Samsung agreed to a $16.5 billion (£12.3 billion) contract to manufacture Tesla's artificial intelligence chips in a welcome move Monday when Elon Musk was.
The South Korean tech company has announced a contract with an unknown client at a regulatory submission. Tesla's CEO details social media platform X.
Musk writes that Samsung will produce Tesla's next-generation A16 chips at its new Texas factory.
“The strategic importance of this is difficult to exaggerate,” he wrote.
In December, the Biden administration announced $4.755 billion in funding Samsung's semiconductor manufacturing facility in Texas under the Chips Act. At the time, then U.S. Commerce Secretary Gina Raimondo said the funds would ensure that the funds would ensure a “steady flow” of tips, which are essential for AI and national security.
In an X post on Monday, Musk said he agreed to allow Samsung to allow Tesla to “help help maximize manufacturing efficiency” and “walking.” [manufacturing] “Personally, to accelerate the pace of progress.”
He added that the Samsung plant in Taylor, a suburb of Austin, Texas, is “conveniently located not far from my home.”
The deal will help reinvigorate projects that face long delays amid Samsung's challenges in maintaining and attracting large clients. Ryu Young-Ho, a senior analyst at Seoul-based NH Investment & Securities, said Taylor Plant “has no customers so far,” and said the deal “has made a lot of sense.”
In October, Reuters reported that Samsung had delayed delivery of chip manufacturing equipment from Dutch manufacturer ASML as it had not yet acquired key customers for the project. The plant has already been delayed until 2026.
Samsung manufactures Tesla's AI4 chips. This enhances the automaker's fully automated driver assistant system. Taiwan's TSMC will first make Tesla's AI5 chips in Taiwan and then in Arizona.
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The regulator's submission that Samsung announced its chip supply agreement did not name the client, saying it had requested confidentiality regarding details of the transaction that would be carried out until the end of 2033.
Samsung was asked to comment.
Reuters contributed to this article
