Samsung Electronics has secured a semiconductor foundry supply contract with Tesla worth approximately 23 trillion won, marking the largest single-client deal in its chip division’s history. The deal is drawing attention as it could help revive the company’s long-underperforming foundry business, once considered a burdensome unit within the company due to its chronic losses and lagging performance.

On July 28, Samsung announced in a regulatory filing that it had signed a 22.76 trillion won chip foundry contract with a major global company. The contract, which spans 8 years and 5 months from July 24 through December 31, 2033, accounts for about 7.6 percent of Samsung’s total sales last year (300.87 trillion won).

While Samsung did not disclose the client or detailed terms of the deal, citing a request to protect trade secrets, Tesla CEO Elon Musk publicly confirmed the partnership on social media platform X later that day.

Musk wrote, “Samsung’s new mega factory in Texas will be dedicated to producing Tesla’s next-generation AI6 chip,” adding that “the strategic importance of this deal cannot be overstated.” The AI6 chip is Tesla’s in-house developed high-performance AI processor, intended for use in full self-driving (FSD) vehicles, humanoid robots, and supercomputers.

Though the specific production timeline for the AI6 chip remains unclear, Musk previously said that its predecessor, the AI5 chip, would enter mass production by the end of 2026, suggesting that AI6 production would likely follow thereafter.

Musk also revealed that Samsung is currently producing the AI4 chip, while Taiwan's TSMC will manufacture the AI5 chip, first in Taiwan and later in Arizona, U.S. He added that “the $16.5 billion contract is just a minimum. Actual output may be several times higher,” implying that the final value of the deal could exceed its initial figure.

The deal with Tesla could mark a turning point for Samsung’s foundry unit, which has struggled in recent years. Since 2022, the division has faced persistent challenges including low production yield and difficulty attracting large-scale clients, resulting in quarterly losses in the trillions of won. Samsung’s global market share in the foundry sector currently stands at 8 percent, far behind industry leader TSMC’s 67 percent.

An industry insider said, “It’s too early to say this single deal will completely end Samsung’s foundry woes,” but added, “If Samsung executes this project successfully, it could boost trust in its process technology and manufacturing capabilities, ultimately helping to attract more orders from global big tech firms.”

News of the contract sent Samsung’s stock soaring. On the same day, its shares closed at 70,400 won, up 6.83 percent from the previous trading session, surpassing the 70,000-won mark for the first time in nearly 11 months, since early September last year.

Samsung Electronics has secured a semiconductor foundry supply contract with Tesla worth approximately 23 trillion won, marking the largest single-client deal in its chip division’s history. The deal is drawing attention as it could help revive the company’s long-underperforming foundry business, once considered a burdensome unit within the company due to its chronic losses and lagging performance.

On July 28, Samsung announced in a regulatory filing that it had signed a 22.76 trillion won chip foundry contract with a major global company. The contract, which spans 8 years and 5 months from July 24 through December 31, 2033, accounts for about 7.6 percent of Samsung’s total sales last year (300.87 trillion won).

While Samsung did not disclose the client or detailed terms of the deal, citing a request to protect trade secrets, Tesla CEO Elon Musk publicly confirmed the partnership on social media platform X later that day.

Musk wrote, “Samsung’s new mega factory in Texas will be dedicated to producing Tesla’s next-generation AI6 chip,” adding that “the strategic importance of this deal cannot be overstated.” The AI6 chip is Tesla’s in-house developed high-performance AI processor, intended for use in full self-driving (FSD) vehicles, humanoid robots, and supercomputers.

Though the specific production timeline for the AI6 chip remains unclear, Musk previously said that its predecessor, the AI5 chip, would enter mass production by the end of 2026, suggesting that AI6 production would likely follow thereafter.

Musk also revealed that Samsung is currently producing the AI4 chip, while Taiwan's TSMC will manufacture the AI5 chip, first in Taiwan and later in Arizona, U.S. He added that “the $16.5 billion contract is just a minimum. Actual output may be several times higher,” implying that the final value of the deal could exceed its initial figure.

The deal with Tesla could mark a turning point for Samsung’s foundry unit, which has struggled in recent years. Since 2022, the division has faced persistent challenges including low production yield and difficulty attracting large-scale clients, resulting in quarterly losses in the trillions of won. Samsung’s global market share in the foundry sector currently stands at 8 percent, far behind industry leader TSMC’s 67 percent.

An industry insider said, “It’s too early to say this single deal will completely end Samsung’s foundry woes,” but added, “If Samsung executes this project successfully, it could boost trust in its process technology and manufacturing capabilities, ultimately helping to attract more orders from global big tech firms.”

News of the contract sent Samsung’s stock soaring. On the same day, its shares closed at 70,400 won, up 6.83 percent from the previous trading session, surpassing the 70,000-won mark for the first time in nearly 11 months, since early September last year.

Samsung Electronics has secured a semiconductor foundry supply contract with Tesla worth approximately 23 trillion won, marking the largest single-client deal in its chip division’s history. The deal is drawing attention as it could help revive the company’s long-underperforming foundry business, once considered a burdensome unit within the company due to its chronic losses and lagging performance.

On July 28, Samsung announced in a regulatory filing that it had signed a 22.76 trillion won chip foundry contract with a major global company. The contract, which spans 8 years and 5 months from July 24 through December 31, 2033, accounts for about 7.6 percent of Samsung’s total sales last year (300.87 trillion won).

While Samsung did not disclose the client or detailed terms of the deal, citing a request to protect trade secrets, Tesla CEO Elon Musk publicly confirmed the partnership on social media platform X later that day.

Musk wrote, “Samsung’s new mega factory in Texas will be dedicated to producing Tesla’s next-generation AI6 chip,” adding that “the strategic importance of this deal cannot be overstated.” The AI6 chip is Tesla’s in-house developed high-performance AI processor, intended for use in full self-driving (FSD) vehicles, humanoid robots, and supercomputers.

Though the specific production timeline for the AI6 chip remains unclear, Musk previously said that its predecessor, the AI5 chip, would enter mass production by the end of 2026, suggesting that AI6 production would likely follow thereafter.

Musk also revealed that Samsung is currently producing the AI4 chip, while Taiwan's TSMC will manufacture the AI5 chip, first in Taiwan and later in Arizona, U.S. He added that “the $16.5 billion contract is just a minimum. Actual output may be several times higher,” implying that the final value of the deal could exceed its initial figure.

The deal with Tesla could mark a turning point for Samsung’s foundry unit, which has struggled in recent years. Since 2022, the division has faced persistent challenges including low production yield and difficulty attracting large-scale clients, resulting in quarterly losses in the trillions of won. Samsung’s global market share in the foundry sector currently stands at 8 percent, far behind industry leader TSMC’s 67 percent.

An industry insider said, “It’s too early to say this single deal will completely end Samsung’s foundry woes,” but added, “If Samsung executes this project successfully, it could boost trust in its process technology and manufacturing capabilities, ultimately helping to attract more orders from global big tech firms.”

News of the contract sent Samsung’s stock soaring. On the same day, its shares closed at 70,400 won, up 6.83 percent from the previous trading session, surpassing the 70,000-won mark for the first time in nearly 11 months, since early September last year.