Why Tesla Chose Samsung Over TSMC for Its AI6 Chips

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Samsung Secures $1.65 Billion Deal to Manufacture Tesla's Next-Gen AI Chips

Published on July 28, 2025 | Technology & Business


In a significant development for the semiconductor and electric vehicle industries, Samsung Electronics has landed a $1.65 billion contract to manufacture Tesla's advanced AI chips, as confirmed by Elon Musk himself.

The Landmark Agreement

The deal, announced earlier this week, will see Samsung produce Tesla's sixth-generation AI chips (AI6) at its state-of-the-art fabrication plants. This partnership marks a major shift in Tesla's supply chain strategy and strengthens Samsung's position in the automotive semiconductor market.

"We're excited to work with Samsung on our next-generation AI hardware," Musk stated. "Their manufacturing expertise combined with our AI architecture will enable unprecedented performance in our vehicles and robotics systems."

Why This Partnership Matters

The collaboration brings together two industry leaders:

  • Tesla's AI leadership: The electric vehicle pioneer has been developing increasingly sophisticated AI chips to power its Full Self-Driving (FSD) technology and humanoid robot projects.
  • Samsung's manufacturing prowess: As the world's second-largest semiconductor manufacturer, Samsung brings cutting-edge process technology and production capacity to the table.

Technical Specifications and Timeline

While exact specifications remain confidential, industry analysts speculate the AI6 chips will feature:

  • 3nm process technology for improved power efficiency
  • Neural processing units optimized for Tesla's AI workloads
  • Enhanced thermal performance for automotive environments

Production is expected to begin in Q1 2026, with chips likely to debut in Tesla's 2027 vehicle models and the second-generation Optimus robot.

Market Impact

The announcement has already caused ripples across tech and automotive sectors:

  • Samsung shares rose 3.2% following the news
  • Tesla stock saw a modest 1.5% increase
  • Competitors like TSMC and Intel are reportedly reassessing their automotive strategies

This deal represents another step in Tesla's vertical integration strategy, following their acquisition of wireless chip startup Grok last year. For Samsung, it's a strategic win in the increasingly competitive foundry business.

As the AI revolution continues to transform multiple industries, partnerships like this one between Tesla and Samsung will likely become increasingly common as companies seek to secure their supply chains for critical components.

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