Musk Says Tesla, Samsung Electronics Sign $16.5 Billion Chip Supply Deal
Samsung shares rose more than 4% after the news.
"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 said in a post on X on Monday.
If Musk was referring to Samsung's upcoming Taylor, Texas, plant, the deal could revive the project that has faced delays amid Samsung's struggles to retain and win major customers.
"Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house," Musk said on his social media platform.
Samsung had earlier announced the $16.5 billion chip supply deal without naming the client, saying the customer had requested confidentiality about the details of the deal, which will run through the end of 2033.
Three sources briefed about the matter told Reuters that Tesla was the customer for the deal.
The deal comes as Samsung faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix. This lag has weighed heavily on its profits and share price.
Samsung, the world's top memory chip maker, also makes logic chips designed by customers through its foundry business.
Pak Yuak, an analyst at Kiwoom Securities, said the latest deal would help reduce losses at Samsung's foundry business, which he estimated exceeded 5 trillion won ($3.63 billion) in the first half of the year.
Analysts say Samsung has struggled with the defection of key clients to TSMC for advanced chips. TSMC counts Apple, Nvidia and Qualcomm among its customers.
The Samsung-Tesla deal may also be significant for South Korea, which is seeking US partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or reduce potential 25% US tariffs.
Samsung is grappling to boost production yields of its latest 2-nanometer technology, but the order is unlikely to involve the cutting-edge tech, said Lee Min-hee, an analyst at BNK Investment & Securities.
Samsung has been losing market share to TSMC in contract manufacturing, underscoring technological challenges the firm faces in mastering advanced chip manufacturing to attract clients like Apple and Nvidia, analysts said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Al Arabiya
an hour ago
- Al Arabiya
Trump order lowering tariffs on EU autos still days away, source says
The European Union will likely have to wait a few more days for an executive order by US President Donald Trump lowering tariffs on imports of European cars and car parts, a source familiar with the EU-US negotiations said. It means US consumers will continue to see tariffs of 27.5 percent applied to the imports of cars including German-made BMW and Mercedes-Benz vehicles and Swedish-made Volvos, the source said, rather than the 15 percent rate Trump and European Commission President Ursula von der Leyen agreed in Scotland. The rate will only come down once Trump issues a legally binding executive order. White House officials did not immediately respond to a request for comment. Trump on July 31 issued an executive order setting the EU's baseline tariff at 15 percent, but the order did not cover goods facing so-called Section 232 investigations, including autos, pharmaceuticals, semiconductors, wine and spirits and steel and aluminum. The baseline tariff comes into effect on August 7 at 12:01 a.m. EDT (0401 GMT) with an exemption for goods already in transit or warehoused until Oct. 5. The EU-US framework trade agreement will be implemented in stages through White House executive orders followed by a legally non-binding joint statement, which a senior EU official on Tuesday said was at an 'advanced' stage. Under the terms of the agreement, a 15 percent levy will be applied to EU pharmaceuticals and semiconductors, US officials say. EU officials say 15 percent is a ceiling and that the rate could be lower pending the outcome of the Section 232 investigations. EU and US officials are still negotiating a final list of products that would have either a zero-for-zero duty or a significantly lower most-favored nation rate. The EU wants low or zero rates on spirits, wines, some chemicals and medical devices.
Arab News
2 hours ago
- Arab News
Trump imposes additional 25 percent tariff on Indian goods, relations hit new low
US President Donald Trump on Wednesday issued an executive order imposing an additional 25 percent tariff on Indian goods citing New Delhi's continued imports of Russian oil, sharply escalating tensions between the two countries after trade talks collapsed. The new measure raises tariffs on some Indian goods to as high as 50 percent — among the steepest faced by any US trading partner. The move is expected to hit key Indian export sectors including textiles, footwear, and gems and jewelery and marks the most serious downturn in US-India relations since Trump returned to office in January. It also comes as Indian Prime Minister Narendra Modi prepares for his first visit to China in over seven years, suggesting a potential realignment in alliances as ties with Washington fray. 'India will take all actions necessary to protect its national interests,' India's external affairs ministry said in a statement, saying it was 'extremely unfortunate that the US should choose to impose additional tariffs on India for actions that several other countries are also taking in their own national interest.' It said India's imports were based on market factors and aimed at energy security for its population of 1.4 billion. Trade analysts warned the tariffs could severely disrupt Indian exports. The additional 25 percent tariff comes into effect 21 days after August 7, the order said. 'With such obnoxious tariff rates, trade between the two nations would be practically dead,' said Madhavi Arora, economist at Emkay Global. Indian officials have privately acknowledged growing pressure to return to the negotiating table. A potential compromise could involve a phased reduction in Russian oil imports and diversification of energy sources. A senior Indian official said New Delhi was blindsided by the sudden imposition of the new levy and the steep rate, as both countries continue to discuss trade issues. Trump's decision follows five rounds of inconclusive trade negotiations, which stalled over US demands for greater access to Indian agriculture and dairy markets. India's refusal to curb Russian oil purchases — which surged to a record $52 billion last year — ultimately triggered the tariff escalation. 'Exports to the US become unviable at this rate. Clearly, risks to growth and exports are rising, and the rupee may face renewed pressure,' said Garima Kapoor, economist at Elara Securities. 'Calls for fiscal support are likely to intensify.' Trump's executive order does not mention China, which also buys Russian oil. A White House official had no immediate comment on whether an additional order covering those purchases would be forthcoming. US Treasury Secretary Scott Bessent last week said he warned Chinese officials that continued purchases of sanctioned Russian oil would lead to big tariffs due to legislation in Congress, but was told that Beijing would protect its energy sovereignty. The US and China have been engaged in discussions about trade and tariffs, with an eye to extending a 90-day tariff truce that is due to expire on August 12, when their bilateral tariffs shoot back up to triple-digit figures.
