Samsung Electronics has achieved a turning point in its foundry business after winning a semiconductor consignment production (foundry) contract from Tesla worth ₩22.7647 trillion (approximately $16.54416 billion). The contract outlines the production of Tesla's next-generation autonomous driving and humanoid robot AI chip, the 'AI6', using Samsung's 2-nanometer process until 2033. This is the largest single-client contract in Samsung's semiconductor history, a massive deal that accounts for over 20% of Samsung Electronics' semiconductor division revenue last year.
Tesla Acknowledges Samsung Foundry's Technological Prowess
This contract is expected to be an opportunity to resolve the market's distrust in the technological capabilities of Samsung's foundry business. Until now, Samsung Electronics has struggled to secure large clients due to issues with low yield rates. However, with Tesla, one of the world's leading technology companies, deciding to entrust Samsung with its cutting-edge 2-nanometer process, doubts about Samsung's technology have been dispelled.
In particular, while Tesla contracted its rival TSMC to produce the AI5 chip using an older 3-nanometer process, the fact that it entrusted Samsung with the production of the latest 2-nanometer AI6 chip is interpreted as proof of Samsung Foundry's technological superiority. An industry insider stated, "Passing the rigorous verification process of Tesla, which is very strict in selecting suppliers, means that Samsung Foundry's technological capabilities have recovered enough to secure orders from big tech companies again."
Achieving Both 'Technological Recovery' and 'Business Normalization'
This contract is seen as a way for Samsung Electronics to "kill two birds with one stone" by achieving both 'technological recovery' and 'foundry business normalization.' There is a strong possibility that Samsung, which has been grappling with yield issues, has now secured a giant client like Tesla and has been able to boost its 2-nanometer process yield to the same level as TSMC's, around 60%.
Elon Musk, Tesla's CEO, announced the contract on his X (formerly Twitter) account and mentioned that "the actual production scale is likely to be several times larger," which raises expectations for additional orders. In line with Tesla's strategy of using multiple suppliers to secure price negotiation power and supply chain stability, Samsung Electronics is expected to reduce its foundry business deficit by securing a stable volume of orders.
Gaining Momentum for Additional Clients
The contract with Tesla has revitalized Samsung Electronics' foundry business. With its cutting-edge process technology now recognized, the company is expected to gain momentum in attracting additional clients. Samsung Electronics is in discussions to secure some of the production volume for Qualcomm's next-generation mobile application processor (AP), the 'Snapdragon 8 Elite 2', using its 2-nanometer process. The 'Exynos 2600', which is to be installed in the Galaxy S26 series to be released next year, is also highly likely to be produced on the 2-nanometer node.
In addition, construction of the new foundry factory in Taylor, Texas, which was temporarily suspended last year, has now resumed. Samsung Electronics has begun the cleanroom finishing work and is expected to start full-scale mass production preparations in the second quarter of next year. The large-scale contract from Tesla has allayed concerns about the Taylor factory investment and has laid the groundwork for its stable operation. This contract is expected to be a major turning point that brings to fruition Samsung Foundry's long-held ambition of securing a large client, thereby elevating Samsung Electronics' status in the global foundry market.
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