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Samsung to Produce Tesla Chips in $16.5 Billion Multiyear Deal

I do not think Elon Musk and Lip-Bu Tan would be good business partners for this kind of venture. Vey different business styles and personalities. Unless Musk bought Intel outright and mushed it into his xAI conglomeration. It also said the deal was signed before Lip-Bu took over.

“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,” Musk said on X, and suggested that the deal with Samsung would likely be even larger than the announced $16.5 billion.

I have not done the math but it is hard to believe that Tesla will buy that many wafers. Maybe his xAI will be involved as well? And SpaceX? I also question having Elon Musk next door and him the walking manufacturing line. It sounds disruptive but not in a good way. Elon seems to chase shiny things.

If you compare this to the deal Apple did with TSMC it would probably be a complete opposite. Maybe Elon will fall in love and buy Samsung Foundry like he did with Twitter? Twitter lost $1.1B prior to the acquisition in Q4 2022.

Samsung Foundry did $18B last year but how much of that was internal Samsung? Operating loss was $2.4B in 2024 and $3.6B in 1H 2025. Sounds like it is ready for a Musk makeover! :ROFLMAO:

Assuming it costs $20,000 for a 12-inch Samsung wafer with 300 dies per wafer, a $16.5 billion contract would produce 247,500,000 final chips over the 8-year period, assuming a 100% yield.

If we drop the die count to 200 per $20,000 wafer, then $16.5 billion would yield 165,000,000 chips over the same period.

Even if we assume a 70% yield and that each car uses 2 chips, these numbers still seem unrealistically high. Tesla sold only 1.79 million cars in 2024 and 1.8 million in 2023. The potential chip output implied by the Samsung contract appears disproportionate to Tesla’s actual car production volumes. That suggests this $16.5 billion contract is likely not just for automotive chips. Or am I missing something?


My calculations (assuming $20,000 per wafer, 70% yield, and 2 chips per car):

  • 300 dies per wafer:
    300 × ($16.5B / $20,000) = 247,500,000 chips
    (247,500,000 × 70%) / 2 = 86,625,000 cars over 8 years → 10,828,125 cars/year

  • 200 dies per wafer:
    200 × ($16.5B / $20,000) = 165,000,000 chips
    (165,000,000 × 70%) / 2 = 57,750,000 cars over 8 years → 7,218,750 cars/year
 
Yes, this is what I meant about Tesla wanting a lot of control over how suppliers do things. They will send their engineers to supplier factories and everyone, both Tesla engineers and suppliers will be forced to work 24/7 on anything that is causing an issue. Samsung will be giving up a lot of operational control and potentially will risk a lot of IP exposure.

Tesla will also strong arm Samsung at every turn, withhold payments over minor issues, threaten lawsuits constantly, steal company secrets, ect. I've consistently seen this kind of behavior from Tesla people firsthand. Samsung will probably end up regretting this.

Source from Korean Media


Google translate:

"Recently, Samsung Electronics has taken advantage of TSMC's lack of capacity (CAPA, production capacity) to secure a small amount of orders for the 3nm and below advanced processes. If 95% is entrusted to TSMC, the remaining 5% is to be entrusted to Samsung Electronics. However, it has been reported that even this 5% is likely to be transferred back to TSMC due to yield issues."



Is it possible that Elon Musk wants to get into semi business since Tesla business is NOT booming? "If tiny island Taiwanese can do it, why can't I, with money and man power?" Maybe he will buy out Samsung USA, xx cent on the dollar, if Samsung does not meet the contract terms.

Samsung, between the rock and hard place, is so desperate to drink the poison to quench the thirst.
Since when did Elon Musk or Tesla become a semiconductor manufacturing guru?
It's also interesting to know what kind of people in charge and sent to Samsung, H1B workers from China? Both Elon Musk & current Korean administration are Pro-China? "明修棧道,暗渡陳倉"?
 
Assuming it costs $20,000 for a 12-inch Samsung wafer with 300 dies per wafer, a $16.5 billion contract would produce 247,500,000 final chips over the 8-year period, assuming a 100% yield.

If we drop the die count to 200 per $20,000 wafer, then $16.5 billion would yield 165,000,000 chips over the same period.

Even if we assume a 70% yield and that each car uses 2 chips, these numbers still seem unrealistically high. Tesla sold only 1.79 million cars in 2024 and 1.8 million in 2023. The potential chip output implied by the Samsung contract appears disproportionate to Tesla’s actual car production volumes. That suggests this $16.5 billion contract is likely not just for automotive chips. Or am I missing something?


