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Samsung hit again, transfers Tesla chip production contract to TSMC

Samsung Electronics is struggling in the chipset business. After Qualcomm lost high-end chip production orders to TSMC, and the flagship Exynos production line had to be shut down, Samsung Electronics lost another game of chess.

After Qualcomm lost high-end chip production orders to TSMC, and the flagship Exynos production line had to be shut down, Samsung Electronics lost another game of chess.

According to Taiwan’s Economic Daily, Tesla is replacing Samsung Electronics with TSMC, the world’s largest foundry chip maker.

The Taiwanese company won a big order for Tesla’s driver assistance chip (FSD). They will be manufactured using 4nm and 5nm processes.

TSMC declined to comment, but it was another loss for Samsung Electronics’ chipset division.

Tesla becomes a major customer of TSMC

According to reports, electric car maker Tesla could become one of TSMC’s seven major customers by 2023, an important milestone. In fact, this is the first time that TSMC’s major customers have customers from new energy car companies.

Samsung Electronics certainly has always admired Tesla as a customer, especially after losing an order from Qualcomm to make high-end chips.

Tesla is busy developing a fully self-driving computer. Billionaire Elon Musk’s company takes chips and integrates them with high-speed computing, artificial intelligence (AI) and other functions.

Previously, Tesla had bet on a multi-supplier strategy, placing orders with Samsung Electronics and TSMC at the same time. The previous generation of FSD chips was manufactured using a 14nm process, mainly at Samsung Electronics’ Austin (Texas, U.S.) factory.

Dubbed Hardware 3.0, the chip was later upgraded to a 7nm process. Now, Tesla will move to a 4 or 5nm process and will only order chips from TSMC.

The image processing speed of hardware 3.0 is 21 times faster than version 2.5. In addition, the cost of chips is reduced by 20%, and owners of old electric vehicles can upgrade for free.

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