Cailian Press, July 28th (Editor Liu Rui) – The news that Samsung and a major multinational corporation reached an agreement worth $16.5 billion for chip supply this Monday has become a focal point in the global semiconductor industry.
Following the announcement of this news by Samsung early in the morning and its subsequent surge in share prices on the Korean stock market, not long after, Elon Musk, CEO of Tesla, eagerly leaked that it was Tesla who had signed the deal with Samsung.
Elon Musk Actively Leaks Details of the Deal with Samsung
On Monday morning Beijing time, Tesla CEO Elon Musk confirmed on X that the company had signed a chip procurement agreement with Samsung Electronics, which is expected to boost the South Korean tech giant’s loss-making foundry business.
Musk posted on X saying: “Samsung’s new gigantic factory in Texas will be specifically dedicated to producing Tesla’s next-generation AI chips. Its strategic importance is undeniable.”
“Samsung has agreed to let Tesla assist in maximizing manufacturing efficiency. This is a critical moment because I will personally urge to expedite progress. Moreover, the foundry plant is close to my home, very convenient.”
The chip foundry agreement was signed last Saturday (July 26th), and Samsung Electronics announced this news early in the morning on Monday. However, Samsung did not disclose its client, and stated that details of the transaction, including the name of the company signing the deal, would be disclosed before the end of 2033 as per customer request.
However, shortly after the news broke, several insiders revealed that the client of this deal was indeed Tesla. And Tesla CEO Elon Musk himself later confirmed this rumor on X.
Significant for both Samsung and South Korea
At the time of this deal, Samsung faces increasing pressure in the competition for AI chip production, trailing behind competitors such as TSMC and SK Hynix, which severely impacts its profits and stock price.
Kiwoom Securities analyst Pak Yuak stated that this latest big order will help reduce Samsung’s losses from its foundry business. He estimated that Samsung’s losses from its foundry business in the first half of the year will exceed 5 trillion won (approximately $3.63 billion).
Analysts say that Samsung has been struggling to cope with key customers moving towards TSMC for advanced chips. Currently, many tech giants like Apple, Nvidia, and Qualcomm have become clients of TSMC.
The deal between Samsung and Tesla is also significant for South Korea, as it seeks to establish partnerships with the United States in the fields of chips and shipbuilding. South Korea is currently making final efforts to reach a trade agreement to eliminate or reduce potential tariffs of 25% imposed by the US.
However, it remains unclear how this order will affect Samsung’s plans to start production at its new Texas factory. Due to Samsung’s difficulty in winning major clients, the factory’s production plan has been postponed.
Lee Min-hee, an analyst at BNK Investment & Securities, mentioned that Samsung is striving to increase its output of its latest 2 nanometer technology, but the latest foundry order is unlikely to involve this cutting-edge technology.