While Tesla did not provide a production timeline for the AI6 chip, Musk has previously stated that the A15 chip will enter production in late 2026, suggesting the AI6 could follow sometime after.

Tesla’s Evolving Chip Strategy: Samsung, TSMC Both Involved

Samsung currently manufactures Tesla’s A14 chips, which are used in its Full Self-Driving (FSD) systems. However, the upcoming AI5 chips will be made by Taiwan Semiconductor Manufacturing Co. (TSMC)—first at its Taiwan facilities, and later at its new plant in Arizona, according to earlier comments from Musk.

The AI6 contract will run through the end of 2033, according to Samsung. While the company initially disclosed the $16.5 billion agreement last week, it did not name Tesla at the time due to confidentiality.

Geopolitical Implications and Industry Context

It remains unclear whether the deal is connected to broader U.S.–South Korea trade discussions, particularly as Seoul seeks to avoid potential 25% tariffs by forging strategic tech and manufacturing partnerships with Washington.

The agreement also comes at a critical time for Samsung’s foundry division, which has been under pressure due to technical setbacks and market share losses to TSMC. The Korean giant has struggled to deliver cutting-edge chips to high-profile clients like Apple and Nvidia, making the Tesla contract a much-needed win.