Semiconductors

Samsung chair heads to Washington amid chip deal with Tesla

Samsung Electronics Chairman Jay Y. Lee has embarked on a business trip to Washington just one day after announcing a landmark $16.5 billion chip supply agreement with Tesla. 

The deal, which involves advanced semiconductors manufactured at Samsung’s Texas facility, signals a deepening partnership between the South Korean tech giant and the American electric vehicle leader.

While Samsung confirmed Lee’s departure, it offered no details about the agenda. However, South Korean media, including Yonhap News Agency, suggest that Lee’s presence in the US may align with broader trade discussions between Seoul and Washington. 

With a 1 August deadline looming, South Korean officials are working to finalise a trade agreement to ease or eliminate tariffs threatened by the US on key Korean exports.

The diplomatic push has drawn high-level participation from Seoul. Finance Minister Koo Yun-cheol is preparing to meet with US Treasury Secretary Scott Bessent, while Foreign Minister Cho Hyun is scheduled to hold talks with Secretary of State Marco Rubio. 

Though the South Korean presidential office has not commented on Lee’s involvement, his timing suggests a coordinated effort between the nation’s corporate and political leadership to safeguard industrial ties with the US.

Source: Reuters

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Samsung’s $16.5B Tesla chip deal sparks optimism but execution remains crucial

After securing a landmark $16.5 billion deal to supply AI chips to Tesla, Samsung Electronics saw its stock initially dip on Tuesday, only to recover by midday. The short-lived market hesitation reflected a broader investor calculation: while the agreement represents a significant breakthrough for Samsung’s underperforming contract chipmaking division, it also places the company under intense scrutiny to prove it can deliver at scale and quality.

The deal, confirmed over the weekend by Tesla CEO Elon Musk, will see Samsung’s facility in Taylor, Texas, produce the next-generation AI6 chips, expected to power Tesla’s future self-driving vehicles, robotics, and data infrastructure. For Samsung, which has struggled to attract major clients for the Texas site due to low chip yield rates, this partnership offers financial relief and a reputational lift.

The company’s memory chip business, once the crown jewel of its semiconductor empire, has recently stumbled, particularly due to delays in delivering high-bandwidth memory (HBM) chips to Nvidia. These setbacks have affected profits and placed Samsung at a competitive disadvantage, especially against Taiwanese rival TSMC and domestic competitor SK Hynix, which enjoy stronger market positions.

While Samsung remains a global leader in memory chips, it lags far behind TSMC in foundry operations, where it manufactures chips designed by external clients. Analysts agree that securing further high-profile contracts will depend on this deal and Samsung’s operational execution moving forward.

Some analysts believe that Tesla’s decision to work with Samsung may reflect favourable negotiation terms for the automaker, given Samsung’s pressing need to demonstrate its manufacturing credibility. The long-term nature of the deal, likely spanning several years, also provides strategic advantages to both sides. Producing the chips within the US, instead of relying on East Asian facilities, reduces exposure to potential supply chain shocks and geopolitical trade tensions, particularly around tariffs.

Despite the promise of the Tesla partnership, market experts urge patience. The chips in question are unlikely to appear in Tesla’s consumer vehicles for at least a year or two, according to Hargreaves Lansdown analyst Matt Britzman.

Source: Reuters

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Huawei challenges Nvidia with AI super server

Huawei has unveiled its most powerful AI server, the CloudMatrix 384, to challenge Nvidia’s grip on the high-performance AI infrastructure market.

The system, launched at the World AI Conference in Shanghai, uses 384 Ascend 910C chips, significantly outnumbering Nvidia’s 72 B200 GPUs in the GB200 NVL72.

Although Nvidia’s GPUs remain more powerful individually, Huawei’s design relies on stacking and high-speed chip interconnection to boost overall performance.

The company claims the CloudMatrix 384 can deliver 300 petaflops of computing power, well above Nvidia’s 180 petaflops, though it consumes nearly four times more energy.

The US recently reversed its ban on Nvidia’s H20 chip exports to China, seeking to curb Huawei’s momentum. However, ongoing reports of smuggled Nvidia GPUs raise doubts over the effectiveness of these restrictions.

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Samsung strikes $16.5B semiconductor deal with Tesla

The South Korean tech giant, Samsung Electronics, has secured a $16.5 billion deal to manufacture semiconductors for Tesla Inc., signalling a potential revival for its ailing foundry division.

The long-term agreement, slated to extend through 2033, was confirmed on Monday, 28 July and highlights rising confidence in Samsung’s cutting-edge chip technology, especially its 2-nanometer production line.

