Latest news with #A15

Miami Herald
2 hours ago
- Automotive
- Miami Herald
Tesla deal could help boost Samsung's foundry business
SEOUL, July 30 (UPI) -- South Korea's Samsung Electronics announced it has signed a $16.5 billion, eight-year contract to supply semiconductors to an unnamed global company, noting full details will be disclosed on Jan. 3, 2033. Just hours later on Tuesday, however, Tesla CEO Elon Musk confirmed that Tesla was the buyer and Samsung's new Texas factory, which is being built, will produce next-generation AI processor A16 chips for Tesla. Samsung, which rolls out A14 chips, lost out on the A15 chip deal to archrival TSMC, but managed to succeed in A16 chips. Samsung's Texas foundry is a flagship project in its plan to invest more than $37 billion in the United States by 2030. "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," Musk said in a post on X. The announcement prompted investors to snap up Samsung shares, and its stock price has jumped more than 11% on the Seoul bourse. The world's largest memory chipmaker has underperformed in the stock market due to challenges in the advanced high-bandwidth memory business. On a brighter note for Samsung's troubled foundry business, Musk said that $16.5 billion is just the "bare minimum," and actual output is likely to be "several times higher." Musk's comments fueled speculation that Samsung could win additional Tesla orders, such as the Dojo 2 chips, which are designed to train deep neural networks used in self-driving. "Musk's remarks suggest that orders may expand to include Dojo 2 chips, as well," NH Investment & Securities analyst Ryu Young-ho said in a market report. Observers believe that the mega-sized contract will anyhow help Samsung's foundry business turn around in terms of profitability and market share in a competition with the runaway leader TSMC of Taiwan. According to Taipei-based business tracker TrendForce, TSMC's first-quarter market share stood at 67.6% in the global foundry business while that of Samsung Electronics was 7.7%. Against this backdrop, Samsung's foundry business has suffered billions of dollars in annual losses over the past few years. Samsung's contract with Tesla is also expected to affect the rivalry of leading foundry companies to master next-generation 2-nanometer-based technology. TSMC's yield rate in 2-nm process is reportedly about 70% compared to less than 60% of Samsung. Yield rate, in semiconductor manufacturing, refers to the percentage of usable, defect-free chips produced from a single wafer. "Thus far, Samsung has struggled to raise its yield rate in the 2-nm semiconductors to fall behind TSMC," SungKyunKwan University semiconductor professor Choi Byoung-deog told UPI. "The contract with Tesla demonstrates that Samsung's 2-nm yield has substantially improved. If Samsung secures more deals with such big-tech companies as Qualcomm and Apple, it will be able to start catching up with TSMC," he said. Korea Advanced Institute of Science and Technology professor Kim Joung-ho agreed. "Samsung should prove its efficiency and high yields with Tesla. Then, other major high-tech companies will show more interest in its foundry business," Kim said in an interview. When it comes to the share price of Samsung Electronics, experts claim that the company needs to make a breakthrough in the lucrative HBM business, which is dominated by Samsung's local rival, SK hynix. "If Samsung Electronics manages to supply cutting-edge HBMs to Nvidia, its share price would instantly surge," economic commentator Kim Kyeong-joon, formerly vice chairman at Deloitte Consulting Korea, said in a phone interview. "The three-way alliance involving Nvidia, SK hynix and TSMC is quite strong. But Nvidia may want to diversify its HBM suppliers, offering Samsung a potential opportunity. Samsung should find ways to satisfy Nvidia," he said. The Tesla order came shortly after Samsung Electronics Chairman Lee Jae-yong was cleared of criminal charges of accounting fraud and stock manipulation related to a merger between two Samsung units in 2015. Earlier this month, the country's Supreme Court acquitted Lee, putting an end to his prolonged legal battles. Copyright 2025 UPI News Corporation. All Rights Reserved.


