Samsung confirms mass production of Tesla chips in the U.S. starting in 2027, with a $16.5 billion order boosting its foundry business growth

Zhitong
2026.03.18 06:29

Samsung Electronics confirmed plans to begin mass production of Tesla's chips at its Texas factory starting in the second half of 2027, signing a semiconductor supply contract worth $16.5 billion to support Tesla's autonomous driving technology. This move will boost Samsung's foundry business, which is expected to turn profitable next year. Samsung's stock price has recently risen, with the market optimistic about the prospects of its foundry division

According to Zhitong Finance APP, Samsung Electronics has confirmed plans to begin mass production of chips for Tesla (TSLA.US) at its Texas factory starting in the second half of 2027.

This deal will boost Samsung's foundry business and support Tesla's ambitions in the field of artificial intelligence. Han Jin-man, head of Samsung's foundry business, shared this latest development at a shareholders' meeting held in Suwon, south of Seoul.

Previously, Elon Musk announced last July that Samsung's new wafer fab in Texas would be dedicated to producing Tesla's next-generation AI chips (such as AI6). Shortly thereafter, the Korean giant confirmed it had signed a semiconductor supply contract worth $16.5 billion, lasting until 2033, focusing on Tesla's autonomous driving technology.

At last year's shareholders' meeting, Samsung Electronics Vice Chairman and Co-CEO, and head of the chip business, Choi Yong-hwan, apologized for Samsung's initial missed opportunity in the AI chip market, which had led to a decline in stock prices and profits; at that time, he worked hard to reassure frustrated shareholders.

However, the situation has since improved. Following a surge on Tuesday, Samsung's stock rose another 5.3% on Wednesday. Previously, NVIDIA CEO Jensen Huang stated that the Korean company was producing NVIDIA's new artificial intelligence chips.

Analysts say Huang's remarks have sparked market expectations for Samsung's foundry division. This division produces logic chips for Tesla, Apple, and Samsung's mobile division, and is expected to turn profitable as early as next year after experiencing billions of dollars in losses annually in recent years

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