Tesla CEO Elon Musk has confirmed that his firm will use Korean technology giant Samsung's chip manufacturing plant in Taylor, Texas, to produce its next-generation AI chips. Called the AI6, these chips will be manufactured with Tesla's assistance, with Musk adding that he will personally take part in the process to ensure smooth production. Taiwan's TSMC, the world's largest contract chip manufacturer, will make the AI5 chips, initially in Taiwan and then in its Arizona plant, according to Musk.
Elon Musk To Personally Oversee Samsung's Chip Production Lines For Tesla's Next-Generation AI Chips
Tesla's deal with Samsung for its AI chips marks a rare win for the South Korean firm, whose foundry division has continued to lag behind TSMC's over the past couple of years. The deal is worth $16.5 billion, according to Bloomberg, and Samsung's shares gained by 2.5% in Korea after the news broke.
Musk confirmed the development on X and added that the deal likely worth "much more than" $16.5 billion. According to him Samsung will manufacture Tesla's next-generation AI chips while TSMC will continue with the current generation hardware. Musk went on to comment that the "$16.5B number is just the bare minimum. Actual output is likely to be several times higher."
The chips currently used in Tesla's cars are the AI3 chips, and the firm believes that the AI5 chips will be its most advanced processors that might also be subject to US export controls. Musk shared a few details about them during Tesla's latest earnings call, where he commented that the chip should "hopefully be in volume production around the end of next year."
Hardware upgrades have been a contentious issue on Teslas as cars launched with older chips have struggled to keep up with the latest full self-driving (FSD) assisted driving platform's upgrades. The A15 chips are believed to be essential for autonomous driving, and according to Musk, these chips will be manufactured by Taiwan's TSMC.
Confirming Bloomberg's report, Tesla's CEO shared that TSMC will initially make the A15 chips in Taiwan and then in Arizona. These chips "just finished design," according to Musk, with Samsung being responsible for manufacturing the AI4 processors. TSMC's Arizona site is the firm's most advanced manufacturing facility and is currently producing chips on the N4 process technology family.
The AI5 chip is believed to be made on the 3-nanometer process technology family, with unconfirmed reports suggesting that the inference computer could perform as many as 2,500 trillion operations per second. Crucially, the A16, now confirmed to be manufactured by Samsung, is expected to serve as a unifying platform for the inferential requirements of Tesla's cars and the Optimus humanoid robots.
Musk added that Samsung will make Tesla's next-generation A16 chips. "The strategic importance of this is hard to overstate," he said, outlining that "Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency." Allowing Tesla to assist it with chip production was an important factor in the deal, according to Musk, since not only will he "walk the line personally to accelerate the pace of progress," but "the fab is conveniently located not far from" his house in Texas. Musk has established Texas as his operational base due to its proximity to SpaceX's Boca Chica site, where his rocket company is developing the world's largest rocket, Starship, for interplanetary spaceflight missions.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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