Samsung confirms it will start mass producing Tesla, Inc. (TSLA.US) chips in the United States in 2027, with a $16.5 billion order boosting its contract manufacturing business.

Samsung Electronics has confirmed plans to mass-produce Tesla, Inc.'s chips at its factory in Texas starting in the second half of 2027. This deal will boost Samsung's OEM business unit and support Tesla, Inc.'s ambitions in the field of artificial intelligence. Han Jin-man, head of Samsung's OEM business, shared this latest development at a shareholder meeting held in Suwon, south of Seoul. Earlier, Elon Musk announced in July last year that Samsung's new wafer plant in Texas would be dedicated to producing Tesla, Inc.'s next-generation AI chips, such as the AI6. Shortly afterwards, the South Korean giant confirmed signing a $16.5 billion semiconductor supply contract, lasting until 2033, focusing on Tesla, Inc.'s autonomous driving technology. At last year's shareholder meeting, Samsung Electronics Vice Chairman and Co-CEO, head of the chip business, Koh Young-hyun, apologized for Samsung's initial missed opportunity in the AI chip market, which had led to a drop in stock prices and profits; he had tried to appease disappointed shareholders at the time. But the situation has since improved. Following a significant increase on Tuesday, Samsung's stock price rose by 5.3% on Wednesday. Previously, NVIDIA Corporation CEO Jensen Huang had stated that the South Korean company was producing NVIDIA Corporation's new AI chips. Analysts say Huang's comments have increased market expectations for Samsung's OEM division. This division manufactures logic chips for Tesla, Inc., Apple Inc., and Samsung's mobile division, and after suffering losses of billions of dollars annually in recent years, it is expected to return to profitability as early as next year.