Tesla CEO Musk Confirms TSMC and Samsung Collaboration on AI5 Chip Manufacturing

Tesla CEO Elon Musk has officially confirmed that the company's forthcoming AI5 chip will be jointly manufactured by Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung Electronics. The announcement, made during Tesla’s third-quarter earnings call on October 22, established the strategic partnership between two of the world’s leading semiconductor players in support of Tesla's cutting-edge AI innovations.

In detailing the arrangement, Musk stated, “Tesla’s AI5 chip will be produced by both Samsung Electronics and TSMC. Both partners are currently focusing on manufacturing the AI5 chip,” underscoring the collaborative effort to meet Tesla’s demanding production needs. Designed to drive advancements in Tesla’s proprietary autonomous driving software and its humanoid robot, Optimus, the AI5 chip is integral to Tesla’s broader AI ambitions. In addition to leveraging its own proprietary chips, Tesla continues to complement its technology stack with Nvidia’s state-of-the-art AI processors.

Samsung’s Bid to Expand Foundry Dominance

The collaboration signals a major development for Samsung, which is striving to close the gap with industry leader TSMC in the competitive semiconductor foundry market. As part of its broader expansion strategy, Samsung is constructing a massive semiconductor fabrication facility near Austin, Texas, strategically positioned near Tesla’s headquarters. This proximity is expected to facilitate smoother operations and bolster ties with Tesla as the automaker ramps up its technological capabilities.

Notably, this partnership builds on a $16.5 billion deal inked in July, which tasked Samsung with producing Tesla’s next-generation AI6 chips. This landmark agreement not only represents the largest contract in Samsung Foundry’s history but also underscores Tesla’s confidence in Samsung’s ability to handle future-generation AI chip production.

Strengthened Collaboration for AI5 Chip Production

Initially, Tesla’s chip manufacturing responsibilities were divided, with Samsung focusing on the production of older AI4 chips while TSMC handled the AI5 chips. However, the decision to have Samsung and TSMC jointly produce the AI5 chip reflects Tesla’s strategy to optimize production capacity, ensure supply chain resilience, and mitigate potential bottlenecks. As Tesla scales its AI operations and autonomous driving breakthroughs, maintaining consistent supply and reducing risk in its chip production pipeline are crucial to achieving its ambitious goals.

This strengthened collaboration between Tesla, TSMC, and Samsung highlights the increasing interdependence in the semiconductor sector, where partnerships are becoming essential in the race to develop advanced AI technologies. As Tesla continues to push the boundaries of autonomous capabilities and humanoid robotics, the AI5 chip serves as a cornerstone of its technological aspirations, with joint production ensuring Tesla can meet growing demand and stay ahead in innovation.

The arrangement not only cements Tesla's position as a leader in AI-driven mobility and robotics but also deepens the strategic ties between global semiconductor giants, underscoring the critical role these partnerships play in shaping the future of AI-powered industries.