Samsung Teams Up with Tesla for Next-Generation Full Self-Driving Chips Production

Samsung Electronics Co., the global memory chipmaking giant, has revealed a new strategic alliance with Tesla Inc. to manufacture the automaker's forthcoming Full Self-Driving (FSD) chips. Slated for inclusion in Tesla's Hardware 5 (HW 5.0) computers, the state-of-the-art chips, built on Samsung's 4-nanometer node, are expected to go into mass production within the next three to four years.

Previously, Tesla had chosen Taiwan Semiconductor Manufacturing Co. (TSMC) as its sole HW 5.0 auto chip production partner. However, Tesla plans to collaborate with both TSMC and Samsung or potentially rely solely on Samsung for the mass production of the fifth-generation auto chips.

This strategic shift arose after Samsung Group leader Lee Jay-yong discussed with Tesla Chief Executive Elon Musk to explore opportunities for strengthening their technological partnership. During their meeting at a Samsung research center in Silicon Valley, Lee presented Musk with favorable terms, including competitive contract prices, facilitating this new alliance.

Samsung has a history of supplying earlier versions of FSD chips to Tesla, supporting the production of various Tesla EV models such as the Model 3, Model 5, Model X, and Model Y. In addition to this collaboration, Samsung has experienced significant improvements in the yield of its 4-nm and 3-nm node processes, up to a 75% and 60% increase in yield, respectively.

To support its growing ambitions, Samsung is actively expanding its foundry capacity. This includes expanding its manufacturing footprint at the Pyeongtaek plant in Korea in 2022 and establishing a new plant in Texas, expected to be operational the following year. By 2027, Samsung aims to triple its global chipmaking capacity from its 2022 level.

The partnership between Samsung and Tesla marks a significant milestone in the advancement of autonomous driving technology, highlighting the concerted efforts of these industry leaders in driving innovation forward.

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