In a surprise move, Tesla has reportedly decided to enlist Samsung Electronics to manufacture its next-generation HW5 self-driving chips, according to the Korea Economic Daily. The shift comes after Tesla initially went all in on TSMC to supply the critical chips for its future autonomous vehicles.
This news follows a meeting between Samsung Electronics Chairman Lee Jae-yong and Tesla CEO Elon Musk in May of this year, where the two discussed collaboration plans in advanced industries. Now, insiders familiar with Samsung and TSMC suggest that Tesla has decided to accept Lee Jae-yong’s proposal and work with Samsung Electronics to produce the next-gen autonomous driving hardware.
HW 5.0 is Tesla’s highly anticipated hardware for achieving level 5 autonomous driving, expected to be applied to Tesla’s high-end models in about two years. The hardware has been in development for some time, with Tesla previously selecting TSMC as its only foundry partner. However, this situation has changed in the past few months.
With Samsung’s 4nm chip production process now humming along at a 70% yield rate – on par with TSMC’s – Tesla was apparently enticed by the Korean tech giant’s ability to deliver cutting-edge custom silicon on budget. Insiders claim that after Lee’s aggressive pitch, Tesla could divvy up orders between TSMC and Samsung, or even pivot completely to Samsung for the next-gen self-driving brains.
Samsung has been on a roll in scoring plum advanced chip contracts, also nabbing Mobileye’s next-gen ADAS supply deal. With Tesla now seemingly added to its roster, the company is poised to challenge TSMC’s supremacy.
It remains to be seen whether Tesla will choose Samsung and TSMC as multiple suppliers or outsource 100% to Samsung. But with the move towards Samsung, it seems that Tesla may be reconsidering its foundry partner for HW 5.0. The autonomous driving market is heating up, and Tesla is leading the charge. Will Samsung’s chips help Tesla maintain its position at the forefront of autonomous driving technology?