Samsung Electronics seals a $16.5 billion chip deal with an undisclosed customer

A recent regulatory filing indicates that Samsung Electronics has secured a substantial chip supply deal worth 22.8 trillion won ($16.5 billion) with an unidentified customer. The deal was signed on Saturday, but further details about the terms and the buyers haven't been disclosed.

The contract starts on July 26, 2024, and ends on December 31, 2033. It remains to be seen which company has signed such a lucrative chip deal with Samsung. The Korean tech giant has not yet responded to requests for comments.

Samsung has noted that more details about its $16.5 billion chip deal, including the name of the buyer, won't be released until the end of the contract in 2033 due to a request from the buyer to "protect trade secrets." However, Samsung has said the buyer is a major global company

"Since the main contents of the contract have 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," Samsung added.

A $16.5 billion chip supply deal, equivalent to 7.6 percent of Samsung's 2024 revenue, has significantly boosted investor confidence. Samsung shares rose 3.5 percent in its hometown South Korea after the company announced its recent chip deal.

Samsung's chip manufacturing business has encountered significant challenges in recent years, including a decline in production yields and the loss of major clients. These setbacks even compelled the company to abandon the use of its Exynos 2500 chips in the Galaxy S25 series in favor of Qualcomm processors.

Earlier this year, Korean outlets reported that Samsung might slash investments in its foundry business by 50 percent as the division faces an uphill battle. However, the new chip supply agreement, with its potential to revive Samsung's declining semiconductor business, brings a ray of hope.

The recent Samsung chip supply deal may also be good news for the US, as the Korean tech giant had previously halted plans to build a chip manufacturing plant in Texas due to difficulties in finding customers.

Update: Elon Musk on X just confirmed that Samsung will produce Tesla’s next-generation AI6 chip at its factory in Texas. Samsung is currently producing AI4 chips for Tesla vehicles.

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Posted Monday 28 July 2025 at 5:41 pm AEST (my time).

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