Samsung Electronics has secured a $16.5 billion chip supply deal with Tesla.
This could boost Samsung's struggling contract chip manufacturing business.
Samsung has been facing tough competition in the foundry space, especially from rivals like TSMC.
Samsung Electronics has secured a $16.5 billion chip supply deal with Tesla, a move that could boost its struggling contract chip manufacturing business. The South Korean tech giant announced the deal over the weekend, saying it had signed a long-term agreement with a major global company but did not reveal the client’s name. However, according to Reuters, sources familiar with the matter confirmed that the deal is with Tesla. The contract will run until the end of 2033.
SurveyThis could be a big win for Samsung’s foundry business. Despite being one of the world’s leading memory chip makers, Samsung has been facing tough competition in the foundry space, especially from rivals like TSMC. The company has lost several high-profile clients to TSMC. “TSMC counts Apple, Nvidia, and Qualcomm among its customers,” the report mentioned.
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Pak Yuak, an analyst at Kiwoom Securities, estimated that the foundry division has lost more than 5 trillion won (about $3.63 billion) in the first half of this year. It’s unclear whether the deal will involve Samsung’s latest 2-nanometer chip technology. According to BNK Investment & Securities analyst Lee Min-hee, Samsung is still working on improving the production quality of these chips.
The agreement comes at a crucial time as South Korea looks to strengthen ties with the US in key industries like semiconductors and shipbuilding.
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So, the Tesla deal marks a significant step for Samsung as it tries to rebuild its presence in the global chip manufacturing market and compete more strongly against its biggest rivals.
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Ayushi Jain
Ayushi works as Chief Copy Editor at Digit, covering everything from breaking tech news to in-depth smartphone reviews. Prior to Digit, she was part of the editorial team at IANS. View Full Profile
