Samsung will produce the next generation of chips to power Tesla’s innovations.
Elon Musk’s automotive company Tesla has agreed to a deal valued at $16.5bn with electronics giant Samsung, which will see the South Korean business provide Tesla with A16 semiconductor chips.
In a post on X, Musk said, “Samsung’s giant new Texas fab will be dedicated to making Tesla’s next-generation AI6 chip. The strategic importance of this is hard to overstate.” He added, while Samsung currently specialises in A14 chips, Taiwan Semiconductor Manufacturing Company (TSMC) will make the A15 chips, first in Taiwan and then in Arizona, US. No timeline was provided for A16 chip production.
“Samsung agreed to allow Tesla to assist in maximising manufacturing efficiency,” Musk posted. “This is a critical point, as I will walk the line personally to accelerate the pace of progress.” He jokingly added that the premises was conveniently located near to his home.
Reportedly, in a regulatory filing previously made by Samsung, which did not initially name Tesla as the subject of the deal, the South Korean organisation stated that the effective start date for the contract is 26 July, 2025 and will run to 31 December, 2033.
According to reports, the deal is the largest won by Samsung from a single customer and has the potential to revitalise the organisation as it struggles to move ahead of its rival in the global chips space, TSMC.
Under Joe Biden’s US presidency, it was announced that more than $40bn would be invested into semiconductor manufacturing, research and development in the US state of Texas, to expand the state’s facilities, create thousands of new jobs and grow the region’s production of advanced semiconductor chips.
Ireland is also building upon its reputation as a strong and resilient figure in the semiconductor sector. In May of this year, the Irish Government launched a national strategy aimed at attracting large investments, creating thousands of high-value jobs and accelerating the development of cutting-edge technologies.
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