UPI
2 hours ago
- Automotive
- UPI
Tesla deal could help boost Samsung's foundry business
Samsung Electronics headquarters in South Korea. The company has signed a $16.5 billion contract to supply semiconductors to Tesla, according to the auto company's Elon Musk. Photo courtesy of Samsung Electronics SEOUL, July 30 (UPI) -- South Korea's Samsung Electronics announced it has signed a $16.5 billion, eight-year contract to supply semiconductors to an unnamed global company, noting full details will be disclosed on Jan. 3, 2033. Just hours later on Tuesday, however, Tesla CEO Elon Musk confirmed that Tesla was the buyer and Samsung's new Texas factory, which is being built, will produce next-generation AI processor A16 chips for Tesla. Samsung, which rolls out A14 chips, lost out on the A15 chip deal to archrival TSMC, but managed to succeed in A16 chips. Samsung's Texas foundry is a flagship project in its plan to invest more than $37 billion in the United States by 2030. "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," Musk said in a post on X. The announcement prompted investors to snap up Samsung shares, and its stock price has jumped more than 11% on the Seoul bourse. The world's largest memory chipmaker has underperformed in the stock market due to challenges in the advanced high-bandwidth memory business. On a brighter note for Samsung's troubled foundry business, Musk said that $16.5 billion is just the "bare minimum," and actual output is likely to be "several times higher." Musk's comments fueled speculation that Samsung could win additional Tesla orders, such as the Dojo 2 chips, which are designed to train deep neural networks used in self-driving. "Musk's remarks suggest that orders may expand to include Dojo 2 chips, as well," NH Investment & Securities analyst Ryu Young-ho said in a market report. Observers believe that the mega-sized contract will anyhow help Samsung's foundry business turn around in terms of profitability and market share in a competition with the runaway leader TSMC of Taiwan. According to Taipei-based business tracker TrendForce, TSMC's first-quarter market share stood at 67.6% in the global foundry business while that of Samsung Electronics was 7.7%. Against this backdrop, Samsung's foundry business has suffered billions of dollars in annual losses over the past few years. Samsung's contract with Tesla is also expected to affect the rivalry of leading foundry companies to master next-generation 2-nanometer-based technology. TSMC's yield rate in 2-nm process is reportedly about 70% compared to less than 60% of Samsung. Yield rate, in semiconductor manufacturing, refers to the percentage of usable, defect-free chips produced from a single wafer. "Thus far, Samsung has struggled to raise its yield rate in the 2-nm semiconductors to fall behind TSMC," SungKyunKwan University semiconductor professor Choi Byoung-deog told UPI. "The contract with Tesla demonstrates that Samsung's 2-nm yield has substantially improved. If Samsung secures more deals with such big-tech companies as Qualcomm and Apple, it will be able to start catching up with TSMC," he said. Korea Advanced Institute of Science and Technology professor Kim Joung-ho agreed. "Samsung should prove its efficiency and high yields with Tesla. Then, other major high-tech companies will show more interest in its foundry business," Kim said in an interview. When it comes to the share price of Samsung Electronics, experts claim that the company needs to make a breakthrough in the lucrative HBM business, which is dominated by Samsung's local rival, SK hynix. "If Samsung Electronics manages to supply cutting-edge HBMs to Nvidia, its share price would instantly surge," economic commentator Kim Kyeong-joon, formerly vice chairman at Deloitte Consulting Korea, said in a phone interview. "The three-way alliance involving Nvidia, SK hynix and TSMC is quite strong. But Nvidia may want to diversify its HBM suppliers, offering Samsung a potential opportunity. Samsung should find ways to satisfy Nvidia," he said. The Tesla order came shortly after Samsung Electronics Chairman Lee Jae-yong was cleared of criminal charges of accounting fraud and stock manipulation related to a merger between two Samsung units in 2015. Earlier this month, the country's Supreme Court acquitted Lee, putting an end to his prolonged legal battles.


Qatar Tribune
2 days ago
- Automotive
- Qatar Tribune
Tesla signs $16.5B next-gen chip supply deal with Samsung: Musk
Agencies Tesla has signed a $16.5 billion deal with Samsung to source next-generation AI6 chips, CEO Elon Musk said on Monday, a move expected to bolster the South Korean tech giant's loss-making contract manufacturing business. Samsung shares rose more than 6% 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 his social media platform X. 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,' he added, calling it a 'critical point' in striking the deal. 'I will walk the line personally to accelerate the pace of progress,' he said, noting Samsung's Texas plant was 'conveniently located not far from my house.' While no timeline was provided for AI6 chip production, Musk has previously said that next-generation A15 chips will be produced at the end of 2026, suggesting A16 would follow. Samsung currently makes Tesla's A14 chips, which power its Full Self-Driving driver assistant system, while TSMC will make the AI5 initially in Taiwan and then Arizona, Musk has said. Texas project In October, Samsung had postponed taking deliveries of ASML chipmaking equipment for its factory in Texas as it had not yet won any major customers for the project, Reuters reported. It has already delayed the plant's operational start to 2026. Samsung, the world's top memory chip maker, also produces logic chips designed by customers through its foundry business. The Texas project is central to Samsung Chairman Jay Y. Lee's strategy to expand beyond its bread-and-butter memory chips into contract chip manufacturing. Samsung currently trails a distant second in the global foundry market, with an 8% share versus leader TSMC's 67% share, data from market researcher Trendforce show. 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. The deal represents about 7.6% of Samsung's projected annual sales for 2024, the company said. The news comes as Samsung, which is due to report its earnings on Thursday, 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. Pak Yuak, an analyst at Kiwoom Securities, said the deal would help reduce losses at Samsung's foundry business, which he estimated exceeded 5 trillion won ($3.6 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. It is not clear whether the Samsung-Tesla deal is related to ongoing trade talks between Korea and the United States. Seoul is seeking U.S. partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or reduce potential 25% U.S. tariffs. 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. Samsung Electronics is the flagship unit of South Korea's Samsung Group, by far the largest of the family-run conglomerates that dominate Asia's fourth-largest economy.

