Tesla CEO Elon Musk said the U.S. automaker had signed a $16.5 billion deal to source chips from Samsung Electronics , a move expected to bolster the South Korean tech giant’s loss-making contract manufacturing business. Samsung shares soared nearly 7% after news of the deal on Monday which comes as the world’s top memory chip maker faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix. Musk said Samsung’s new chip factory in Taylor, Texas will make Tesla’s next-generation AI6 chip, potentially re-energizing the project that has faced long delays amid Samsung’s difficulties in retaining and attracting major clients. “Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house,” Musk said in a post on X on Monday. “The $16.5B number is just the bare minimum. Actual output is likely to be several times higher,” he said in another post. Shares of Samsung jumped 6.8% to their highest since September last year, while Tesla shares were up 1.9% in U.S. pre-market trading. According to a senior analyst at NH Investment & Securities, Ryu Young-ho, Samsung’s Taylor fab “so far had virtually no customers, so this order is quite meaningful,” although the deal may represent a small portion of its logic chip revenue annually. In October, Reuters reported that Samsung had postponed taking deliveries of ASML chipmaking equipment for its Texas factory as it had not yet won any major customers for the project. It has already delayed the plant’s operational start to 2026.

Full report : Samsung unveils a $16.5B chip deal with Tesla that runs through the end of 2033; Elon Musk says the deal is to make Tesla’s next-gen AI6 chips in Taylor, Texas.