Sammy Wins One
Samsung Electronics (005930.KS) announced that it had received a semiconductor contract with an undisclosed “large global company” worth 22.764 trillion won or ~$16.544 billion US. The value of the contract is equal to 7.6% of Samsung’s sales in 2024 and will run from 7/24/25 to 12/31/33. While details were not given in the Samsung release, speculation is that Tesla (TSLA) is the customer and Elon Musk confirmed that Samsung is currently producing the A14 chip (7nm) and will be producing the A16 (2nm), although TSMC (TSM) will be producing the A15 (3nm), which has just completed the design phase in Taiwan and Arizona and is slated for production late next year.
The A16 is expected to be produced at Samsung’s Taylor, Texas fab, which is scheduled to begin production in 2H next year. The Tesla A16 evaluation is loosely scheduled for 2H 2027. Interestingly, Musk indicated that one factor in the contract decision was the fact that Samsung agreed to allow Tesla to assist in “maximizing manufacturing efficiency” at the fab. Musk indicated, “I will walk the line personally to accelerate the pace of progress as the fab is conveniently located not far from my house.” (~40mi from what we can see). While the contact amount was specified in the formal release, Musk indicated that it was a ‘minimum’ and gives Samsung’s new fab a substantial revenue base.
The A16 is expected to be produced at Samsung’s Taylor, Texas fab, which is scheduled to begin production in 2H next year. The Tesla A16 evaluation is loosely scheduled for 2H 2027. Interestingly, Musk indicated that one factor in the contract decision was the fact that Samsung agreed to allow Tesla to assist in “maximizing manufacturing efficiency” at the fab. Musk indicated, “I will walk the line personally to accelerate the pace of progress as the fab is conveniently located not far from my house.” (~40mi from what we can see). While the contact amount was specified in the formal release, Musk indicated that it was a ‘minimum’ and gives Samsung’s new fab a substantial revenue base.
Figure 1 - Samsung Taylor, Texas fab site - Source: Google Earth
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