Latest news with #AI4
Time of India
8 hours ago
- Automotive
- Time of India
Tesla signs $16.5 billion chip supply deal with Samsung
Tesla has signed a $16.5 billion agreement with Samsung Electronics to source chips, a move that could support the South Korean firm's contract chip manufacturing unit, which has been under financial pressure, reported Reuters. The deal comes as Samsung, the world's largest memory chipmaker, seeks to increase its share in the foundry market where it trails rivals such as Taiwan's TSMC and South Korea's SK Hynix. According to Samsung, the agreement will run through the end of 2033, although it initially withheld the client's name citing confidentiality. Reuters, citing three sources familiar with the matter, confirmed Tesla as the customer. Manufacturing in Texas Tesla CEO Elon Musk said that Samsung's new semiconductor facility in Taylor, Texas, will manufacture Tesla's next-generation AI6 chips. 'Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency,' Musk said in a post on X. '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,' he added. Musk also noted that the $16.5 billion figure was a minimum estimate and that actual output could be significantly higher. Samsung's Taylor facility had faced delays and lacked major clients, leading to a postponement of ASML chipmaking equipment deliveries, according to a Reuters report from October. The start of production at the plant has been deferred to 2026. Ryu Young-ho, a senior analyst at NH Investment & Securities, said the order was significant for the Taylor fab, which had "virtually no customers," although it may represent a relatively small portion of Samsung's overall logic chip revenue annually. Strategic implications While a timeline for AI6 chip production was not disclosed, Musk had earlier said AI5 chips would be produced by the end of 2026, suggesting AI6 might follow in 2027 or 2028. Tesla's current AI4 chips, which power its Full Self-Driving system, are produced by Samsung, while TSMC is expected to produce the AI5 chip. The deal also highlights Tesla's shifting supplier strategy and its involvement in chip design and production efficiency. Samsung's foundry business, which manufactures logic chips for clients, currently holds just 8% of the global market compared to TSMC's 67%, according to Trendforce data. Pak Yuak, an analyst at Kiwoom Securities, estimated that Samsung's foundry losses exceeded 5 trillion won (approximately $3.6 billion) in the first half of the year. The Tesla deal is expected to reduce some of these losses. It is not yet clear whether the agreement is linked to ongoing trade discussions between South Korea and the United States. A South Korean trade ministry official told Reuters he was not aware of the deal being part of any negotiations.
Kuwait Times
15 hours ago
- Automotive
- Kuwait Times
Tesla signs $16.5bn chip supply deal with Samsung
SEOUL: Tesla CEO Elon Musk said the US 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. Samsung shares soared nearly 7 percent after news of the deal on Monday which comes as the world's top memory chip maker faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix. 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. Shares of Samsung jumped 6.8 percent to their highest since September last year, while Tesla shares were up 1.9 percent in US pre-market trading. 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,' although the deal may represent a small portion of its logic chip revenue annually. 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. 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 US partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or reduce potential 25 percent US tariffs. A South Korean trade ministry official told Reuters he had not heard that the specific deal was part of the trade negotiations. While no timeline was provided for AI6 chip production, Musk has previously said that next-generation AI5 chips will be produced at the end of 2026, suggesting AI6 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 AI4 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. It holds just 8 percent of the global foundry market, far behind industry leader TSMC, which has a 67 percent 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 profit and share price. Earlier this month, Samsung projected a 56 percent drop in second-quarter operating profit, partly due to widening losses of its foundry business. 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. - Reuters
Los Angeles Times
21 hours ago
- Automotive
- Los Angeles Times
Samsung to make Tesla AI chips in multiyear Texas deal
Samsung Electronics Co. will produce AI semiconductors for Tesla Inc. in a new $16.5 billion pact that marks a win for its underperforming foundry division. South Korea's largest company announced on Monday that it secured the 22.8 trillion won chipmaking agreement, which will run through the end of 2033. The plan is for an upcoming plant in Taylor, Texas, to produce Tesla's next-generation AI6 chip, Tesla chief Elon Musk said on X, confirming a Bloomberg News report. Samsung's Seoul-traded shares rose 6.8% to their highest since September, while its suppliers like Soulbrain Co. jumped 16%. A Samsung spokesperson declined to comment, citing confidentiality terms in its contract. 'The strategic importance of this is hard to overstate,' Musk, 54, wrote on X. He described the value of the deal announced by Samsung as 'just the bare minimum. Actual output is likely to be several times higher.' The Tesla chief executive officer and X owner will walk the chip fabrication line himself and has been authorized by Samsung to assist in optimizing production, he said. The AI6 component will form the foundation of Tesla's driving hardware suite for cars in coming years. Samsung produces the current AI4 system, according to Musk. The contract win, the first after Executive Chairman Jay Y. Lee was cleared of all outstanding legal charges, comes as Samsung has been steadily losing ground in chip manufacturing. The company, which makes its own memory chips and also fabricates semiconductors on behalf of clients, has had difficulty bringing in enough orders to fully utilize its foundry capacity. It has postponed completion of construction and operational ramp-up of its new Texas fab to 2026. 