Musk confirms Tesla-Samsung mysterious chip supply deal

In a significant move, Tesla CEO Elon Musk has confirmed that the company has signed a chip supply agreement with Samsung Electronics, a development expected to strengthen Samsung’s struggling chip contract manufacturing unit.

This confirmation follows the South Korean tech giant’s recent announcement of a $16.5 billion contract with an unnamed global client, which will run through the end of 2033.

Although Samsung did not disclose the client’s identity due to confidentiality terms, Reuters reported that Tesla is indeed the company involved.

This agreement arrives at a critical time for Samsung, which is under increasing pressure to compete in the rapidly evolving artificial intelligence (AI) chip market.

The company currently lags behind competitors such as Taiwan’s TSMC and local rival SK Hynix, a disadvantage that has impacted both its profit margins and market performance.

As the world’s leading memory chip manufacturer, Samsung also operates a foundry business that produces logic chips based on customer designs.

Analysts believe this Tesla deal could help offset the division’s substantial losses, which reportedly exceeded KRW 5 trillion in the first half of 2025.

Moreover, the partnership holds broader geopolitical significance.

As South Korea pushes for stronger technological ties with the United States, deals like this could play a role in upcoming trade negotiations aimed at easing potential 25% US tariffs on Korean exports.