Samsung Electronics shares surged Monday after the company secured a landmark $16 billion agreement to supply advanced artificial intelligence (AI) chips to Tesla, marking one of the largest semiconductor deals in recent years. The long-term contract centers on chip production at Samsung’s Taylor, Texas, factory, bolstering its role in the rapidly growing AI and electric vehicle sectors.
According to KXAN, the deal positions Samsung as a primary chip supplier for Tesla’s next-generation autonomous driving systems and AI-driven vehicle platforms. Production is expected to ramp up in 2026 once Samsung completes a major expansion of its Taylor facility, a project already valued at $25 billion.
Samsung stock climbed more than 4% in early Seoul trading following the announcement, reflecting investor optimism over the company’s strengthened foothold in the high-demand AI chips market. Industry analysts told CNBC the partnership could enhance Samsung’s competitiveness against major rivals like Taiwan Semiconductor Manufacturing Company (TSMC) and Intel.
Major Investment in U.S. Chip Manufacturing
The Taylor factory, located near Austin, has become a critical hub for Samsung’s U.S. semiconductor strategy. With the new Tesla agreement, the facility will focus on manufacturing cutting-edge AI chips designed to handle complex neural network processing for autonomous driving technology.
“Tesla’s collaboration with Samsung will ensure a steady supply of high-performance chips needed to advance self-driving capabilities,” a source familiar with the deal told Yahoo Finance. “This is a long-term strategic move for both companies in the race for AI-driven vehicle innovation.”
The announcement comes as global chipmakers accelerate U.S. investments amid government incentives and growing demand for domestically produced semiconductors. Samsung has already committed billions to expand its U.S. chip operations, aligning with broader federal efforts to strengthen American chip supply chains.
Market and Industry Impact
The $16 billion contract underscores Tesla’s increasing reliance on external chipmakers as it scales its AI capabilities. Analysts say the agreement may also fuel broader investor confidence in Samsung stock as the company secures high-value contracts outside traditional smartphone and consumer electronics markets.
“This is a transformative moment for Samsung’s semiconductor division,” said tech market analyst Brian Cole. “Winning a contract of this magnitude with Tesla could signal further opportunities in automotive AI chips and next-gen computing.”
Shares of Samsung Electronics closed Monday at their highest level in nearly two years, reflecting optimism over future revenues tied to AI chip production and the Taylor plant’s growing strategic importance.
The Tesla partnership is expected to run for multiple years, with initial shipments anticipated in late 2026 following the completion of the Taylor factory’s expansion phase.
