On Monday, Samsung Electronics said it has signed a contract valued at $16.5 billion to supply semiconductors to a major global corporation.
When Was The Contract Chip Deal Signed?
In the regulatory filing, it stated the contract chip manufacturing deal was signed on Saturday. It further explained that until the end of 2033, details of the agreement, including the counterpart and terms, would not be disclosed.
Ray Wang, Research Director of Semiconductors, Supply Chain, and Emerging Tech, acknowledged on X (formerly Twitter), " Samsung Electronics said on Monday it has signed a contract valued at $16.5 billion to supply semiconductors to a major global corporation"
Who Is The Major Global Corporation?
According to CNBC, "Samsung earlier said that details of the deal, including the name of the counterparty, will not be disclosed until the end of 2033, citing a request from the second party “to protect trade secrets,” according to a Google translation of the filing in Korean."
Some reports reveal that the global corporation is Tesla.
Tesla Contract Can Enhance Market Share Against TSMC?
Another X (formerly Twitter) user wrote, "This $16.5B Tesla contract could significantly boost Samsung's Semiconductor business by revitalising its Texas fab with advanced 2nm chip production, enhancing market share against TSMC(Taiwan Semiconductor Manufacturing Company), and stabilising revenue with Tesla’s demand."
Samsung Electronics is a major player in contract chip manufacturing. It is also known as foundry services.
Samsung explained that since the main contents of the contract had not been disclosed due to the need to maintain business confidentiality, investors are advised to invest carefully, considering the possibility of changes or termination of the contract. On Monday, its shares were up nearly 3%.
Samsung's foundry service manufactures chips based on designs provided by other companies. It is the second-largest provider of foundry services globally, behind Taiwan Semiconductor Manufacturing Company,(TSMC).
The deal comes as South Korea is seeking US partnerships in chips and shipbuilding as it is making last-ditch efforts to reach a trade deal to eliminate or cut potential 25 per cent US tariffs. Samsung has been losing share to TSMC in contract manufacturing owing to technological challenges that the South Korean giant faces in mastering advanced chip manufacturing, a Reuters report cited analysts as saying.
