Good news for the central Texas economy: Samsung’s new Taylor fab is going to build AI chips for Telsa.
Tesla’s next-generation AI6 chip, designed to power the Full Self-Driving (FSD) system, will be manufactured at Samsung’s new, massive chip fabrication plant in Texas, strategically located near Tesla’s Model Y and Cybertruck production facilities.
They’re both on the outskirts of east Austin, though different parts of east Austin (Telsa’s plant is south, and Samsung’s new Taylor fab way north). Google maps say they’re about 27 miles apart as the crow flies, or 36 minutes apart if you take the 130 toll road.
“Samsung’s giant new Texas fab will be dedicated to making Tesla’s next-generation AI6 chip. The strategic importance of this is hard to overstate,” Elon Musk wrote on X late Sunday night.
Musk continued, “Samsung currently makes AI4. TSMC will make AI5, which just finished design, initially in Taiwan and then Arizona.”
“Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency,” he noted, adding, “This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house.”
Musk used to claim his small house in Boca Chica (near Space X’s launch facility there) was his official residence. Now he’s supposedly bought a $35 million, a 14,400-square-foot, Tuscan-style villa in the Austin, but the source for that is a notoriously untrustworthy outlet know as the New York Times, so take that with a grain of salt.
As to Musk “personally walking the line to accelerate the pace of progress,” presumably in a full bunny suit, I fail to see how that’s going to help anything. Most modern fabs have extremely efficient, streamlined operations that aren’t amenable to improvement via random billionaires walking their floor.
Samsung confirmed that it will produce Tesla’s AI chips as part of a $16.5 billion chipmaking deal, marking a major win for its underperforming foundry division, according to Bloomberg.
A foundry is a fab that manufactures chips for other companies rather than it’s own designs. Samsung has both fabs for its own chips and a foundry business.
The AI6 chip will be produced at Samsung’s chip plant in Taylor, Texas. The new facility was partially funded through the Biden-Harris administration’s CHIPS and Science Act and is focused on manufacturing advanced logic chips for mobile devices, 5G, high-performance computing, and AI applications.
My previous critique of the CHIPS act can be found here.
Tesla’s partner in the deal, Samsung’s Taylor Fab semiconductor location — which broke ground in 2022 and is expected to be fully operational in the City of Taylor come 2026 — aims to increase the production of semiconductor-related initiatives that’ll “power next-generation technologies” including 5G, high-performance computing, and various forms of AI.
The South Korean company, Samsung Technologies, first planted its roots in Texas in 1996, in Austin.
Tesla has multiple locations across the Lone Star State, including its primary manufacturing hub and headquarters near Austin, the “Gigafactory,” which boasts over 10 million square feet in floor space or 2,500 acres.
Snip.
Samsung Electronics announced on Monday it had signed a $16.5 billion contract with a “large global company” — revealed by Musk in the aforementioned X posts, although kept anonymous by Samsung. The contract’s tenure spans from July 24, 2025 to December 31, 2033.
Musk clarified in another X post that he believes the $16.5 billion number is “just the bare minimum,” and that the “actual output” of this collaboration between Samsung and Tesla will be “several times higher.”
There’s been a lot of (somewhat justified) concern over the dependence of American tech companies like Nvidia and Apple on Taiwan-based TSMC to fab their cutting edge sub-10nm chip designs. The problem has been foolishly phrased as “America can’t make chips anymore,” which is false, as American fabs churn out millions of chips every month. The problem is “lack of available domestic sub-10nm wafer starts,” a problem exacerbated by the fact that there are only three companies in the world that have the knowledge and resources to building cutting edge fabs, the cost of which is now pushing $20 billion.
Fortunately for Texas, Samsung is one of those three companies, and together with TSMC’s new fab in Arizona and Intel’s new fab in Ohio, a lot of those capacity constraint problems are being addressed.
Tags: AI, Arizona, Austin, cars, Elon Musk, Intel, Ohio, Samsung, Semiconductors, subsidies, Taylor, technology, Tesla Motors, Texas, TSMC
Samsung originally announced the Taylor, TX fab as a 4 nm process node facility costing $ 17 billion in 2022. Then they boosted it to a 2 nm process node facility costing $ 44 billion last year. Their last press releases suspended completion of the facility due to insufficient customer interest.
Does Tesla’s $ 16.5 billion contract get Samsung in gear?
Where does the massive electrical power come from? Chip fabs in this process node range consume 150 – 250 kWh of electricity per square centimeter (about 15 hundredths of a square inch) of wafer produced. A modest output chip fab facility in operation will require 200 MW of available electricity supply. Texas does not exactly have a reputation for grid adequacy.
The $44 billion price tag includes a second fab on the same site, so isn’t relevant. The last cost estimate I saw for the first fab was $25 billion.
Taylor is the home of ERCOT, so they know the fab will never be power-cycled in a shortage.
Jeez, I’m so old I can remember when you could build a state-of-the-art fab for only $4 billion.
Moore’s Second Law is a cruel mistress…
Regarding Musk walking the line – my son has worked for Tesla in two locations over the past 7 years. He’s done this routinely at both battery manufacturing and car/truck build sites. (Full disclosure-I did just take the Giga factory tour in Austin, TX last week and I’m impressed.)
He has a knack, I’m told, for seeing inefficencies in the processes and focusing on minute details to improve performance, relentless in pursuit of improvement. It’s always big deal when Elon comes to inspect the line(s). Asks lots of questions. He has the same practice at SpaceX, Boring, and Nueralink. More of a hard-core, hands-on tech nerd kind of entrepreneur like Jobs rather than a hands off tech guy with ruthless business interests like Gates.