Erencan YılmazSamsung Foundry’s position in the semiconductor landscape may be shifting in a significant way. Their recent $16.5 billion contract with Tesla to produce next-generation AI6 chips isn’t just a headline; it’s a technical and strategic inflection point. Now, fresh reports out of South Korea are suggesting Samsung could be in line for another large-scale manufacturing agreement with xAI, Elon Musk’s AI startup.
AI allows Samsung Foundry to generate significant profits
The current state of the AI industry is driving unprecedented demand for custom silicon, especially application-specific integrated circuits (ASICs) designed to handle the massive computational requirements of modern AI workloads. Companies like xAI and OpenAI are investing heavily in designing and developing proprietary chips, but this is only half the battle; fabrication at scale demands a foundry partner with both advanced process technology and proven reliability. The fact that xAI is actively recruiting for custom silicon developers is a strong indicator that they’re moving toward in-house hardware solutions.
Samsung Foundry is uniquely positioned here. Elon Musk has repeatedly vouched for Samsung’s semiconductor capabilities, even after the initial skepticism that surfaced following the Tesla deal’s announcement. Musk has publicly stated that the $16.5 billion Tesla contract represents only a “bare minimum,” with the potential for a much larger engagement as the partnership progresses. This level of executive buy-in, coupled with Samsung’s willingness to collaborate on process optimization, makes them a logical contender for xAI’s fabrication needs.
From a business perspective, securing a deal with xAI would be a significant validation of Samsung’s process technology and manufacturing roadmap. The foundry division has historically trailed TSMC in both market share and client acquisition, but the Tesla agreement marked a tangible shift. Closing a second major contract with xAI would suggest that Samsung is no longer a secondary player in the high-end AI chip sector.
A key technical advantage for Samsung is its upcoming 2nm fabrication facility in Taylor, Texas. With U.S. policymakers prioritizing domestic semiconductor production, this fab is strategically located to attract American clients. Production of Tesla’s AI6 chips is already scheduled to begin there in 2026. If xAI also moves forward with Samsung, the Texas plant could serve as a dual-source hub for Musk’s ecosystem of AI-driven technologies.
Source: BusinessPost
