DIGITIMES ASIA Research Insights: Win-win alliance between Tesla and Samsung strengthens chip and foundry ambitions

TAIPEI, Sept. 18, 2025 /PRNewswire/ -- Tesla and Samsung have struck a US$16.5 billion chip deal seen as a win-win, with Samsung's Texas fab set to produce Tesla's next-gen AI6 chips. Tesla gains customized supply chain support, while Samsung strengthens its foundry credibility and expands its external client base.

Following an announcement by Samsung of a US$16.5 billion foundry deal with an unnamed client, Tesla CEO Elon Musk confirmed on social media that Samsung's new Texas fab will produce Tesla's next-gen AI6 chip. Tesla will also aid in enhancing the plant's production efficiency, spotlighting both Tesla's chip plans and Samsung's foundry goals.

Supply chain integration behind Tesla-Samsung partnership

For Tesla, the deal provides not only flexibility, risk diversification, and bargaining power but also benefits from customized cooperation and integrated supply chain support.

Tesla's demand for advanced process chips goes beyond vehicles to include robots and AI applications. Unlike traditional chip designers, Tesla focuses on custom-designed chips optimized for its own products. To realize its vision and stay ahead in AI and "Physical AI," Tesla requires strong manufacturing support and seamless supply chain coordination.

From a supply chain and customization standpoint, Samsung suits Tesla better than TSMC. Tesla's EV sales, under 2 million annually, and the US$16.5 billion AI6 order over several years are modest for TSMC, limiting Tesla's access to tailored services. Samsung, aiming to grow its foundry business, finds Tesla's demand significant enough to warrant adjustments, explaining the focus on the AI6 rather than the AI5.

On another note, Samsung's vertical integration business model means weaker product sales affect its overall revenue; therefore, partnering with Tesla helps bridge this gap, as Tesla's focus on EVs and robotics complements Samsung's main business. Beyond foundry services, Samsung could provide memory, batteries, and displays, boosting Tesla's supply while ensuring demand for Samsung's products.

Building confidence in Samsung's Foundry through Tesla

For Samsung, teaming up with Tesla is less about quick profits and more about boosting its foundry business credibility. DIGITIMES foresees that Samsung and Intel are expected to capture around 10% and 9% of the global foundry market by 2025, mostly driven by internal demand—over 90% for Intel and at least 50% for Samsung. Attracting more external clients is essential for both companies.

Confidence is crucial for clients in foundry selection, as production issues affect revenues and strategies. Samsung will have to improve technology, yields, and secure flagship clients to revive its foundry business. Tesla's US$16.5 billion order reflects trust in Samsung's long-term capabilities and highlights its commitment to US manufacturing through the Taylor, Texas, fab.

In all, the deal is crucial for Tesla and Samsung, representing a strategic partnership beyond a simple contract, focusing on supply chain integration and foundry development. However, with Taylor's 2nm production line only launching in 2026, the partnership's future depends on production performance and yields.

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SOURCE DIGITIMES ASIA