Samsung Elec signs chip supply deal with Tesla, sources say
On Saturday, Samsung announced a $16.5 billion chip supply deal with a major global company, without naming the client. It said the customer had requested confidentiality about the details of the deal, which will run through the end of 2033.
The deal comes as Samsung faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix.
This lag has weighed heavily on its profits and share price.
Samsung, the world's top memory chip maker, also makes logic chips designed by customers through its foundry business.
Pak Yuak, an analyst at Kiwoom Securities, said the latest deal would help reduce losses at Samsung's foundry business, which he estimated exceeded more than 5 trillion won ($3.63 billion) in the first half of the year.
Analysts say Samsung had struggled with the defection of key clients to TSMC for advanced chips. TSMC counts Apple, Nvidia and Qualcomm among its customers.
The deal with Tesla comes as South Korea is seeking U.S. partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or cut potential 25% U.S. tariffs.
It is not clear how the order would affect Samsung's plan to start production at its new factory in Texas, which has been delayed as it had struggled to win major customers.
Samsung is grappling to boost production yields of its latest 2-nanometer technology, and the order is unlikely to involve the cutting-edge tech, Lee Min-hee, an analyst at BNK Investment & Securities, said.
Samsung has been losing market share to TSMC in contract manufacturing, underscoring technological challenges the firm faces in mastering advanced chip manufacturing to attract clients like Apple and Nvidia, analysts said.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
6 hours ago
- Business Recorder
Wheat down 4-5 cents, corn down 2-3, soybeans down 6-7
CHICAGO: The following are U.S. expectations for the resumption of grain and soy complex trading on Monday. Wheat - Down 4 to 5 cents per bushel Wheat futures fell on expectations of ample global supplies and light demand. A group of South Korean flour mills bought an estimated 50,000 metric tons of milling wheat to be sourced from Canada in an international tender on Friday, European traders said on Monday. Russian wheat export prices continued to rise last week even as dry weather in the south of the country raised concerns about the harvest, while new wheat deliveries to ports were still picking up pace, analysts said. European governments and companies reacted with both relief and concern on Monday to the framework trade deal struck with U.S. President Donald Trump, acknowledging what was seen as an unbalanced deal but one that avoided a deeper trade war. CBOT September soft red winter wheat was last down 4-1/2 cents at $5.33-3/4 per bushel. K.C. September hard red winter wheat was last down 2-3/4 cents at $5.23-3/4 per bushel. Minneapolis September wheat was last down 1-1/4 cents at $5.83-1/2 a bushel. Wheat down 1-2 cents, corn steady-up 1, soy up 5-6 Corn - Down 2 to 3 cents per bushel Corn futures fell, pressured by forecasts for beneficial rains in the coming days and milder nighttime temperatures as August begins. Farmers in Brazil's center-south had harvested 68% of their 2025 second corn crop as of last Thursday, agribusiness consultancy AgRural said on Monday, up 13 percentage points from the previous week but below the 91% reported a year earlier. After heat at the beginning of the week, milder temperatures and some rainfall is expected to aid crops, according to Commodity Weather Group. CBOT December corn was last down 2 cents at $4.17 per bushel. Soybeans - Down 6 to 7 cents per bushel Soybean futures dropped with abundant global supplies, sluggish demand and benign crop weather across the U.S. Midwest. Heat in the Midwest is expected to ease midweek, with showers aiding the soy crop, according to Commodity Weather Group. CBOT November soybeans were last down 6-1/4 cents at $10.14-3/4 per bushel.
Express Tribune
9 hours ago
- Express Tribune
Tesla confirms $16.5 billion chip deal with Samsung for AI hardware
Elon Musk has confirmed Tesla has signed a $16.5 billion semiconductor supply agreement with Samsung Electronics, a deal set to support the development of the automaker's next-generation AI chips. Samsung disclosed the contract in a regulatory filing, with the deal taking effect from 26 July 2025 through to 31 December 2033, as reported by CNBC. While the South Korean firm did not initially identify its partner, Musk later confirmed Tesla's involvement on social media platform X. 'Samsung's giant new Texas fab will be dedicated to making Tesla's next-generation AI6 chip,' Musk wrote, adding that Tesla will assist in improving production efficiency. 'I will walk the line personally to accelerate the pace of progress,' he said, also suggesting the deal's value could exceed the reported figure. Samsung agreed to allow Tesla to assist in maximizing 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 😃 — Elon Musk (@elonmusk) July 28, 2025 The agreement marks a significant milestone for both firms. Samsung, which already produces Tesla's AI4 chips, will compete directly with TSMC, which is contracted to manufacture Tesla's AI5 series. Samsung noted that further details, including the client's identity, would remain confidential until the contract expires, citing trade secret protections. It also cautioned investors that the agreement could be amended or terminated. The announcement boosted Samsung's share price by more than 6% on Monday - its highest since September 2024. Analysts had previously speculated Tesla was the buyer, with Bloomberg reporting the link ahead of Musk's confirmation. 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 currently makes AI4. TSMC will make AI5, which just finished design, initially in Taiwan and then Arizona. — Elon Musk (@elonmusk) July 28, 2025 The deal comes as Samsung races to strengthen its position in the AI semiconductor market. The company has pledged to begin mass production of 2-nanometre chips and is aiming to secure major orders for its next-generation process. Despite these plans, Samsung has struggled to match rivals in high-bandwidth memory (HBM) production. SK Hynix, currently the leader in HBM technology, is a key supplier to Nvidia, while Samsung's latest version is reportedly delayed until at least September. Samsung will release its second-quarter earnings on Thursday. Analysts expect profit to more than halve, driven by weak demand in its foundry business and slower progress in AI chip adoption.
Business Recorder
16 hours ago
- Business Recorder
Samsung Elec signs chip supply deal with Tesla, sources say
SEOUL: Samsung Electronics has signed a deal to supply chips to Tesla Inc, two people briefed about the matter told Reuters on Monday, in a significant boost to the South Korean tech giant's loss-making contract manufacturing business. On Saturday, Samsung announced a $16.5 billion chip supply deal with a major global company, without naming the client. It said the customer had requested confidentiality about the details of the deal, which will run through the end of 2033. The deal comes as Samsung faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix. This lag has weighed heavily on its profits and share price. Samsung, the world's top memory chip maker, also makes logic chips designed by customers through its foundry business. Pak Yuak, an analyst at Kiwoom Securities, said the latest deal would help reduce losses at Samsung's foundry business, which he estimated exceeded more than 5 trillion won ($3.63 billion) in the first half of the year. Analysts say Samsung had struggled with the defection of key clients to TSMC for advanced chips. TSMC counts Apple, Nvidia and Qualcomm among its customers. The deal with Tesla comes as South Korea is seeking U.S. partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or cut potential 25% U.S. tariffs. It is not clear how the order would affect Samsung's plan to start production at its new factory in Texas, which has been delayed as it had struggled to win major customers. Samsung is grappling to boost production yields of its latest 2-nanometer technology, and the order is unlikely to involve the cutting-edge tech, Lee Min-hee, an analyst at BNK Investment & Securities, said. Samsung has been losing market share to TSMC in contract manufacturing, underscoring technological challenges the firm faces in mastering advanced chip manufacturing to attract clients like Apple and Nvidia, analysts said.
