Latest news with #AI5
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
NBC News
19 hours ago
- Automotive
- NBC News
Elon Musk confirms Tesla has signed a $16.5 billion chip contract with Samsung Electronics
Samsung Electronics has entered into a $16.5 billion contract for supplying semiconductors to Tesla, based on a regulatory filing by the South Korean firm and Tesla CEO Elon Musk 's posts on X. The memory chipmaker, which had not named the counterparty, mentioned in its filing that the effective start date of the contract was July 26, 2025 — receipt of orders — and its end date was Dec. 31, 2033. However, Musk later confirmed in a reply to a post on social media platform X that Tesla was the counterparty. He also posted: '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. Samsung currently makes will make AI5, which just finished design, initially in Taiwan and then Arizona.' '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 on X, and suggested that the deal with Samsung could likely be even larger than the announced $16.5 billion. Samsung earlier said that details of the deal, including the name of the counterparty, will not be disclosed until the end of 2033, citing a request from the second party 'to protect trade secrets,' according to a Google translation of the filing in Korean on Monday. 'Since the main contents of the contract have not been disclosed due to the need to maintain business confidentiality, investors are advised to invest carefully considering the possibility of changes or termination of the contract,' the company said. The company's shares rose over 6% in trading on Monday to reach their highest level since September 2024. Tesla was a probable customer, Ray Wang, research director of semiconductors, supply chain and emerging technology at The Futurum Group, told CNBC before Musk's post. Bloomberg News had earlier reported that Samsung's deal was with Tesla, citing a source. Samsung's foundry service manufactures chips based on designs provided by other companies. It is the second largest provider of foundry services globally, behind Taiwan Semiconductor Manufacturing Company. The company stated in April that it aimed to commence 2 nanometer mass production in its foundry business and secure major orders for the next-generation technology. In semiconductor technology, smaller nanometer sizes signify more compact transistor designs, which lead to greater processing power and efficiency. Local South Korean media outlets have also reported that American chip firm Qualcomm could place an order for chips manufactured using Samsung's 2 nanometer technology. Samsung, which is set to deliver earnings on Thursday, expects its second-quarter profit to more than halve. An analyst previously told CNBC that the disappointing forecast was due to weak orders for its foundry business and as the company has struggled to capture AI demand for its memory business. The company has fallen behind competitors SK Hynix and Micron in high-bandwidth memory chips — an advanced type of memory used in AI chipsets. SK Hynix, the leader in HBM, has become the main supplier of these chips to American AI behemoth Nvidia. While Samsung has reportedly local outlet suggests these plans have been pushed back to at least September.
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
UPI
a day ago
- Automotive
- UPI
Elon Musk says Telsa, Samsung signed $16.5 billion chip deal
July 28 (UPI) -- Elon Musk announced Telsa signed a deal for $16.5 billion to obtain semiconductor chips from Samsung. Musk on Sunday confirmed that Tesla had entered the deal with Samsung after the latter announced a supply agreement, but did not disclose the company it was working with. On Saturday, Samsung announced a supply agreement, but it didn't name the company with which it was collaborating. Musk confirmed that it was Tesla on Sunday. "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. Samsung currently makes will make AI5, which just finished design, initially in Taiwan and then Arizona," Musk said. "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 on X. In the filling for the contract, the effective start date was on July 26, 2025, and it ends Dec. 31, 2033. Samsung initially said that the name of the company in collaboration will not be disclosed until the end of 2033, "to protect trade secrets".
