Samsung Elec signs $16.5 billion deal to make chips for global firm
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Samsung Elec signs $16.5 billion deal to make chips for global firm
Samsung signs $16.5 billion chip supply deal, shares rise 3.5%. Deal details undisclosed until 2033, involves contract chip manufacturing. Deal comes as Samsung is struggling to compete in the race to make artificial intelligence chips. South Korea is seeking U.S. partnerships in chips and shipbuilding as it is making last-ditch efforts to reach a trade deal to eliminate or cut potential 25% U.N. tariffs, analysts say.
Summary
Companies Samsung signs $16.5 billion chip supply deal, shares rise 3.5%
Deal details undisclosed until 2033, involves contract chip manufacturing
Samsung struggles with AI chip competition, losing market share to TSMC
SEOUL, July 28 (Reuters) – Samsung Electronics (005930.KS) , opens new tab said on Monday it has signed a $16.5 billion deal to supply chips for an unidentified major global company, sending its shares up 3.5%.
The South Korean tech giant said the deal signed on Saturday was for contract chip manufacturing and details of the agreement including the counterpart and terms would not be disclosed until the contract is completed at the end of 2033.
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The deal comes as Samsung is struggling to compete in the race to make artificial intelligence chips, which has hit its profits and share price.
The deal comes as South Korea is seeking U.S. partnerships in chips and shipbuilding as it is making last-ditch efforts to reach a trade deal to eliminate or cut potential 25% U.S. tariffs.
It is not clear how the order would affect Samsung’s plan to start production at its new factory in Texas, which has been delayed as it had struggled to win major customers.
Samsung is grappling to boost production yields of its latest 2-nanometer technology, and the order is unlikely to involve the cutting-edge tech, Lee Min-hee, an analyst at BNK Investment & Securities, said.
Samsung has been losing market share to TSMC in contract manufacturing, underscoring technological challenges the firm faces in mastering advanced chip manufacturing to lure the likes of Apple and Nvidia away from TSMC, analysts said.
($1 = 1,383.6800 won)
Reporting by Jack Kim, Hyunjoo Jin, Heekyong Yang Jihoon Lee Editing by Ed Davies
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