STORY: Samsung Electronics shares jumped Monday (July 28) on news of a big deal to make chips for Tesla.
Elon Musk says his EV firm has signed a $16.5 billion contract for the supply of semiconductors.
That should be a big boost for Samsung’s loss-making contract chip-making business.
Shares in the firm were up around 6% by early afternoon following the news.
Musk said a new Samsung facility in the U.S. would be dedicated to production of the chips.
That could refer to a planned plant in Taylor, Texas, which has faced delays amid the South Korean firm’s struggles to win and retain big customers.
Musk said the plant was conveniently located near his house, and he would personally inspect it to help accelerate progress.
It’s all very timely for Samsung, which has dropped behind competitors in the race to supply AI chips.
Local rival SK Hynix and Taiwan giant TSMC are both seen to have streaked ahead.
That has weighed heavily on Samsung’s profits and share price.
Analysts say the deal could also be helpful for South Korea, as it battles to clinch a trade deal with the U.S.
The country is seeking partnerships on chips and shipbuilding as part of talks to avert a potential 25% tariff.