'Their foundry business has been loss-making and struggling with under-utilization, so this will help a lot,' said Vey-Sern Ling, managing director at Union Bancaire Privee in Singapore. 'Tesla's business may also help them to attract other customers.' That's in contrast to leading chipmaker Taiwan Semiconductor Manufacturing Co., which still cannot meet all demand. TSMC held a dominant share of 67.6% of the global foundry market in the first quarter this year, according to Taipei-based TrendForce. Samsung's share slipped to 7.7% from 8.1% in the previous quarter. Samsung and TSMC are both on pace to deliver the next generation of semiconductor advancement — moving to 2-nanometer fabrication — and the new deal is seen as a signal of confidence for the company's upcoming fabrication technology. While the contract may represent a small share of foundry revenue annually, it holds greater value as a catalyst for technological refinement and innovation over the long run, according to Ryu Young-ho, an analyst at NH Investment & Securities Co. It also helps burnish Samsung's reputation as the strongest TSMC alternative at a time when Intel Corp. is struggling to win over investors skeptical about its long-term strategy and road map. At Tesla, Musk has said the company's future will depend on delivering the long-elusive goal of true self-driving technology. Last week, after a disappointing earnings report, he said the automaker will face 'a few rough quarters' until it can deliver autonomous vehicles at scale — which he predicted for the second half of 2026 or by the end of the year. Yet there is still skepticism about that target. Musk's X posts following the Samsung deal imply that Tesla will adopt two different next-generation chips in short order that are crucial to its automated-driving systems. He wrote that the carmaker will go from currently sourcing AI4 chips from Samsung, to using AI5 chips from TSMC that have just been designed, to then using AI6 chips from Samsung. The rapid-fire changes risk opening Tesla up to more blowback from car owners who were told back in 2016 that all the vehicles the company was making from then on had the hardware necessary to eventually drive autonomously. In early 2023, Musk said on an earnings call that Tesla was going to stop offering retrofits to customers whose cars were equipped with older-generation chips, citing the cost and difficulty of offering upgrades. Tesla has made some progress in recent months toward competing with Alphabet Inc.'s Waymo by starting to offer a driverless taxi service in Austin. But the carmaker has yet to offer rides without any safety staff in its vehicles, and early users posted videos of the robotaxis appearing to violate traffic laws. The suite of features Tesla markets as Full Self-Driving still requires customers to supervise the system at all times. Lee and Kang write for Bloomberg.
Gulf Today
a day ago
- Automotive
- Gulf Today
Musk's Tesla signs $16.5 billion chip supply deal with Samsung
Tesla CEO Elon Musk said the US 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. Samsung shares soared nearly 7 per cent after news of the deal on Monday which comes as the world's top memory chip maker faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix. Musk said Samsung's new chip factory in Taylor, Texas will make Tesla's next-generation AI6 chip, potentially re-energising 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 maximising 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. Shares of Samsung jumped 6.8 per cent to their highest since September last year, while Tesla shares were up 1.9 per cent in US pre-market trading. 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,' although the deal may represent a small portion of its logic chip revenue annually. 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. 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 US partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or reduce potential 25 per cent US tariffs. A South Korean trade ministry official told Reuters he had not heard that the specific deal was part of the trade negotiations. While no timeline was provided for AI6 chip production, Musk has previously said that next-generation AI5 chips will be produced at the end of 2026, suggesting AI6 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 AI4 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. It holds just 8 per cent of the global foundry market, far behind industry leader TSMC, which has a 67 per cent 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. 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 profit and share price. Earlier this month, Samsung projected a 56 per cent drop in second-quarter operating profit, partly due to widening losses of its foundry business. 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. Reuters
CNN
a day ago
- Automotive
- CNN
Elon Musk says Tesla and Samsung have signed a $16.5 billion chip 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. Samsung's shares jumped as much as 6.8% to their highest since September last year after news of the deal. Tesla shares were up 1.9% in U.S. premarket trading. 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. While no timeline was provided for AI6 chip production, Musk has previously said that next-generation AI5 chips will be produced at the end of 2026, suggesting AI6 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 AI4 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. It 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. 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 profit and share price. Earlier this month, Samsung projected a 56% drop in second-quarter operating profit, partly due to widening losses of its foundry business. 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.
