Tesla CEO Elon Musk said he will involve Samsung Electronics' foundry division in manufacturing the AI chipset "AI5," which had been slated for exclusive production by Taiwan's TSMC. Observers say Tesla's earlier decision to contract out the 2-nanometer AI6 to Samsung Electronics reflects confidence in Samsung's foundry production capabilities.
On the 22nd (local time), CEO Musk said during Tesla's third-quarter earnings conference call, "The AI5 chip will be manufactured by both TSMC and Samsung Electronics." Tesla's current-generation Autonomous Driving chipset, AI4, is being produced by Samsung Electronics, and AI6, targeted for a 2028 launch, has been awarded to Samsung Electronics.
The AI5 Musk mentioned is positioned between AI4 and AI6 and had been known as a product to be produced entirely by TSMC. With Musk's latest remarks, however, Samsung Electronics will be involved in mass production of all three of Tesla's latest AI chips. This indicates an even closer level of collaboration between Samsung Electronics and Tesla.
Tesla's move to involve both TSMC and Samsung Electronics in AI5 production is seen as driven by expectations that demand for the AI5 chip will be higher than initially forecast and by a strategy to reduce costs by pitting the two companies against each other. From Musk's perspective, fostering competition between the two foundries can lower unit production costs and secure supply stability. It is also largely a risk management approach to avoid relying entirely on a single supplier.
The fifth-generation Autopilot chipset, AI5, is expected to enter mass production in late 2026. The goal is performance of up to 2,500 TOPS (1 trillion operations per second). While specific details about the chip have not yet been disclosed, the industry expects a high likelihood of using either TSMC's or Samsung Electronics' 3-nanometer or improved 4-nanometer process.
It is unclear how much volume Samsung's foundry division will be allocated, but given Musk's comment that he intends to diversify AI5 chip use cases, the volume is likely to be significant. "A clear goal is to secure oversupply of AI5 chips," Musk said, adding, "If we end up with too many AI chipsets for cars and robots, we can use them in data centers."
Samsung's latest foundry order is said to have been aided by its ability to produce in the United States and its large-scale production capacity (CAPA). Samsung Electronics has large foundry facilities in Austin and Taylor, Texas, and the physical distance to Tesla's new Austin plant is relatively short.
Samsung Electronics' Taylor plant is preparing to begin full-scale operations in 2026. According to the industry, Samsung Electronics signed a foundry contract worth 2.28 trillion won with Tesla in Jul. and has dispatched personnel since Sep. to refurbish the foundry line. It is also said to be planning to deploy additional engineers in Nov. to continue equipment installation and process optimization.
The contract is expected to put the Taylor plant into operation as scheduled. The timing for full-scale revenue recognition under the contract is expected to be in 2027 and is estimated at around 3 trillion won per year. A semiconductor industry official said, "This order is likely to dispel market concerns about the operation of Samsung Foundry's Taylor plant," adding, "The 4-nanometer process, which sits between the state-of-the-art 2-nanometer node and mature nodes, is an attractive alternative for fabless corporations in terms of Production yield and price, which will help in securing additional customers later on."