Samsung gears up for Tesla AI5 chip production

Samsung Electronics has begun preparing to manufacture Tesla's next-generation AI5 artificial intelligence chip, raising expectations for a rosy revenue outlook for its foundry business.

“Tesla-Samsung AI5 chip has completed tape-out,” according to a recent LinkedIn post uploaded by an employee at Samsung Electronics' foundry division.

Tape-out marks the completion of a semiconductor's design and the transfer of final design data to manufacturing, a key milestone before mass production begins.

The AI5 chip is scheduled to be manufactured using Samsung's 2-nanometer process at its Taylor plant in Texas. This is the first time Samsung's production schedule for Tesla's AI chips has been disclosed in such detail.

Tesla is developing AI5 with a target performance of up to 2,500 Tera Operations Per Second. The chip is expected to power the company's next-generation Full Self-Driving software and other AI applications.

Samsung Electronics and Taiwan's TSMC will reportedly share production of the fifth-generation AI5 chip, while Samsung is expected to exclusively manufacture Tesla's sixth-generation AI6 chip.

Samsung Electronics' earnings remain heavily supported by its memory chip business.

The company reported a consolidated operating profit of 89.4 trillion won ($59.9 billion) for the second quarter. Analysts estimate the memory business accounted for about 84 trillion won, or roughly 94 percent of total operating profit, while the nonmemory business, including the foundry division, remained in the red.

The market expects Samsung's foundry business to improve more rapidly after Tesla chip shipments begin in earnest next year.

Samsung's Taylor plant is expected to begin initial operations later this year before moving into mass production for major customers, including Tesla, in 2027.

BY KIM IN-KYOUNG [[email protected]]