Vientiane: Samsung Electronics Co. announced a significant achievement by securing a 22.8 trillion-won (US$16.4 billion) order for artificial intelligence semiconductors, which U.S. tech giant Tesla later confirmed. The deal, set to be completed by December 31, 2033, was revealed through a regulatory filing by the South Korean tech giant.

According to Lao News Agency, the contract represents 7.6 percent of Samsung Electronics’ total revenue from last year, marking it as the largest chip order Samsung has ever attained. Although Samsung initially withheld the client’s identity citing “management confidentiality,” Tesla’s founder, Elon Musk, later disclosed that the AI6 chips for Tesla will be produced at Samsung’s new semiconductor plant in Texas.

Musk suggested that the deal’s scale could exceed the disclosed amount. He stated on social media that Samsung agreed to let Tesla assist in optimizing manufacturing efficiency. The Texas plant, part of Samsung’s US$37 billion investment, aims to begin operations in 2026 and will focus exclusively on Tesla’s next-generation AI6 chip.

The collaboration comes at a strategic time for Samsung, as its foundry division has been striving to compete with industry leader Taiwan Semiconductor Manufacturing Co. (TSMC). Currently, Samsung is producing AI4 chips, while TSMC will handle production of Tesla’s AI5 chips in their facilities in Taiwan and Arizona.

Tesla plans to accelerate the development of its full self-driving (FSD) assistance system using the AI4, AI5, and AI6 chips. Musk emphasized the strategic importance of the Texas facility, citing its proximity to his residence as a convenience.

The landmark deal is anticipated to bolster Samsung’s foundry division, which accounted for 7.7 percent of the global foundry market in the first quarter, trailing behind TSMC’s 67.7 percent. Despite recent sluggish performance in its foundry and System Large Scale Integration (LSI) divisions, Samsung Electronics reported an operating profit estimate of 4.59 trillion won and sales of 74 trillion won for the second quarter.

Following the announcement, Samsung Electronics’ shares surged by 6.83 percent, closing at 70,400 won and outperforming the Korea Composite Stock Price Index’s 0.42 percent gain.