• Source:JND
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Tesla Inc., led by Elon Musk, has signed a major $16.5 billion contract for the supply of chips with Samsung Electronics for the development of the company’s next-generation AI6 chip. The partnership, which was announced on July 28, 2025, includes Samsung allocating its new fab in Texas exclusively for the production of Tesla’s AI chips, which is a tremendous advancement for the EV giant's AI-centred ambitions.

Through X (Twitter), Musk communicated that the contract was “strategically important,” offering that projected returns of the partnership could potentially outstrip the $16.5 billion figure.

Details of the Tesla-Samsung AI Chip Partnership

Chip focus: Tesla’s next-generation AI6 chipsets.

Manufacturing hub: Samsung’s new Texas fab will be dedicated to Tesla’s production needs.

Goal: Enhance manufacturing efficiency and meet growing AI hardware demands.

Deal duration: Runs through 2033, as confirmed by Samsung.

Elon Musk emphasised the magnitude of the collaboration:

“The $16.5B number is just the bare minimum. Actual output is likely to be several times higher,” Musk stated on X.

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Samsung and Tesla’s Semiconductor Roadmap

Samsung currently manufactures A14 chips.

Taiwan Semiconductor Manufacturing Company (TSMC) is finalizing A15 chips, which have completed the design stage.

As per Musk's hints, A15 chips will go into production by late 2026, with AI6 (A16) chips likely following from 2027 or 2028.

Samsung shares closed at their intraday high, while Tesla’s stocks gained during premkxrt trading ahead of Wall Street's open.

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Production Timeline and Analyst View

While Tesla has yet to confirm a specific production schedule for the A16 chip, indicated timelines from Reuters suggest:

  • A15 chips will start production by end of 2026.
  • A16 chip production may begin between 2027 and 2028.

SK Securities analyst Lee Dong-ju warned that Tesla has a history of relative production delays, meaning they are reasonable from a longer-term timeline perspective.

Final Thoughts

The Tesla-Samsung $16.5 billion chip deal marks an enormous step in chip manufacturing history. If Musk's timelines prove accurate, this partnership stands to influence AI-powered EVs and self-driving tech development; but its timelines and execution will undoubtedly come under close examination given Tesla's penchant for working toward lofty goals on record timelines.