The agreement could help the chip manufacturer boost its performance.
Samsung Electronics and Tesla have finalized a $16.5 billion deal, with the South Korean tech giant agreeing to produce microchips for Elon Musk’s company.
The news was shared on Monday, when Samsung agreed to a 22.8 trillion won deal that is valid until 2033.
According to Elon Musk's recent post on X, the agreement between the two companies is that Samsung will start to produce Tesla’s next-generation AI6 chip in the plant located in Taylor, Texas.
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.
undefined Elon Musk (@elonmusk) July 28, 2025
Samsung currently makes AI4.
TSMC will make AI5, which just finished design, initially in Taiwan and then Arizona.
According to Bloomberg, Musk will oversee the production line and assist in optimizing it.
The agreement comes in handy for Samsung, as the company has been finding it hard to get enough orders to use its foundry's full potential. Due to the downturn, the company has suspended the construction of its new Texas factory until 2026.
It is expected that the new deal will help Samsung gain new customers.
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