Tesla CEO Elon Musk confirmed on Monday that Samsung Electronics’ Texas factory will supply chips to his company, following the South Korean firm’s announcement of a $16.5 billion (about €13.5 billion) deal.
Musk revealed on social media platform X, which he also owns, that Samsung’s new mega-factory in Texas will be dedicated to manufacturing Tesla’s next-generation AI6 chip.
“The strategic importance of this is hard to overstate,” he said.
Earlier on Monday, Samsung had announced an eight-year agreement with a “major global company,” without naming the client in a regulatory filing.
The $16.5 billion partnership, effective from 24 July, will extend until the end of 2033.
The order is estimated to account for approximately 7.6% of Samsung’s 2024 turnover, which underscores the contract's significance for the company.
According to Yonhap, the deal is anticipated to bolster Samsung’s foundry division, which currently trails behind its industry rival, Taiwan Semiconductor Manufacturing Company (TSMC).
Following Monday's announcement, Samsung’s shares surged by 2.43% on the stock market.
Earlier this month, the South Korean tech giant had projected a 56% year-on-year drop in its operating profit for the second quarter due to US-imposed restrictions on the exports of advanced components to China.
Despite attempts over the past year to narrow the gap with its South Korean chip rival SK Hynix, Samsung has faced challenges in delivering large volumes of high-bandwidth memory (HBM) chips essential for artificial intelligence (AI).
The company has increasingly turned to the Chinese market, but this has come under pressure following restrictions from Washington that limit American firms from exporting chips there.
