Samsung Foundry, a division of Korean giant Samsung Electronics, has struck a deal with Tesla Motors to build the car maker’s next-generation autonomous driving AI6 semiconductors at its fabs in Tayler, Texas.
The $16.5 billion deal was confirmed by Tesla CEO Elon Musk after first being reported by Taiwan’s Central News Agency. Samsung currently manufactures Tesla’s AI4 chips, while Taiwan Semiconductor Manufacturing Co. (TSMC) produces the AI5 semiconductor.
The design win could be a boon for Samsung’s Texas fab, which is one of a planned megacluster of semiconductor facilities in the region. However, last year, Samsung said it had to delay the production of the fab to 2026 due to a slowdown in the foundry market and delays receiving subsidies from the CHIPS and Science Act.
After news of the delays emerged, a host of rumors swirled about the fab and Samsung’s overall foundry business. This included a report that the company was looking to spin off the manufacturing operations. Something the company denied outright and even said it would expand the Texas facilities further.
About this same time, Intel Corp. was having (and continues to have) issues with its own foundry business, leading to rumors that Samsung and Intel would pursue an alliance of their semiconductor manufacturing businesses — something both companies denied.
Tesla deal
According to market research firm TrendForce, Tesla and Samsung have been in talks about the partnership for a while and made a formal agreement due to early progress in Samsung’s 2 nm process technology, which is starting to show first results. Apparently the 2 nm process is surpassing 30% yields and approaching the 40% mark.
TrendForce said Samsung’s 2 nm process is set to begin volume production in the first half of 2026, but it will take at least one to two years to progress from design to mass production.
That means the collaboration is not likely to be a success until about 2028 and that depends on the performance of Samsung’s initial 2 nm output. TSMC will remain Telsa’s primary semiconductor source in the meantime.
According to reports regarding Samsung’s 2 nm process, the deal will likely speed up the construction and production of the Taylor facility and there may be growing interest from other U.S. vendors to place orders with Samsung.
