Samsung Electronics nears production of Tesla's AI5 chip, lifting foundry outlook

Samsung Electronics has completed preparations to mass-produce the AI5, Tesla's next-generation AI chip, raising expectations for a turnaround in its foundry business.

The AI5 is set to be manufactured at Samsung's new factory in Taylor, Texas, using a 2-nanometer advanced process. Industry observers say that successfully delivering stable mass production of the chip would validate Samsung's foundry competitiveness and accelerate its efforts to win additional customers.

The Taylor factory's full-scale operation is also drawing attention as a concrete example of strengthened US semiconductor production capacity, at a time when the Trump administration is pressing domestic chipmakers to expand their US investments.

An official from Samsung Electronics' foundry division said in a recent social media post that "the Tesla-Samsung AI5 chip has completed tape-out," adding that "the AI5 will be produced at Samsung's Taylor, Texas factory using its 2nm process and will soon be integrated into Tesla's latest products," according to industry sources Tuesday.

Tape-out refers to the completion of a chip's design and its handoff to a foundry for fabrication — the final step before full-scale mass production begins.

The AI5 is intended for use in Tesla's Full Self-Driving vehicles and humanoid robots. TSMC had originally been set to handle all production on its own, but Samsung Electronics' role became public through Elon Musk, who confirmed the company had secured a portion of the orders.

In April, Musk posted on his X account congratulating Tesla's AI chip design team on completing the AI5 tape-out. "AI6, Dojo 3 and other cool chips are in development," he wrote, adding: "Thank you to Samsung Electronics and TSMC for helping us manufacture these chips."

Samsung Electronics, which had already produced Tesla's AI4 chip, secured a supply contract for the AI6 chip last July, signaling a foundry comeback. The deal, worth around 23 trillion won ($15.3 billion), covers supply to Tesla through 2033.

The value of the additional AI5 order has not been disclosed, but back-to-back wins on Tesla's next-generation chips have led industry watchers to describe the two companies' relationship as increasingly close.

While the AI4 is manufactured at Samsung's foundry in Pyeongtaek, the AI5 and AI6 will be handled by the Taylor factory — a new US production hub that has drawn a total investment of $37 billion.

Samsung is currently focused on winning orders from big tech companies in the United States, including Anthropic, the developer of the generative AI model Claude. Against that backdrop, mass-producing Tesla's AI5 chip is seen as an opportunity to demonstrate the competitiveness of its leading-edge process technology.

If Tesla's orders help establish the reliability of Samsung's 2nm foundry process, the company believes it will strengthen its strategy for securing customers in the US market.

The launch of the "Taylor era" on American soil — home to a constellation of star fabless firms including Nvidia, Tesla, Apple, Qualcomm and AMD — is widely regarded as a watershed moment for Samsung's foundry revival.

The Taylor factory, whose operation had been delayed by a lack of major customers, is expected to contribute to improved profitability in Samsung's foundry business once AI5 mass production gets fully underway. Industry watchers predict the foundry division will sharply narrow its losses next year and return to quarterly profit.