Tesla (TSLA) has signed a multiyear chip supply deal worth $16.5 billion with Samsung Electronics (SSNLF). The deal highlights Tesla’s efforts to secure advanced chips as it boosts EV production and adds more AI and self-driving features. The deal could also be significant for South Korea, which is seeking to strengthen its ties with the U.S. in chipmaking and shipbuilding.
Meet Your ETF AI Analyst
- Discover how TipRanks' ETF AI Analyst can help you make smarter investment decisions
- Explore ETFs TipRanks' users love and see what insights the ETF AI Analyst reveals about the ones you follow.
$16.5B Chip Pact
As part of the deal, Samsung’s new chip plants in Texas will produce Tesla’s next-gen AI6 chip. Tesla’s CEO Elon Musk confirmed the deal in a post on X, stating that “The strategic importance of this is hard to overstate.” Additionally, Samsung has agreed to let Tesla help improve manufacturing efficiency. Musk added that “I’ll personally walk the line to speed up progress.”
For Samsung, the deal comes at a time when the company is under growing pressure to catch up in the AI chip race. It currently lags behind competitors like TSMC (TSM) and SK Hynix in the global foundry market. This gap has taken a toll on both its profits and stock performance. Following the news, Samsung’s Korean-listed shares gained almost 6% as of writing.
For context, foundry services involve manufacturing chips for companies like Nvidia (NVDA), Qualcomm (QCOM), and Apple (AAPL), which design their chips but rely on external factories for production.
Is Tesla Stock a Buy Now?
On Wall Street, analysts have maintained a neutral stance on Tesla stock. According to TipRanks, TSLA stock has received a Hold consensus rating, with 14 Buys, 15 Holds, and seven Sells assigned in the last three months. The average Tesla stock price target is $313.67, which is almost similar to the current level.
