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Samsung wins contract to make A16 chip for Tesla vehicles

The US$16.5 billion (roughly C$22.5 billion) deal will see Samsung make the chips at its Texas plant

Jul 28, 20254:20 PM EDT |

Elon Musk, the founder and CEO of Tesla, announced in a post on X (better known as Twitter) that Samsung will manufacture Tesla’s next-generation A16 chips.

This deal will run through 2033 and use a new chip plant in Taylor, Texas. Per a Samsung contract spotted by Engadget, the deal is worth ₩22.8 trillion, or about US$16.5 billion (roughly C$22.5 billion).

Samsung previously delayed the plant’s opening to 2026 over a lack of customers. The deal with Tesla marked a significant turning point for the plant.

Tesla’s semi-autonomous driving technology is powered by the A14 chips that Samsung also manufactures. Samsung lost the contract for the A15 chip, which instead went to Taiwan Semiconductor Manufacturing Company (TSMC), one of Samsung’s biggest competitors. Musk claims TSMC just recently finished the design of the chip.

Musk followed up with a second post saying that the contract for the A16 chips was acquired under the pretense that Samsung would allow Tesla to oversee the manufacturing and assist in maximizing manufacturing efficiency.

Musk added that he would personally walk the line to ensure everything was going smoothly and to “accelerate the pace of progress,” noting that the plant was not far from his home.

Source: Elon Musk (@elonmusk)

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