Elon Musk, the CEO of Tesla, said that the American carmaker has agreed to pay $16.5 billion to source semiconductors from Samsung Electronics. This agreement is anticipated to support the South Korean tech giant’s struggling contract manufacturing division.
As the world’s leading memory chip manufacturer faces increasing pressure to build artificial intelligence chips, where it lags behind competitors like TSMC and SK Hynix, Samsung shares surged about 7% on news of the deal on Monday.
Musk said that Tesla’s next-generation AI6 processor will be produced in Samsung’s new chip facility in Taylor, Texas, which might revitalize the project after it has been delayed for a long time due to Samsung’s struggles to draw in and keep big customers.
Tesla agreed to assist Samsung in enhancing production efficiency. This is a crucial element since I will personally walk the line to quicken the rate of advancement. Additionally, the factory is conveniently close to my home,” Musk said in a Monday post on X.
The $16.5 billion figure is the absolute minimum. In a different article, he stated that the actual production would probably be several times greater. In pre-market trade in the United States, Tesla shares were up 1.9%, while Samsung shares surged 6.8% to their highest level since September of last year.
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