Seoul [South Korea], April 16 (ANI): Samsung Electronics is set to deepen its role in Tesla's AI chip lineup after the automaker completed the design of its next-generation AI5 processor, a milestone that could help revive the Korean company's struggling foundry business, according to a report by The Korea Herald.

Tesla CEO Elon Musk said Wednesday that the electric vehicle company's AI chip team had 'taped out' the AI5 processor, marking the point at which a design is finalized and sent to manufacturing partners.

'Congrats to the @Tesla_AI chip design team on taping out AI5! AI6, Dojo3 & other exciting chips in work,' Musk said on his X account.

In another post, he confirmed that both Samsung and TSMC will support production and that its chip will be 'one of most produced AI chips ever.'

The AI5 chip is expected to power Tesla's fifth-generation full self-driving hardware (HW 5.0) and also support its humanoid robot programmes, placing it at the centre of the company's broader artificial intelligence strategy.

Tesla is adopting a multi-foundry approach, with both Samsung and TSMC supporting chip production. This approach is aimed at securing manufacturing capacity and reducing supply chain risks amid growing global demand for advanced semiconductor technologies.

Samsung has supplied earlier-generation AI4 chips and has secured a contract to produce Tesla's AI6 processors in a deal estimated at about 23 trillion won (USD 15.6 billion), running through 2033.

According to details shared by Musk, the AI6 chip will be manufactured using Samsung's 2nm process at its Texas fabrication facility and is expected to deliver roughly double the performance of AI5 at the same die size. An upgraded version, AI6.5, will be produced by TSMC on a 2nm node in Arizona, offering further performance gains.

Production is expected to be distributed across facilities capable of handling 2- to 3-nanometer nodes, including Samsung's upcoming Taylor fab in Texas and its existing plant in Pyeongtaek. Earlier AI4 chips were produced in South Korea.

For Samsung, the partnership with Tesla comes at a crucial time, as its foundry business has been facing challenges, including quarterly losses of around 1 trillion won due to weak order flows and competition from TSMC. Securing major AI clients is seen as key to strengthening its position in the advanced chip manufacturing segment.

The company has indicated that it is in discussions with major clients in the US and China and expects orders for 2nm chips targeting AI and high-performance computing to increase by more than 130 per cent this year.

Beyond automotive chips, Samsung is expanding its advanced-node pipeline, including production of DeepX's second-generation AI processor on its 2nm process, expected to enter mass production in 2027, and development of its own Exynos 2600 mobile processor.

The company is also integrating its foundry and memory businesses, with the base die for next-generation high bandwidth memory (HBM5) being developed on a 2nm process, marking further advancements in its semiconductor capabilities. (ANI)