ArabGT
3 hours ago
- ArabGT
Chevrolet Captiva Launches in All-Electric and Hybrid Variants
Chevrolet Captiva continues to evolve as a versatile and family-friendly SUV, now welcoming two advanced additions to its lineup: the all-electric Chevrolet Captiva EV and the plug-in hybrid Chevrolet Captiva PHEV. These new models broaden the appeal of Captiva, giving customers the choice between traditional gasoline power and electrified mobility—all while maintaining the comfort, practicality, and reliability the nameplate is known for. Chevrolet Captiva Gasoline Model: Practical and Spacious The base Chevrolet Captiva is a seven-seater SUV powered by a 1.5-liter turbocharged gasoline engine producing 149 horsepower. It's offered in a variety of trims, including LS, LT, Premier, and Midnight Edition, making it a flexible option for families looking for space, performance, and value. Chevrolet Captiva EV: 100% Electric Innovation For drivers ready to fully embrace electric driving, the Chevrolet Captiva EV offers a zero-emission solution with a modern edge. Equipped with a 60 kWh lithium-ion battery, it delivers up to 415 km of driving range (NEDC) and 201 hp. Charging is efficient and flexible, with Level 1 (2.1 kW), Level 2 (6.6 kW), and DC fast charging available. The DC option allows for 80% battery charge in under 45 minutes, or 75 km of range in just 10 minutes. Standard features for the Captiva EV include a Level 1 portable charging cable, a 7 kW wall box for home installation, and a Type 2 to Type 2 cable, making daily electric driving simple and worry-free. Chevrolet Captiva PHEV: Hybrid Versatility with Extended Range The Chevrolet Captiva PHEV is ideal for those not yet ready to go fully electric. Combining a 1.5-liter gasoline engine with a 20.5 kWh battery, this version produces 201 hp and can travel up to 1,000 km on a single charge and fuel tank (NEDC). It offers three propulsion modes—EV, HEV, and EV MAX—and four drive settings: ECO, ECO+, Standard, and Sport, enabling drivers to adapt the Captiva PHEV to their road conditions and preferences. Charging options include Level 1 (2.1 kW), Level 2 (3.3 kW), and DC fast charging up to 24 kW. A Level 1 portable charger comes standard, ensuring you're always ready to plug in. Refreshed Design and Functional Interior Both the Chevrolet Captiva EV and PHEV showcase a refreshed, wider and longer body design that blends elegance with contemporary appeal. Inside, the cabin offers five seats upholstered in high-quality synthetic leather (black or beige), a sleek wood-effect dashboard, and up to 532 liters of cargo capacity. Buyers can choose between LT and Premier trims, with exterior color options including Galaxy White, Laser Grey, Shadow Golden, Dawn Blue, Khaki Green, and Red Metallic. A two-tone roof option exclusive to the Captiva EV adds an extra layer of personalization and style. Smart Features and Advanced Safety Across the Range Technology is at the core of the new Chevrolet Captiva lineup. The LT trim offers a 10.1-inch infotainment display and an 8.8-inch driver information screen, while the Premier trim upgrades to a 15.6-inch central display, panoramic sunroof, power liftgate, and a 360-degree camera system. Safety is a major focus, with available features including adaptive cruise control, automatic emergency braking, forward collision alert, lane departure warning, and intelligent driver assistance systems. All models also support Apple CarPlay, Android Auto, smart keyless entry, and come equipped with four airbags and power-folding side mirrors. Tested for the Region, Supported for the Long Term Every Chevrolet Captiva, whether gasoline-powered, hybrid, or electric, is rigorously tested for performance and reliability in demanding regional climates and road conditions. Customers benefit from Chevrolet Complete Care—a comprehensive aftersales support program that includes a 3-year/100,000 km vehicle warranty. For EV and PHEV owners, an extended 8-year/160,000 km battery warranty adds further peace of mind. Chevrolet invites customers to experience the full Chevrolet Captiva range by visiting the official website or heading to a nearby dealership, where they can explore and compare the different models to find the one that best fits their needs.
