Samsung has long been criticized for being dead freaking last when it comes to making AI chips. While Taiwan Semiconductor (TSMC) is out here owning two-thirds of the global foundry market (with Apple, Nvidia, AMD, and Qualcomm all throwing money at them) Samsung’s been stuck in dead last.

Even SK Hynix leapfrogged them in the high-bandwidth memory (HBM) game. They’re currently the top supplier of HBM to Nvidia… the company driving most of the AI chip demand in the world right now. Meanwhile, Samsung’s still fumbling around trying to get its HBM3E certified by Nvidia… and that’s reportedly been delayed (again) until at least September. (At this point, the only thing they’re shipping on time is disappointment.)

Because of this, even Micron is also pulling ahead (pretty embarrassing, for a tech company that’s been around longer than McDonald’s (look it up, it’s true). So yeah… everyone’s running circles around Samsung. And they’ve been out here trying to chase AI momentum with a brick tied to their ankle.

Even worse, their foundry business (aka the part of Samsung that manufactures chips designed by other companies) has been an absolute joke. We’re talking $3.6 billion in losses in just the first half of 2025. And their new chip plant in Taylor, Texas has been sitting there collecting dust and excuses, like a $17 billion ghost town. Things got so bad, Samsung actually postponed delivery of critical equipment from ASML… not because of supply chain issues, but because they literally had no customers lined up to use it. (If you think about it, that’s like building out a high-end restaurant, hiring the staff, prepping the menu… and then forgetting to tell anyone it exists.)

Needless to say, the stock’s down 13% year-to-date. And with earnings dropping this Thursday (where they're expected to announce a 56% plunge in quarterly profit) they needed something to distract shareholders and fast.

So what do you do when you’re in last place, your $17B chip factory looks like an abandoned scene from The Walking Dead, and your earnings report is about to read like a corporate autopsy? You call Elon Musk. And that’s exactly what they did. Now, Samsung technically kept the deal under wraps in its regulatory filing… citing the customer’s request for confidentiality to “protect trade secrets.” But I’m sure they couldn’t wait for Elon to spill the beans himself. That way, they wouldn’t risk irritating Tesla and still get the stock-moving headline they so badly needed.

And right on cue, Elon jumped on X and confirmed the whole thing. Tesla signed a $16.5 billion deal with Samsung to produce its next-gen AI6 chips, the brains behind Tesla’s future Full Self-Driving tech.

(Source: CNBC)

So yeah… Samsung didn’t say it. But they didn’t have to. Elon handled the marketing, gave Wall Street the dopamine hit, and let Samsung play the cool, discreet business partner. A win-win… especially when your company needs a huge distraction headed up to earnings..

The chips will be built at Samsung’s Taylor, Texas plant… the same one that’s been sitting mostly idle and happens to be just a short drive from Elon’s house (how convenient). Musk also said Tesla will help “maximize manufacturing efficiency” and that he’ll be personally “walking the line” to accelerate production (translation: expect lots of X posts from inside a cleanroom he’s probably not supposed to be in).

Also (and this is classic Elon) in regards to the $16.5 billion? That’s just the starting point. Musk hinted that the actual value could be “several times higher” (which is probably what he told Grimes when pitching the Mars colony too).

Make no mistake… this is a huge win for Samsung. Not because it suddenly turns them back into a tech juggernaut (like they were 20 years ago), but because it finally gives them something they’ve been desperately lacking: you know… a narrative. A distraction. A new headline to point at instead of having to explain their burning foundry division and slipping chip dominance.

And investors? Eating it up. Samsung’s stock jumped 6% (at the time of this writing), hitting its highest level since September 2024. That makes today their best day of the year… and for once, it didn’t involve falling even further behind TSMC (so… baby steps).

That said (and it’s a big “but”) this isn’t gonna be some magical overnight turnaround. Let’s not forget: AI5, the chip Tesla’s currently having TSMC manufacture, isn’t even in production yet. AI6, the one Samsung just landed? Analysts don’t expect meaningful volume until 2027 or 2028, assuming nothing breaks, catches fire, or gets delayed into the next fiscal dimension (which, given Tesla timelines, is very much on the table).

And don’t forget: Samsung was practically rattling a tin cup to get someone (anyone) to use that Texas fab. Before Tesla showed up, the place was just burning electricity to keep the lights on for no one. This deal? It puts a tourniquet on the wound, sure. But it’s not exactly open-heart surgery… the real problems are still ticking underneath.

Still, when you've been the awkward third (or fourth) wheel in the AI chip boom, a Tesla partnership is still worth celebrating. If Musk can deliver (a big if), this deal could finally give Samsung a foothold in a market that’s been dancing out of reach for years.

But earnings come Thursday. And no billion-dollar tweet can cover up the fact that Q2 was a mess. Samsung’s best hope? That investors are more interested in what 2033 could look like… than what 2025 really is.

At the time of publishing this article, Stocks.News holds positions in Apple, McDonald’s, and Tesla as mentioned in the article.