Samsung's foundry business looks at profitability with Tesla, Apple deals | Details
&imwidth=600&imheight=450&format=webp&quality=medium "Samsung's foundry business looks at profitability with Tesla, Apple deals | Details")
A visitor walks past the logo of Samsung Electronics during the Korea Electronics Show 2025. Photograph: (AFP file)
Samsung-Tesla deal: Elon Musk said that Tesla wants an oversupply of AI5 chips. The chips will be used in cars as well as robots, he added.
Samsung's foundry business has bagged orders from giants like Tesla and Apple for its AI5 chip, which will be mass-produced in 2026. The company has also entered into a contract for manufacturing the next-generation AI6 chips.
Tesla CEO Elon Musk said that the AI5 chip will be manufactured by Samsung in Texas and TSMC in Arizona. The chips had previously been expected to be produced solely by TSMC.
Elon Musk said that Tesla wants an oversupply of AI5 chips. The chips will be used in cars as well as robots, he added.
In July, Elon Musk announced on X that Samsung would be producing Tesla's AI6 chip. After entering the USD 16.5 billion agreement, Tesla became the company's chip division's largest single client.
The AI6 chips will be produced from 2027-2028 to 2033.
Amid pressure due to geopolitics, companies want to reduce their dependence on Taiwan-based TSMC. This is because they want to ensure their chip supply.
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After TMSC, Samsung, the South Korean giant, is the only company that can produce advanced chips at the 2-nanometer level.
Samsung has also entered chip deals with Apple and Nintendo, providing a fillip to the company's chip business that had been lagging in the last few years.
The foundry division's quarterly losses, which hovered around 2 trillion won in the first half, are estimated to have narrowed to the low 1-trillion-won range in the third quarter.
Once Samsung begins supplying both mobile chips for next year's Galaxy S26 smartphones and Tesla's AI5 chips, the company's deficit could fall below 1 trillion won.
The company's foundry business is expected to return to profitability in late 2027.
Samsung plans to supply chips optimized for the power efficiency and performance of Apple products, including iPhones.
It is also manufacturing the main chips designed by Nvidia for the popular Nintendo Switch 2 gaming console.