Tesla CEO Elon Musk has officially confirmed that his company is the previously unnamed client in Samsung Electronics’ multi-year chip making deal valued at over $16.5 billion. The agreement sets Samsung’s Texas foundry as the site for building Tesla’s next-generation AI6 processors.
Samsung had earlier disclosed the deal without naming the customer, citing confidentiality. Musk later acknowledged Tesla’s involvement via a post on X, highlighting the significance of the new U.S. plant.
According to Musk, the Texas fab will focus entirely on Tesla’s “AI6 chip”, a custom silicon platform designed for future autonomous systems. He also stated that “AI4” chips are currently manufactured by Samsung, while “AI5” production has been assigned to TSMC in Taiwan and Arizona.
Tesla to Help Optimize Chip Production
Musk noted that Samsung has agreed to let Tesla assist with improving efficiency at the manufacturing site — a condition he described as “critical” to the project’s success.
He also mentioned he plans to be closely involved with operations at the fab, which is located near his residence, adding that he will “walk the line personally” to push progress.
Samsung Filing Lists Deal Structure and Timeline
Samsung later posted official terms of the agreement via its Investor Relations channel, with the following highlights:
- Contract Value: KRW 22.76 trillion (≈ USD 16.54 billion)
- Duration: July 24, 2025 – December 31, 2033
- Client: A large multinational firm (now publicly linked to Tesla)
- Advance Payment: None
- Revenue Reference (2024): KRW 300.87 trillion
- Value-to-Revenue Ratio: 7.6%
- Exchange Rate Basis: 1,376 KRW/USD (as of July 28, 2025)
- Contract Signed On: July 26, 2025
- Effective Start Date: July 24, 2025
Samsung noted that due to the client’s request for privacy, full details will remain under wraps until the end of 2033 unless mutually disclosed earlier.
The agreement’s figures are subject to change depending on operational outcomes, and no advance payments were required under its current structure.
Samsung Shares Jump Amid Foundry Momentum
Following the announcement and Musk’s public confirmation, Samsung’s stock climbed as much as 3.5% in Seoul — its sharpest single-day gain in nearly a month. The contract marks a major milestone for Samsung’s foundry division, which has recently seen lower-than-expected order volumes and unused capacity.
If the deal is tied to Samsung’s Taylor, Texas fab — as Musk implied — it could rejuvenate a project that has experienced multiple delays and setbacks in onboarding major clients.
Implications Beyond Business
The collaboration could also be timely for South Korea, which is actively building industrial ties with the United States across sectors such as chips and shipbuilding. The Samsung-Tesla partnership may align with ongoing efforts to reduce or avoid U.S. import tariffs, including proposed 25% levies on Korean exports.
Further updates on the AI6 chip production and the Taylor fab’s progress are expected in the coming months.