"This is a critical point": Elon Musk gives update on Tesla-Samsung $16.5 billion chip supply deal in latest X post

On July 28, Elon Musk, CEO of Tesla, took to X to announce that the U.S vehicle maker has entered into a chip supply agreement with Samsung Electronics. This means that Tesla will now source chips from Samsung Electronics. In the tweet, Elon Musk mentioned,

"Samsung's giant new Texas fab will be dedicated to making Tesla's next-generation A16 chip. The strategic importance of this is hard to overstate. Samsung currently makes A14. TSMC will make A15, which just finished design, initially in Taiwan and then Arizona."

He also added,

"Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house 😃"

This comes after Samsung, on July 26, had announced a $16.5 billion chip production contract with a major global client, while not revealing the identity of the buyer.

Elon Musk's Tesla has noticed significant growth in 2025. Last week, on July 21, Tesla opened its new Tesla Diner.

More about Elon Musk's Tesla diner

Tesla's new chip agreement with Samsung is the latest development in the U.S automaker's move towards the future. A week ago, on July 21, Elon Musk opened Tesla's new diner on Santa Monica Boulevard in LA's lively Media District.

The diner offers more than just food and features high-speed V4 chargers, dual 45-foot LED drive-in screens, smart in-car ordering via touchscreen, retro-themed booths, neon decor, and an AI-powered Optimus robot serving popcorn.

It also boasts cybertruck-themed meals, solar-powered kitchen operations, and limited-edition Tesla collectibles. Construction for the diner had begun in September 2023. As per a customer's YouTube video, some customers waited 11 hours outside the restaurant to open.

After the opening of the restaurant, protestors showed up outside the 24-hour diner as part of the Tesla Takedown demonstrations. Joel Lava, who has helped organize the Tesla Takedown protests while speaking to CNN, said,

"(Customers) are waiting 11 hours so they can have Tesla-brand burgers and fries. This is the world's most renowned anti-trans advocate who just opened a diner in West Hollywood. The community is not very supportive of Elon."

The menu for the diner reflects the classic American diner with burgers, fries, hot dogs, chicken wings, hand-spun milkshakes, and sandwiches. Sodas are made with cane sugar in various flavors such as cola, root beer, black cherry, and cream, and are priced at $4.

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