Samsung and Tesla sign $16.5 billion deal

Tesla CEO Elon Musk confirmed Monday that Samsung Electronics' Texas factory will supply chips to his company, following the Korean company's announcement of a $16.5 billion deal. "Samsung's new giant factory in Texas will be dedicated to manufacturing Tesla's next-generation AI6 chip. The strategic importance of this decision is hard to overstate," he wrote on the social network X, which he also owns.

Samsung announced Monday that it had entered into an eight-year agreement, without naming the client, describing it only as a "major global enterprise" in a regulatory filing. Under the $16.5 billion deal, the partnership, which began on July 24, will run until the end of 2033.

"I will personally commit to accelerating the pace of progress. And the factory is ideally located, not far from my home," Musk emphasized in a second post. The South Korean giant had announced earlier this month that it expected its second-quarter operating profit to fall 56% year-on-year due to US restrictions on exports of advanced components to China.

Despite more than a year of efforts to close the gap with South Korean chip rival SK Hynix, Samsung has struggled to supply large volumes of high-bandwidth memory (HBM) chips needed for artificial intelligence (AI).

The group has thus turned more towards the Chinese market, but this is now under pressure after Washington imposed restrictions on this sector, preventing American companies from exporting their chips there.