Elon Musk Confirms Tesla’s $16.5 Billion Chip Contract with Samsung

Samsung Electronics has signed a $16.5 billion contract with Tesla to provide semiconductors, according to a regulatory filing and Elon Musk’s X postings.

The memory chipmaker, which did not name the counterparty, stated in its filing that the contract began on July 26, 2025 (order receipt) and ended on December 31, 2033.

However, Musk later confirmed in a response to a post on the social networking platform X that Tesla was the counterparty.

He also wrote, “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. Samsung currently makes AI4.TSMC will make AI5, which just finished design, initially in Taiwan and then Arizona.”

“Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress,” Musk stated on X, hinting that the deal with Samsung could be worth more than the previously announced $16.5 billion.

Samsung had stated that specifics of the deal, including the name of the counterparty, would not be published until the end of 2033, citing a request from the second party “to protect trade secrets,” according to a Google translation of the Korean filing on Monday.

“Since the main contents of the contract have not been disclosed due to the need to maintain business confidentiality, investors are advised to invest carefully considering the possibility of changes or termination of the contract,” according to the company.

The company’s stock rose more than 6% in trading on Monday, reaching its highest level since September 2024.

Ray Wang, research director of semiconductors, supply chain, and emerging technology at The Futurum Group, told source that Tesla was a likely customer prior to Musk’s post. A source told that Samsung’s contract was with Tesla.

Samsung’s foundry service creates semiconductors using designs provided by other companies. It is the world’s second largest provider of foundry services, after Taiwan Semiconductor Manufacturing Company.

In April, the company claimed that it planned to begin mass production of 2 nanometers in its foundry division and obtain significant orders for the next-generation technology. In semiconductor technology, decreasing nanoscale sizes indicate more compact transistor designs, which result in increased processing power and efficiency.

According to South Korean media, American chipmaker Qualcomm may order chips made with Samsung’s 2 nanometer technology.

Samsung, which will report profits on Thursday, expects its second-quarter profit to more than halve. An analyst previously told CNBC that the poor projection was due to low orders in its foundry sector and the company’s failure to capture AI demand in its memory division.

The company has slipped behind competitors SK Hynix and Micron in high-bandwidth memory chips, which are utilized in AI chipsets.

SK Hynix, the HBM market leader, has become the primary supplier of these chips to the American AI behemoth Nvidia. While Samsung has apparently been striving to have the latest version of its HBM chips authorized by Nvidia, a report from a local outlet says that these plans have been delayed until at least September.