Samsung Chairman Secures $16.5B Tesla Deal, Apple Contract in 17-Day US Business Trip
Samsung Electronics Chairman Lee Jae-yong returned to South Korea on August 15 after closing two major deals during his 17-day US visit, including a record-breaking $16.5 billion chip manufacturing contract with Tesla.
$16.5 Billion Tesla Partnership Changes the Game
The Samsung-Tesla deal, worth 22.8 trillion won ($16.5 billion) and running through 2033, represents Samsung's largest single foundry contract. Tesla CEO Elon Musk confirmed on social media that "Samsung's giant new Texas fab will be dedicated to making Tesla's next-generation AI6 chip".
Musk emphasized the deal's significance, stating "The strategic importance of this is hard to overstate" and noting that Samsung agreed to let Tesla help optimize manufacturing efficiency. The AI6 chips will power Tesla's future autonomous driving systems and humanoid robots.
The contract amounts to 7.6% of Samsung's 2024 annual revenue and could generate about 2.5 trillion won annually, providing crucial revenue for Samsung's struggling foundry division that has been losing money and operating below capacity.
Breaking Sony's iPhone Monopoly
During Lee's trip, Samsung also secured a contract to produce advanced image sensors for Apple's iPhone 18 at its Austin, Texas facility. The deal involves three-layer stacked image sensors, which enable higher pixel density and improved low-light performance.
This marks the first time Apple will move away from Sony for iPhone image sensors after more than a decade of exclusive partnership. Industry experts attribute Samsung's win to its US manufacturing presence, as Sony lacks American production facilities.
Legal Victory Enables Business Expansion
Lee's aggressive deal-making comes after South Korea's Supreme Court on July 17 upheld his acquittal on all fraud charges related to a 2015 Samsung merger. The ruling ended nearly a decade of legal uncertainty that had constrained Samsung's major business decisions.
Strategic Timing and Market Impact
Both contracts position Samsung as a viable alternative to Taiwan Semiconductor Manufacturing Company (TSMC), which dominates the foundry market. Samsung holds just 8% of the global foundry market compared to TSMC's 67% share.
The deals also align with US industrial policy encouraging domestic chip production. The timing coincides with President Trump's announcement of potential 100% tariffs on foreign-made chips, though companies investing in US manufacturing could avoid these levies.
What's Next
Lee is scheduled to join President Lee Jae-myung's economic delegation for the Korea-US summit from August 24-26 in Washington. Industry observers expect Samsung to announce additional US investment plans during the visit.
Speaking to reporters at Incheon Airport upon his return, Lee summarized his mission simply: "I came to prepare for next year's business." The contracts secured suggest Samsung is positioning itself for significant growth in the US semiconductor market.