Engadget
2 days ago
- Automotive
- Engadget
Samsung wins $16.5 billion deal to make Tesla's A16 chips
Samsung will make Tesla's A16 chip in a deal worth 22.8 trillion won ($16.5 billion). The chip manufacturer had filed a regulatory contract with an unnamed entity, but Elon Musk announced Tesla as the other party on X (formerly Twitter). The deal will run through 2033 and utilize an upcoming plant in Taylor, Texas. Musk stated, "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." This agreement marks a significant turnaround for Samsung, which, earlier this month, pushed back opening the Texas factory until 2026 due to a lack of customers. Samsung currently produces the A14 chips that power Tesla's Full Self-Driving platform. However, the A15 contract went to one of its biggest competitors, Taiwan Semiconductor Manufacturing Company (TSMC). According to Musk, that design has just been completed. The new deal doesn't come without strings — namely a lot of Musk breathing over the manufacturer's shoulder. "Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency," Musk stated in a subsequent X post. "This is a critical point, as I will walk the line personally to accelerate the pace of progress." He went so far as to point out that the fabrication facility isn't far from his Austin, Texas home. If you buy something through a link in this article, we may earn commission.

Hindustan Times
2 days ago
- Automotive
- Hindustan Times
Elon Musk says Tesla, Samsung sign $16.5 billion chip supply deal
Tesla CEO Elon Musk said the U.S. automaker had signed a $16.5 billion deal to source chips from Samsung Electronics, a move expected to bolster the South Korean tech giant's loss-making contract manufacturing business. Elon Musk, Chief Executive Officer of SpaceX and Tesla and owner of Twitter, gestures as he attends the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition centre in Paris, France, June 16, 2023.(Reuters) Samsung's shares jumped as much as 6.8% to their highest since September last year after news of the deal. Musk said Samsung's new chip factory in Taylor, Texas will make Tesla's next-generation AI6 chip, potentially re-energizing the project that has faced long delays amid Samsung's difficulties in retaining and attracting major clients. "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 in a post on X on Monday. "The $16.5B number is just the bare minimum. Actual output is likely to be several times higher," he said in another post. According to a senior analyst at NH Investment & Securities, Ryu Young-ho, Samsung's Taylor fab "so far had virtually no customers, so this order is quite meaningful". In October, Reuters reported that Samsung had postponed taking deliveries of ASML chipmaking equipment for its Texas factory as it had not yet won any major customers for the project. It has already delayed the plant's operational start to 2026. POTENTIAL PRODUCTION TIMELINE While no timeline was provided for AI6 chip production, Musk has previously said that next-generation A15 chips will be produced at the end of 2026, suggesting A16 would follow. Lee Dong-ju, an analyst at SK Securities, expects production in 2027 or 2028, but Tesla has a history of missing its targets. Samsung currently makes Tesla's A14 chips, which power its Full Self-Driving driver assistant system, while TSMC is slated to make the AI5, initially in Taiwan and then Arizona, Musk has said. Samsung, the world's top memory chip maker, also produces logic chips designed by customers through its foundry business. The Texas project is central to Samsung Chairman Jay Y. Lee's strategy to expand beyond its bread-and-butter memory chips into contract chip manufacturing. Samsung currently holds just 8% of the global foundry market, far behind industry leader TSMC, which has a 67% share, data from market researcher Trendforce show. 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. HELP SAMSUNG'S FOUNDRY BUSINESS The deal with Tesla comes as Samsung, which is due to report its earnings on Thursday, 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. Pak Yuak, an analyst at Kiwoom Securities, said the deal would help reduce losses at Samsung's foundry business, which he estimates exceeded 5 trillion won ($3.6 billion) in the first half of the year. Analysts say Samsung has struggled to retain key clients, with many defecting to TSMC for advanced chips, underscoring technological challenges the firm faces in the race to stay relevant in the capital intensive business. TSMC counts Apple, Nvidia and Qualcomm among its customers. It is not clear whether the Samsung-Tesla deal is related to ongoing trade talks between South Korea and the United States. Seoul is seeking U.S. partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or reduce potential 25% U.S. tariffs.