Samsung Shares (005930) Rally on $16.5 Billion Tesla Chip Deal

Samsung Electronics shares (KRX:005930) jumped 6.83% today following the announcement of a $16.5 billion agreement to supply chips to Tesla, a major win for its semiconductor division. The long-term contract, running from July 24, 2025, to December 31, 2033, has injected fresh optimism into the stock.

The news propelled Samsung's stock on the Korean Exchange to 70,400 KRW, also helping the KOSPI Index to close out the day above 3,200

This agreement will have Samsung manufacture Tesla's next-generation AI6 chip at its new facility in Taylor, Texas. Elon Musk confirmed the partnership, emphasizing the strategic importance of the deal for Tesla's autonomous driving systems, humanoid robotics, and AI model training.

The contract is a significant boost to Samsung's foundry business, which has been striving to compete with industry leader TSMC. Analysts believe that this partnership will help Samsung improve chip yields and attract more global clients.

“Samsung's giant new Texas fab will be dedicated to making Tesla's next-generation AI6 chip. The strategic importance of this is hard to overstate,” stated Elon Musk, highlighting the significance of the partnership.

Analysts view this partnership as a significant step for Samsung, allowing it to gain experience in cutting-edge 2nm chip technology and improve its competitive position in the contract chipmaking industry. However, profitability concerns linger due to yield challenges at the Taylor plant.