Samsung Semiconductor Foundry: Powering Tesla's FSD Chip

Samsung's semiconductor foundry division is making waves in the electronic components market by targeting Taiwan Semiconductor Manufacturing Company (TSMC)'s orders. Recent reports from South Korean media reveal that Samsung has already replaced TSMC as the chip manufacturer for Intel's Mobileye, a leader in autonomous driving technology. Now, Samsung is eyeing a significant share of Tesla's upcoming order for their next-generation Full Self-Driving (FSD) chip, positioning themselves as a key player in Tesla's future Level-5 autonomous vehicles.

While TSMC remains tight-lipped during their pre-earnings conference period, industry insiders from South Korea suggest that Samsung will leverage its 4-nanometer process technology to produce Tesla's highly anticipated FSD chip. This advanced chip, known as "Hardware 5" (HW 5.0), will power Tesla's upcoming self-driving cars set to hit the market in the next three to four years.

It's worth noting that Samsung previously manufactured FSD chips for earlier Tesla models, including the popular Model 3, Model S, Model X, and Model Y. However, Tesla shifted their primary partnership to TSMC last year due to concerns over Samsung's lower yield rate in the 4-nanometer process. Nevertheless, Samsung has made significant improvements since then, almost matching TSMC's yield rate, which positions them as a strong contender to win back Tesla's chip orders.

Currently, Tesla is considering collaboration with both TSMC and Samsung, or potentially transitioning their entire order to Samsung for the mass production of their next-generation automotive chip. There's even speculation that the production of this chip could be divided between the two companies to maximize efficiency.

In May, Samsung's Chairman, Lee Jae-yong, held a meeting with Tesla's CEO, Elon Musk, to explore opportunities for a stronger technological alliance. During this meeting, Lee Jae-yong presented Musk with an attractive offer that piqued Tesla's interest. Discussions focused on technological collaboration, particularly in the joint development of autonomous vehicle chips.

Samsung has been aggressively expanding its presence in the automotive industry, not just in advanced process semiconductor foundry services. Earlier this year, they forged a partnership with Ambarella, a leading U.S. chip manufacturer, to produce Ambarella's cutting-edge CV3-AD685 chip. This chip is specifically designed to process data for Level 2 to Level 4 autonomous driving. Samsung also secured a chip production order from Mobileye, a renowned provider of advanced driver-assistance systems (ADAS). Previously, Mobileye relied on TSMC for their chip supply.

Overall, Samsung's pursuit of electronic component dominance, particularly in the autonomous driving sector, highlights their commitment to innovation and collaboration with industry leaders like Tesla. The competition between Samsung and TSMC in securing critical chip orders for advanced technologies continues to drive advancements in the automotive industry.