Elon Musk has confirmed a $16.5 billion chip deal between his electric car company Tesla and Samsung.
According to Reuters, the richest person in the world on Monday announced that Tesla has joined forces with Samsung Electronics for its next-generation A16 chip.
In a post on X, the tech giant wrote, “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 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,” he added.
After a billions of dollars chip deal news Samsung’s share rose by more than 6%.
Although the SpaceX boss has not revealed the production timeline, he previously mentioned that Tesla’s next-generation A15 chip will be produced by the end of 2026, so it is believed that the AI6 production will be made around the same time or shortly after that.
It is worth noting that the world’s top memory chip maker is currently making the A14 chip for the Full Self-Driving driver assistant system of Tesla, and “TSMC will make AI5, which just finished design, initially in Taiwan and then Arizona.”
Samsung is trying to grow its contract chip manufacturing business, and the Texas project is a key part of this effort. The company currently ranks second in the global foundry market with about 7.7% share, while China’s Taiwan Semiconductor Manufacturing Company Limited (TSMC) dominates with around 67.6% share.
