Source: Wall Street Insight
Samsung Electronics has reached a $16.5 billion chip manufacturing agreement with Tesla. Musk confirmed the details of the collaboration, emphasizing that he will personally participate in enhancing production efficiency and noted that “this is just the minimum amount.”
On July 28, media reports indicated that informed sources revealed Samsung announced on Monday that it had secured a chip manufacturing contract worth 22.8 trillion Korean won, with Tesla as the client, which has previously engaged with its foundry division.
Tesla CEO Musk disclosed the strategic layout of this collaboration in several posts on social media platform X, emphasizing that he will personally participate in enhancing production efficiency.
Analysts believe that for Musk, this chip contract signifies much more than hardware manufacturing, as AI is crucial to Tesla’s future development in Musk’s vision of a business empire, and AI chips are undoubtedly a core infrastructure.
Additionally, media reports indicate that this contract, which lasts until the end of 2033, not only marks a significant breakthrough for Samsung in the fierce foundry competition but also provides Samsung with an important opportunity to re-establish itself in the AI chip manufacturing sector.
Following the announcement, Samsung Electronics’ stock price surged 6.8% in Seoul trading, closing at 70,400 won per share, the highest level since September of last year.
Musk Confirms Collaboration Details, States $16.5 Billion is Just the Minimum Amount
Musk detailed the strategic layout of this collaboration in several posts on social media platform X. He stated that Samsung’s Texas factory will specifically manufacture Tesla’s AI6 chip, while Samsung is currently responsible for producing the AI4 chip, and TSMC will manufacture the recently designed AI5 chip.
Late on July 27, local time, Tesla CEO Musk posted on social media platform X, stating, “Samsung’s Texas factory will produce Tesla’s next-generation AI6 chip”.
Musk also pointed out in another tweet, “Samsung has agreed to allow Tesla to assist in maximizing production efficiency. This is a critical moment, as I will personally step in to accelerate progress. Moreover, this factory is not far from my home, making it convenient for transportation.”
Furthermore, Musk stated that the $16.5 billion is merely the minimum amount in the Samsung deal, and the actual output is likely to be several times higher. This implies that the actual value of this collaboration may far exceed the currently disclosed figures.
The Chip Cornerstone of a $30 Trillion Business Empire
In fact, Samsung Electronics and Tesla have been collaborating in the chip sector, primarily focusing on automotive chip design and foundry manufacturing, especially in the development of AI processing chips related to autonomous vehicles.
Analysts point out that behind this chip contract lies Musk’s grander business vision.