Samsung Begins Trial Production of Tesla AI5 Chip

The trial production schedule, originally set for November, has been moved up by two months for early operation.

The Tesla AI5 chip being produced is made using a cutting-edge 2-nanometer process. With this, Samsung Electronics has once again showcased its foundry technology by undertaking the production of advanced chips for a key client.

Although the U.S. Federal Reserve (Fed) raised the benchmark interest rate by 0.25 percentage points, adjusting the rate range from 3.75% to 4%, the stock market showed an upward trend due to the resolution of uncertainty. The conclusion of weeks of debate over whether to raise interest rates appears to have positively impacted the market.

Following this trend, the Nasdaq, S&P 500, and Dow indices all rose together, and Tesla's stock price also increased in line with market movements. This rate hike was the first such action in three years.

This figure is lower than the market's average forecast of 456,000 units.

Despite this outlook, Goldman Sachs maintained a 'neutral' rating on Tesla and set a price target of $360.

This suggests that the regulatory authority's investigation will become more intense.

Moving forward, Tesla executives must submit sworn responses to the audit. The deadline is September 30.

This chip incorporates advanced technology to maximize AI computing performance.

Recently, with an increase in orders for custom chips from big tech companies, Samsung Foundry's production lines are accelerating. Samsung Foundry's order backlog is currently approaching 50 trillion won, supporting the continued growth of Samsung's foundry business unit.

Currently, the foundry market is dominated by TSMC, which holds an overwhelming 70% market share, making it imperative for Samsung Foundry to strengthen its competitiveness through this contract.

In the semiconductor industry, a yield rate typically above 60% is known to enable a turnaround to profitability. Many are interested in what percentage Samsung Foundry's 2-nanometer process yield will reach.

The 2-nanometer process yield of competitor TSMC is currently estimated to be around 60-70%, and Samsung also needs to achieve or surpass this level of yield. A high yield leads to reduced production costs and increased profitability, which is an essential condition for turning a profit.

Tesla's AI5 chip is slated for installation in the Model 3, Model Y, and the Cybercab currently under development. It will play a crucial role in powering the vehicles' autonomous driving functions and infotainment systems.

Furthermore, the AI5 chip is planned for use in Tesla's humanoid robot 'Optimus' and AI data centers. As such, the AI5 chip is positioning itself as a key versatile chip across various future business areas for Tesla.

This measure is in preparation for the surging demand for chips for robots and data centers, in addition to vehicle deliveries.

Having experienced production line halts due to past semiconductor shortages, Tesla is staking its future on stabilizing its supply chain through proactive inventory securing.

Currently, Tesla's AI4 chip is being mass-produced at Samsung's Pyeongtaek line using a 7-nanometer process. Samsung continues its important partnership by sharing the production of Tesla's AI chips across both factories.

This is to prevent production line halts and ensure stable chip supply even if an issue arises with one company.

Past experience with production disruptions due to the 2021 semiconductor shortage served as the background for this strategy. Currently, the supply chain is divided, with Samsung solely responsible for AI6 chips and TSMC handling AI6.5 chips.

Tesla has filed a lawsuit concerning the 'Tera' trademark in Austin federal court. The defendant is Illinois Terraprint, a manufacturer of desktop equipment. The lawsuit targets Tesla, SpaceX, and Tesla AI.

Tesla plans to invest approximately $16.8 billion (about 23 trillion won) in Texas to construct a 'Tera' factory, envisioned as a large-scale integrated facility for design, manufacturing, packaging, and inspection. Attention is focused on the potential impact of the trademark dispute on this factory project.

Regarding the 'Tera' trademark dispute, Tesla preemptively filed a lawsuit in court before the opposing party could. This is a strategic move by Tesla to request a ruling that there is no trademark infringement and to secure Austin as the trial venue. It is understood that Tesla requested a legal judgment after negotiations over the trademark dispute failed.

Such proactive legal action could work in Tesla's favor during future proceedings. While the direct impact of the lawsuit's outcome on factory operations is expected to be limited, it shows Tesla's willingness to manage potential risks.