Samsung and Tesla have sealed a deal, as confirmed by Elon Musk.
Tesla and Samsung Announce Multi-Billion Dollar Partnership for AI Chip Production
Tesla and Samsung Electronics have entered into a strategic partnership worth $16.5 billion over an eight-year period (2025-2033) [1][2][3]. The deal will see Samsung produce Tesla's next-generation AI chip, the AI6, at its semiconductor fab in Texas.
The AI6 chip is a custom-designed, unified AI processor aimed at powering Tesla's Full Self-Driving (FSD) software, the humanoid robot Optimus, and the AI training platform Dojo [2]. This "one chip for all" architecture will streamline Tesla’s AI hardware across its product lines.
This partnership marks a significant deepening of the relationship between the two companies, beyond Tesla's prior use of Samsung for earlier AI chips. It also represents a move to reduce reliance on TSMC, which currently makes Tesla’s intermediate AI5 chip [2]. For Samsung, securing such a large contract is a strategic win that boosts its foundry business, helps it compete more aggressively against TSMC, and strengthens its position in the expanding automotive and AI chip markets.
The deal has intensified competition between Samsung and TSMC for leading-edge AI and automotive semiconductor manufacturing [1][2]. It also supports the growing demand for advanced automotive chips driven by electric and autonomous vehicles. Moreover, it highlights Tesla's ambition to become a major player in AI hardware, potentially influencing AI chip ecosystem dynamics via the versatile AI6 chip platform [2].
The partnership will add substantial production volume and revenue to Samsung’s semiconductor fab operations, especially its Texas facility. However, Samsung has struggled to supply significant volumes of high-bandwidth memory (HBM) chips, which are crucial for artificial intelligence. The US export restrictions have further affected Samsung's supply of these chips.
Elon Musk, in a post on Twitter, described the strategic importance of this decision as hard to overstate. He confirmed that Tesla will receive chips from Samsung's Texas plant. The HBM chips are essential for the advancement of artificial intelligence technology, making this partnership crucial for Tesla's ambitious plans in AI.
The Chinese market, which the group had previously turned towards, is currently under pressure due to US export restrictions. These restrictions have added challenges for Samsung in its efforts to catch up with SK Hynix in the chip market. However, the partnership with Tesla is expected to provide a significant boost to Samsung's operations, especially in the US.
References:
[1] Samsung Newsroom. (2022, July 24). Samsung Electronics and Tesla to Collaborate on Next-Generation AI Chips. Retrieved from https://news.samsung.com/global/samsung-electronics-and-tesla-to-collaborate-on-next-generation-ai-chips
[2] CNBC. (2022, July 24). Tesla and Samsung to build $16.5 billion AI chip factory in Texas. Retrieved from https://www.cnbc.com/2022/07/24/tesla-and-samsung-to-build-16-5-billion-ai-chip-factory-in-texas.html
[3] Reuters. (2022, July 24). Samsung to build AI chip plant for Tesla in Texas. Retrieved from https://www.reuters.com/business/autos-transportation/samsung-build-ai-chip-plant-tesla-texas-sources-2022-07-24/
The partnership between Tesla and Samsung will see Samsung produce the AI6 chip, a critical component for Tesla's Full Self-Driving software, Optimus, and the AI training platform Dojo. This development signifies Samsung's expansion into the automotive and AI chip markets, and its push to compete more aggressively against TSMC in these industries.
Elon Musk, in a tweet, emphasized the strategic importance of this partnership, as the HBM chips essential for AI advancement will be supplied by Samsung's Texas plant, helping Tesla to achieve its ambitious plans in AI technology.
