Tesla will use next-generation self-driving chips made by Samsung

Previously Tesla cold-shouldered the South Korean tech giant Samsung. Now, in accordance with some fresh pieces of information, Tesla is looking forward to locking a deal with Samsung regarding the next-gen Full Self-Driving (FSD) chips. Notably, Samsung will manufacture a portion of the FSD chips. Previously, Tesla collaborated with TSMC regarding the manufacturing of Hardware 5 (HW 5.0) auto chips. 

The Korea Economic Daily reports that the shift in events is a result of a meeting between the heads of the businesses. The meeting was organized at Samsung research center in Silicon Valley, San Jose in May. In addition to pitching “favorable contract prices” for producing Tesla’s processors, Lee also offered to co-develop chips for fully driverless vehicles. Musk appeared unable to decline the offer.

Well, this is not the first time that Tesla and Samsung are working for hands in hand. Previously, Samsung has provided Tesla with FSD chips for Model 3, Model 5, Model X, and Model Y cars. However, in December 2022, the electric vehicle company turned to TSMC possibly because of the low yield rate of Samsung’s 4nm.

On the other hand, the Korean firm has enhanced the yield rates of its 4nm process over the past few months. As of now, the 4nm yields of Samsung are equal to TSMC’s, and its 3nm yield rates have outperformed TSMC’s. The recently manufactured 4nm HW 5.0 chips of Samsung will be used by Tesla in its Level 5 autonomous driving vehicles. They are anticipated to be mass-produced in the upcoming three to four years from now.

As per information, Tesla might divide the next-gen auto chips order between the two companies i.e., Samsung and TSMC. The company has not declared a shift from TSMC to Samsung.  An industry official aware of the situation said that dividing the chip production is a possible option for Tesla. Reportedly, the chips will enter the production phase in 2024 till then Tesla has enough time to decide.