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Tesla has inked a monumental $16.5 billion deal with South Korea’s Samsung Electronics to secure a long-term supply of advanced semiconductor chips, a move that underscores the electric vehicle (EV) maker’s aggressive push to shore up its technology pipeline and production stability.
The agreement, one of the largest of its kind in the auto industry, will see Samsung supply Tesla with next-generation chips critical for autonomous driving, AI-powered vehicle systems, and overall EV performance. This multi-year contract is expected to significantly strengthen Tesla’s supply chain resilience and accelerate its roadmap for full self-driving capabilities.
The deal also signals Samsung’s growing footprint in the automotive semiconductor market, as it competes with rivals like TSMC and Intel to meet rising demand from automakers racing toward smarter, software-defined vehicles.
Elon Musk, Tesla’s CEO, hailed the partnership as “a crucial step forward in building the world’s most advanced and reliable EVs,” while Samsung described it as a “strategic collaboration aligned with the future of mobility.”
Production of the chips is set to begin in Samsung’s state-of-the-art foundries in South Korea and Texas, with initial deliveries scheduled for early 2026.
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