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, TSMC will make the A15 chips, first in Taiwan and then in Arizona, US.
He noted Samsung agreeing to allow Tesla to assist in maximising manufacturing efficiency, is a critical junction in innovation, stating, he 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 to be 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, Taiwan Semiconductor Manufacturing Company (TSMC).
Under Joe Biden’s presidency, it was announced that more than $40bn would be invested into semiconductor manufacturing, research and development in the US state of Texas, which would expand the state’s facilities, create thousands of new jobs and begin growing 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.
The strategy, which is called ‘Silicon Island’, is a part of the Programme for Government and is aligned with the European Chips Act and the EU Digital Decade.
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