Samsung to Begin Producing Tesla Chips in Late 2027

Samsung to Begin Producing Tesla Chips in 2027

March 18, 2026

Samsung Electronics has announced plans to begin mass production of advanced semiconductor chips for Tesla starting in the second half of 2027, marking a major step in the deepening partnership between the South Korean technology leader and the U.S.-based electric vehicle manufacturer.

The announcement was made by Han Jin-man, President and Head of Samsung’s Foundry Business, during a shareholders’ meeting. The chips will be manufactured at Samsung’s semiconductor facility in Texas, a key site in the company’s push to expand its contract chipmaking operations in the United States.

Strengthening a Strategic Partnership

The move builds on a multi-billion-dollar agreement between the two companies to produce Tesla’s next-generation artificial intelligence (AI) chips. Industry reports indicate the deal could be worth around $16.5 billion, making it one of the largest chip supply agreements for Samsung’s foundry division.

These chips are expected to power Tesla’s future technologies, including self-driving systems, robotics, and AI data centers, as the company accelerates its ambitions in autonomous driving and artificial intelligence.

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Timing Aligns With Tesla’s Chip Roadmap

The 2027 production timeline aligns with Tesla’s broader chip development plans. Upcoming generations of Tesla-designed processors—such as AI5 and AI6—are expected to roll out in the coming years, with manufacturing shared between Samsung and other chipmakers to ensure supply stability.

At the same time, Tesla is exploring greater vertical integration in semiconductor manufacturing. CEO Elon Musk recently highlighted concerns about future chip shortages and revealed plans for a large-scale in-house chip fabrication initiative, underscoring the strategic importance of securing supply.

Boost for Samsung’s Foundry Business

For Samsung, the deal represents a significant opportunity to strengthen its position in the global semiconductor foundry market, where it competes with industry leader TSMC. The company has been seeking high-profile clients to improve utilization and profitability in its chip manufacturing division.

Securing Tesla as a long-term customer not only enhances Samsung’s credibility in advanced chip production but also supports its broader strategy to expand manufacturing capacity in the U.S. in response to increasing geopolitical pressures and supply chain disruptions.

Industry Implications

The partnership highlights the intensifying competition among automakers and tech companies to secure advanced semiconductors, which are critical for AI-driven applications. As demand for high-performance chips continues to surge, collaborations like Samsung–Tesla are expected to play a pivotal role in shaping the future of both the automotive and semiconductor industries.