Samsung to Make AI Chips for Tesla in the United States

Samsung Electronics has secured a contract worth over £15 billion to produce AI chips for Tesla, a car manufacturer. This is a significant victory for the underperforming chip manufacturing arm of the South Korean electronics giant.

Samsung announced Monday that it has signed a 22.8 trillion won agreement, which runs until the end of 2033. The latest chips will not be produced in South Korea, but in the United States itself – Tesla’s home market.

Next AI6 chip
The plan is to build a new factory in Taylor, Texas, where Samsung will produce Tesla’s next-generation AI6 chip, Tesla CEO Elon Musk confirmed at the X event. “The strategic importance of this decision is difficult to overstate,” he added.

Investors in South Korea reacted enthusiastically. Samsung shares rose by up to five percent on the Seoul Stock Exchange, their highest level since September.

Despite more than a year of efforts to close the gap with its South Korean chip rival SK Hynix, Samsung has struggled to supply large volumes of the high-bandwidth memory chips needed for artificial intelligence (AI).

As a result, the group has focused more on the Chinese market. However, this market is now under pressure after Washington imposed restrictions on the sector, preventing US companies from exporting their chips there.