My calculations (assuming $20,000 per wafer, 70% yield, and 2 chips per car):

  • 300 dies per wafer:
    300 × ($16.5B / $20,000) = 247,500,000 chips
    (247,500,000 × 70%) / 2 = 86,625,000 cars over 8 years → 10,828,125 cars/year

  • 200 dies per wafer:
    200 × ($16.5B / $20,000) = 165,000,000 chips
    (165,000,000 × 70%) / 2 = 57,750,000 cars over 8 years → 7,218,750 cars/year
This chip will be used in Tesla humanoid robots. Musk said the volume could be over 10 million annually in 2027. I don’t believe that at all.
 
This chip will be used in Tesla humanoid robots. Musk said the volume could be over 10 million annually in 2027. I don’t believe that at all.


Samsung needs at least one to two years to fully equip the Taylor, Texas fab and complete configuration, integration, testing, and pilot runs. Targeting 2027 for high volume production is a very aggressive goal.
 
Source from Korean Media


Google translate:

"Recently, Samsung Electronics has taken advantage of TSMC's lack of capacity (CAPA, production capacity) to secure a small amount of orders for the 3nm and below advanced processes. If 95% is entrusted to TSMC, the remaining 5% is to be entrusted to Samsung Electronics. However, it has been reported that even this 5% is likely to be transferred back to TSMC due to yield issues."



Is it possible that Elon Musk wants to get into semi business since Tesla business is NOT booming? "If tiny island Taiwanese can do it, why can't I, with money and man power?" Maybe he will buy out Samsung USA, xx cent on the dollar, if Samsung does not meet the contract terms.

Samsung, between the rock and hard place, is so desperate to drink the poison to quench the thirst.

It's also interesting to know what kind of people in charge and sent to Samsung, H1B workers from China? Both Elon Musk & current Korean administration are Pro-China? "明修棧道,暗渡陳倉"?

The following is an interesting Q&A conversation during recent TSMC Q2 2025 earnings call. I believe the particular TSMC customer mentioned is Tesla.

"Brad Lin - Bank of America - Analyst

I have two questions. My first one is on the humanoid robot. So we have learned that humanoid robot started to contribute to TSMC, and it is gaining momentum as the next frontier of the AI hardware. How does TSMC evaluate the market size of humanoid robot in the semiconductor and in terms of the potential market TAM, compute, and also sensor requirements? And do you think that might be another driver potentially for mature nodes, too?

Jeff Su - Taiwan Semiconductor Manufacturing Co Ltd - Director of Investor Relations

Okay. Thank you, Brad. So Brad's first question is around humanoid robots. We're starting to see some contribution. He wants to understand how do we evaluate the market size. What is the addressable opportunities for TSMC in the long term at the leading edge and also on the mature nodes with certain type of specialty?

C.C. Wei - Taiwan Semiconductor Manufacturing Co Ltd - Chairman and Chief Executive Officer

Brad, it's too early. Actually, it's too early to say the humanoid robot will play a role in this year. Next year, probably it's still too early because it's so

complicated. You know that the humanoid robot, well, most of the time will be used -- I think the first one will be used in medical industry to take care of the people getting old like me. And probably someday, I need some humanoid robot to help me.
But it's very complicated because we are talking about the brain only, actually, you're talking about a lot of sensor technology, that's the image sensor, the pressure sensor, the temperature sensor, and all the feedback to the CPU. And so it's very complicated.

And since it's dealing with human being directly, it has to be very, very careful. But then once they start to fly, it was a big, big plus. I talked to one of my customers, and he said that the EV car is nothing, his robot will be 10 times of that. I'm waiting for that. Okay.

Did that answer your question?

Brad Lin - Bank of America - Analyst

Yes, yes. I believe the client definitely owns EV cars and robots, too, so he knows it well.

So my second question will be on the potential pulling ahead of the so-called reflecting the value into 2026. So we know, well, normally, we continue to reflect the value into our pricing. So given the potentially higher pricing into 2026, are you observing any signs of demand pulling from the customers in the second half of the year?

And potentially, well, given the tight pipeline of N3 and N5, will we see a continued strength into 4Q, even though we already guided potential
decline, but yeah, any pulling in potentially?

