Latest news with #AI5
NDTV
2 days ago
- Automotive
- NDTV
Tesla Samsung Seal USD 16.5 Billion Chip Deal For AI6 Production At Texas Plant
Tesla, the US-based electric car maker, has signed a USD 16.5 billion deal with Samsung Electronics to source the AI6 chipset. Elon Musk himself confirmed the deal via X post, stating that Samsung's Texas fabrication plant will be dedicated to producing the chipset. Reports also suggest that, as confirmation of the Tesla-Samsung deal came to the public eye, the share prices of the electronics manufacturer skyrocketed by 6.8 percent, which is the highest that the brand has received since September 2024. Elon Musk shared a thread on X (formerly known as Twitter), stating, "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." Replying to the same post, Musk also confirmed that Samsung will dedicate its Texas fabrication plant to work on manufacturing the AI16 chipset. However, it is not the first time that Samsung has joined hands with Tesla. Currently, Jay Y Lee's electronics manufacturing company is making AI4 chips that help Tesla cars to support driver assistance software, enabling the self-driving mode. 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 AI4. TSMC will make AI5, which just finished design, initially in Taiwan and then Arizona. — Elon Musk (@elonmusk) July 28, 2025 While the AI4 and AI6 chipsets are on Samsung's list, the AI5 chips are manufactured by Taiwan Semiconductor Manufacturing Company. The deal announcement has come at a crucial time and proves to be beneficial for Samsung, as the brand recorded losses in the contract chipmaking trade. However, the AI6 chipset's production timeline has not yet been confirmed by Tesla or Samsung.
ArabGT
2 days ago
- Automotive
- ArabGT
Tesla Partners with Samsung in $16.5 Billion Semiconductor Deal
In a move that could define the next era of autonomous driving, Tesla has signed a game-changing $16.5 billion deal with Samsung Electronics to supply the next generation of semiconductor chips. These aren't just any chips—they're the brains behind Tesla's future self-driving systems, and they'll be built at Samsung's new facility in Taylor, Texas. For Samsung, this is more than a contract—it's a second chance. The company's chip foundry business has struggled to keep up with competitors like TSMC, and its Texas factory has been operating without major clients for months. That changes now. After the deal was announced, Samsung's shares jumped nearly 7%. Tesla's also saw a healthy bump in premarket trading. Why This Factory—and Why Now? Elon Musk took to X (formerly Twitter) to explain that the factory's location near his home in Texas makes it easier for him to keep a close eye on operations. He even said he plans to personally walk the production line to speed things up. Musk hinted that the $16.5 billion figure is just the beginning—suggesting production might scale much higher. Until now, Samsung's Taylor plant was underutilized. Equipment from ASML sat idle as orders failed to materialize. Tesla's involvement gives the site a clear direction and a high-stakes mission: deliver the AI6 chips that will power the most advanced version of Tesla's Full Self-Driving technology. Following the Roadmap: AI4, AI5, and Now AI6 Samsung currently produces Tesla's AI4 chips, which are used in its existing FSD systems. AI5 chips—scheduled to launch in late 2026—will be built by TSMC in Taiwan and eventually Arizona. The AI6 chips, set to follow in 2027 or 2028, represent Tesla's next leap in autonomous hardware. For Samsung, this is a critical part of Chairman Jay Y. Lee's strategy to diversify beyond memory chips and build a serious presence in the custom chip manufacturing space. But it won't be easy. Samsung still holds only 8% of the global foundry market, compared to TSMC's dominant 67%, according to TrendForce. Behind the Curtain of a Billion-Dollar Partnership When Samsung first announced the deal, it kept the client anonymous. But industry insiders quickly confirmed Tesla's involvement. The agreement runs through 2033—a decade-long partnership that could shift the balance of power in high-performance chip manufacturing. The timing is crucial. Samsung is preparing to release its quarterly earnings, and the numbers haven't looked great lately. A projected 56% drop in operating profit and over $3.6 billion in foundry losses this year alone have investors nervous. Meanwhile, TSMC continues to rack up deals with the likes of Apple, Nvidia, and Qualcomm. That's why this Tesla deal matters. It's not just about production volume—it's about relevance. It's about whether Samsung can still compete in the race for AI-driven hardware. And for Tesla, it's a bold move to ensure its autonomy ambitions stay on track.
International Business Times
3 days ago
- Automotive
- International Business Times
Tesla Signs $16.5 Billion Chip Deal with Samsung to Power Next-Gen AI Plans
Tesla has signed a $16.5 billion deal with Samsung Electronics for the production of next-generation AI6 chips, CEO Elon Musk confirmed on Sunday. The chips will be manufactured at Samsung's chip plant in Taylor, Texas—a project that has faced setbacks due to a lack of major clients until now. The partnership marks a significant win for Samsung's struggling foundry business, which has trailed behind rivals like TSMC. Shares of Samsung rose nearly 7% on Monday following the announcement, as investors welcomed the long-awaited order. Despite the market optimism, analysts say the deal is unlikely to improve Tesla's short-term issues, such as falling EV sales or delays in its robotaxi rollout. Musk stated that the AI6 chips are intended for Tesla's self-driving vehicles and humanoid robots, adding that they may also serve wider AI applications due to their advanced computing power. He emphasized the partnership's operational proximity: "The fab is conveniently located not far from my house," he posted on X. Samsung currently supplies Tesla's AI4 chips used in Full Self-Driving (FSD) systems. TSMC is expected to produce the upcoming AI5 chips, set to begin by late 2026, suggesting AI6 chips may only be ready by 2027 or later. While the timeline for AI6 production remains unclear, analysts believe the deal could reduce financial losses for Samsung's chip foundry division, estimated at over $3.6 billion in just the first half of 2025. A senior South Korean trade official denied the chip deal was directly linked to ongoing trade negotiations with the U.S., despite the growing push for semiconductor collaboration. Samsung holds only 8% of the global foundry market, compared to TSMC's 67%, according to Trendforce. Industry experts view the Tesla deal as a crucial step in Samsung Chairman Jay Y. Lee's long-term goal of becoming a top player in contract chip manufacturing. (With inputs from agencies)
Time of India
3 days 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
4 days 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
