Samsung Electronics has clinched a landmark 16-point-5 billion dollar deal to supply AI chips to Tesla, a move set to revitalize its struggling foundry division.
Samsung Electronics will produce AI semiconductors for Tesla in a new agreement, which could prove to be a game-changer for its currently underperforming foundry division. In a regulatory filing, the South Korean chip giant announced on Monday that it had secured a 22-point-8 trillion won, or 16-point-5 billion U.S. dollar, chipmaking agreement.
The deal represents 7-point-6 percent of Samsung Electronics’ total revenue of 300-point-9 trillion won in 2024, marking it as the largest chip order for a single client secured by the company.
This long-term contract is set to run for more than eight years through the end of December 2033. The tech giant initially did not disclose the identity of the client or the specifics of the deal, citing “management confidentiality.”
Tesla CEO Elon Musk said in a social media post later in the day that Samsung would produce next-generation AI6 semiconductors for the company. The Korean firm currently produces AI4s, while Taiwan’s TSMC manufactures AI5s.
In a reply to a comment, Musk also suggested the deal could be “much more than” the amount Samsung had disclosed. Following the announcement, shares of Samsung Electronics surged 6-point-3 percent on intraday trading, going above 70,000 won for the first time since last September.
Samsung has been steadily losing ground in certain manufacturing sectors, and so this record-breaking deal is expected to give a much-needed boost to its foundry division, which has long struggled to catch up with global industry leader TSMC.
Source: Arirang News
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