Tech giant Samsung Electronics announced on Monday a strategic deal with Tesla to supply semiconductor chips worth $16.5 billion, intended for the next generation of electric vehicles. The news triggered a wave of investor confidence and gave the Korean company one of its best-performing months in recent memory.
📈 Samsung shares surged 10% immediately after the announcement, reaching 73,700 KRW. In July alone, the stock gained over 20%, marking its strongest monthly performance in years. Samsung was also the main driver behind the Kospi index's 0.55% rise.
A New Push for the U.S. Market
Samsung hopes the Tesla deal will not only guarantee consistent chip demand but also open doors to new external clients. Its U.S. subsidiary now has access to the Taylor, Texas facility—previously inactive due to construction delays—which is expected to start operations thanks to the new partnership.
The 2022 CHIPS and Science Act created a favorable environment for companies like Samsung to expand production in the U.S. The federal government has committed billions in subsidies and tax incentives for semiconductor firms, including Intel.
Who’s Saving Whom—Tesla or Samsung?
According to Morgan Stanley analysts, the Tesla partnership could boost Samsung’s market value by more than $50 billion. Samsung is also benefitting from the struggles of competitors like Intel, which continues to face domestic production issues. Reports confirming development of the A16 chip in the U.S. underline Samsung’s technological edge.
In parallel, Samsung is supplying HBM3 memory chips for Nvidia’s AI systems—resuming deliveries to China. The convergence of AI and semiconductor demand could create new growth opportunities.
A Word of Caution
However, some analysts warn the stock may be overheated. Technical indicators show Samsung shares are in overbought territory, suggesting short-term caution despite long-term potential.
Samsung is set to report its Q2 earnings this Thursday, and investors are eagerly awaiting further details on the Tesla deal, as well as the company’s outlook amid ongoing U.S.–China trade tensions.
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