With Tesla's AI5 set for Samsung Foundry, hopes of rebound for chipmaker rise

Home > Business > Industry

With Tesla's AI5 set for Samsung Foundry, hopes of rebound for chipmaker rise

Published: 26 Nov. 2025, 14:24 Updated: 26 Nov. 2025, 16:09

LEE JAE-LIM
[email protected]

Audio report: written by reporters, read by AI

Samsung Electronics' Hwaseong chip complex in Gyeonggi [SAMSUNG ELECTRONICS]

[NEWS ANALYSIS]

Tesla’s AI5 chip order is set to enter the prototype stage, with part of the production slated for Samsung Electronics’ Hwaseong semiconductor campus in Gyeonggi, a development that could provide the momentum Samsung Foundry needs to reach profitability sooner than expected in 2027.

Elon Musk said via X on Monday that Tesla is “close to taping out AI5 and starting work on AI6,” referring to the stage at which chip design blueprints are handed over to a foundry to produce prototype wafers.

Musk went on to say that he expects "to build chips at higher volumes ultimately than all other AI chips combined,” emphasizing that the two generations of chips will have a far-reaching impact as they are integrated into Tesla products, including self-driving vehicles and the Optimus humanoid robot for health care applications.

An aerial view of Samsung Electronics’ Hwaseong chip complex in Gyeonggi, including the S3 line, which manufactures chips using the 3-nanometer process [SAMSUNG ELECTRONICS]

Prototype testing and initial production are expected to take place at Samsung’s Hwaseong S3 line, the company’s first 3-nanometer gate-all-around (GAA) fab and its most experienced advanced-node facility in Gyeonggi. Industry watchers say Tesla likely considers the S3 line to have reached stable yields.

Last month, Tesla began recruiting a silicon process integration engineer to be stationed in Hwaseong, acting as a technical bridge between Tesla’s chip design team and Samsung Foundry to oversee the end-to-end manufacturing process.

Samsung Foundry’s earlier-than-expected turnaround may start with Tesla
A typical tape-out–to–mass production cycle takes roughly 18 months. Musk, however, said Tesla aims to shorten that cycle by six months by bringing a new AI chip design into volume production every year.

Under the timeline Tesla outlined, AI5 chip samples will be produced next year, with mass production slated for 2027, followed by AI6 in 2028.

Tesla’s surprise decision to allocate not only AI6 but also AI5 orders to Samsung surfaced during last month’s earnings call. The two companies had initially signed a $16.5 billion deal in July centered on mass production of the AI6 chip, scheduled for Samsung’s Taylor plant once the facility begins operating next year.

Elon Musk, Chief Executive Officer of SpaceX and Tesla, gestures as he attends the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition centre in Paris, France, June 16, 2023. [REUTERS/YONHAP]

According to a source in the semiconductor industry familiar with the matter, the additional order is expected to center on chips for Tesla’s Full Self-Driving (FSD) system. Musk has previously said Tesla would overproduce AI5 chips and use the surplus in data centers.

“Tesla originally planned to source all FSD chips from TSMC, but has since decided to allocate some volume to Samsung,” the source told the Korea JoongAng Daily. “Given that shift, the chip in question is highly likely the FSD processor, not a computing chip.”

Industry analysts say this could accelerate Samsung Foundry’s return to profitability. The division has been operating in the red since 2022, with quarterly losses estimated at between 1 trillion and 2 trillion won ($682 million to $1.36 billion) due to heavy investments in advanced nodes that struggled to attract large customers.

Samsung's chip plant in Taylor, Texas, under construction in a photo provided by Samsung Electronics [SAMSUNG ELECTRONICS]

Taylor plant slated for a 2026 launch, with recruitment offering early clues
Samsung’s Taylor plant is expected to enter operation in the third quarter of 2026 — a timeline hinted at through recent job postings.

ASML, the Dutch lithography equipment maker, is assembling a team in Austin, Texas, to install and maintain extreme ultraviolet (EUV) tools at a customer site that is widely believed to be the Taylor facility.

AI6 will rely on Samsung’s 2-nanometer GAA process, which requires ASML’s most advanced EUV equipment, raising the profile of the hiring activity.

Samsung Electronics is also hiring specialists for gas and chemical systems dedicated to the Taylor T1 site, ranging from senior engineers overseeing gas infrastructure of the foundry to technicians managing chemical delivery systems for wafer processing.

Tesla’s supply deal has ended a long stretch of inactivity for Samsung’s U.S. foundry operations and is now propelling construction in Taylor. The automaker also becomes the site’s first anchor customer, while Tesla gains access to a second advanced-node foundry at a time when TSMC’s capacity is heavily booked up by Nvidia and Apple.

This foothold could help Samsung attract additional U.S. customers, Google and Meta, especially as TSMC is reportedly preparing wafer price hikes for its 2-nanometer process.

BY LEE JAE-LIM [[email protected]]