Jeff Su - Taiwan Semiconductor Manufacturing Co Ltd - Director of Investor Relations

Okay. Brad, second question, very specifically, he's asking as C.C. talked about that we will continue to earn our value, do we see any customers trying to pull in their demand ahead of 2026 into the second half of this year? And do we have any additional comments to offer on the fourth quarter besides what we have already shared?

C.C. Wei - Taiwan Semiconductor Manufacturing Co Ltd - Chairman and Chief Executive Officer

Well, the answer is no. We do not see any different customers or behavior so far, okay? But let me share with you and add more color. If you are talking about the 3-nanometer's demand, for example, the cycle time itself will take about four months. So there's no way you can pull in anything. I mean that's -- yeah, and we have -- as I said, our capacity is very, very tight. So we already have all the schedules. And so very little room for pull-in, let me say that, even they want it. But, No. The answer is no. So 2026 is 2026, we will share with you."
 
I do not think Elon Musk and Lip-Bu Tan would be good business partners for this kind of venture. Vey different business styles and personalities. Unless Musk bought Intel outright and mushed it into his xAI conglomeration. It also said the deal was signed before Lip-Bu took over.

“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,” Musk said on X, and suggested that the deal with Samsung would likely be even larger than the announced $16.5 billion.

I have not done the math but it is hard to believe that Tesla will buy that many wafers. Maybe his xAI will be involved as well? And SpaceX? I also question having Elon Musk next door and him the walking manufacturing line. It sounds disruptive but not in a good way. Elon seems to chase shiny things.

If you compare this to the deal Apple did with TSMC it would probably be a complete opposite. Maybe Elon will fall in love and buy Samsung Foundry like he did with Twitter? Twitter lost $1.1B prior to the acquisition in Q4 2022.

Samsung Foundry did $18B last year but how much of that was internal Samsung? Operating loss was $2.4B in 2024 and $3.6B in 1H 2025. Sounds like it is ready for a Musk makeover! :ROFLMAO:

Maybe Tesla will pay using carbon credits!
 
I am struck by how people think that Intel "Missed" the opportunity.

Intel tied for this as hard as they could. Tesla chose Samsung. I'm not sure it was a very dificult choice

If we assume Pay wasnt incorrect when stating every customer was running text chips or looking at Intel years ago, then it is now clear everyone looked at Intel and chose someone else.
Yes. During PG era , IFS is already courting Tesla.
Anyway, I think allowing Elon Musk to go to the fab and make amendments is problematic. Other customers designs are being manufactured there and there could be privacy issues. Also, aligning the process flow for Tesla products could also impact the production of other customers’ products. So I don’t think that is acceptance to TSMC and in some extent for IFS as well.
Ben Thompson wrote a quick piece on IFS saying Intel methodology of building BSPDN from the power layer first then logic area will likely result in very low yield. So yield would likely play a part there as well.
 
The scale-up of 2nm in Taylor will be similar to the scale-up of Model 3 in Gigafactory--very hard. The Model 3 scale-up went well. Musk involvement in Taylor scale-up should be beneficial, since he lived the scale up life and is eager, strangely, to repeat it.

This question is, why get involved this way? The 2026 date is the reason. With $16.5B you purchase the pressure to deliver sooner.

Some commenters are commenting that a truly functional robotaxi requires AI6. Tesla is looking past AI5, which hasn't arrived yet, already. AI4 robotaxi is just meh, Elon knows it, this is the solution.
 
Last edited:
The scale-up of 2nm in Taylor will be similar to the scale-up of Model 3 in Gigafactory--very hard. The Model 3 scale-up went well. Musk involvement in Taylor scale-up should be beneficial, since he lived the scale up life and is eager, strangely, to repeat it.

This question is, why get involved this way? The 2026 date is the reason. With $16.5B you purchase the pressure to deliver sooner.

Some commenters are commenting that a truly functional robotaxi requires AI6. Tesla is looking past AI5, which hasn't arrived yet, already. AI4 robotaxi is just meh, Elon knows it, this is the solution.
These are indisputable facts of Musk Life: overconfidence and exaggeration.

Apply that to this announcement as you please.

But Musk is not sleeping on any Samsung factory floor to push it through “manufacturing hell”. Nanotechnology ain’t your typical manufacturing…

Good luck to Samsung dealing with this partner. I can’t wait for the mudslinging on X in a couple of years when yields don’t hit their mark.
 
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