Although Samsung declined to name Tesla as the client, insiders familiar with the deal identified the electric vehicle leader as the buyer.

News of the pact propelled Samsung’s shares upward by 3.5%, its sharpest intraday rise in nearly a month; a clear indicator of investor optimism following a lull in the semiconductor foundry sector.

In recent quarters, Samsung has grappled to hold its ground in the cutthroat chip manufacturing market, seeing its global foundry share dip to 7.7% from 8.1%.

By contrast, market leader Taiwan Semiconductor Manufacturing Co. (TSMC) commands a 67.6% share, operating at full capacity, while Samsung struggles to fill its production lines, straining its foundry revenue.

Analysts estimate the Tesla deal could lift Samsung’s foundry sales by 10% annually, injecting fresh vigour into a faltering business segment.

Furthermore, this breakthrough may pave the way for new contracts with other fabless chipmakers, broadening Samsung’s client portfolio and securing steady growth in an unsteady industry.

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Amazon exit highlights deepening AI divide between US and China

Amazon’s quiet wind-down of its Shanghai AI lab underscores a broader shift in global research dynamics, as escalating tensions between the US and China reshape how tech giants operate across borders.

Instead of expanding innovation hubs in China, major American firms are increasingly dismantling them.

The AWS lab, once central to Amazon’s AI research, produced tools said to have generated nearly $1bn in revenue and over 100 academic papers.

Yet its dissolution reflects a growing push from Washington to curb China’s access to cutting-edge technology, including restrictions on advanced chips and cloud services.

As IBM and Microsoft have also scaled back operations or relocated talent away from mainland China, a pattern is emerging: strategic retreat. Rather than risking compliance issues or regulatory scrutiny, US tech companies are choosing to restructure globally and reduce local presence in China altogether.

With Amazon already having exited its Chinese ebook and ecommerce markets, the shuttering of its AI lab signals more than a single closure — it reflects a retreat from joint innovation and a widening technological divide that may shape the future of AI competition.

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EU and Japan deepen AI cooperation under new digital pact

In May 2025, the European Union and Japan formally reaffirmed their long-standing EU‑Japan Digital Partnership during the third Digital Partnership Council in Tokyo. Delegations agreed to deepen collaboration in pivotal digital technologies, most notably artificial intelligence, quantum computing, 5G/6G networks, semiconductors, cloud, and cybersecurity.

A joint statement committed to signing an administrative agreement on AI, aligned with principles from the Hiroshima AI Process. Shared initiatives include a €4 million EU-supported quantum R&D project named Q‑NEKO and the 6G MIRAI‑HARMONY research effort.

Both parties pledge to enhance data governance, digital identity interoperability, regulatory coordination across platforms, and secure connectivity via submarine cables and Arctic routes. The accord builds on the Strategic Partnership Agreement activated in January 2025, reinforcing their mutual platform for rules-based, value-driven digital and innovation cooperation.

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North Korea turns to Russia for AI development help

North Korea is dispatching AI researchers, interns and students to countries such as Russia in an effort to strengthen its domestic tech sector, according to a report by NK News.

The move comes despite strict UN sanctions that restrict technological exchange, particularly in high-priority areas like AI.

Kim Kwang Hyok, head of the AI Institute at Kim Il Sung University, confirmed the strategy in an interview with a pro-Pyongyang outlet in Japan. He admitted that international restrictions remain a major hurdle but noted that researchers continue developing AI applications within North Korea regardless.

Among the projects cited is ‘Ryongma’, a multilingual translation app supporting English, Russian, and Chinese, which has been available on mobile devices since 2021.

Kim also mentioned efforts to develop an AI-driven platform for a hospital under construction in Pyongyang. However, technical limitations remain considerable, with just three known semiconductor plants operating in the country.

While Russia may seem like a natural partner, its own dependence on imported hardware limits how much it can help.

A former South Korean diplomat told NK News that Moscow lacks the domestic capacity to provide high-performance chips essential for advanced AI work, making large-scale collaboration difficult.

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New AI strategy aims to attract global capital to Indonesia

Indonesia is moving to cement its position in the global AI and semiconductor landscape by releasing its first comprehensive national AI strategy in August 2025.

Deputy Minister Nezar Patria says the roadmap aims to clarify the country’s AI market potential, particularly in sectors like health and agriculture, and provide guidance on infrastructure, regulation, and investment pathways.

Already, global tech firms are demonstrating confidence in the country’s potential. Microsoft has pledged $1.7 billion to expand cloud and AI capabilities, while Nvidia partnered on a $200 million AI centre project. These investments align with Jakarta’s efforts to build skill pipelines and computational capacity.

In parallel, Indonesia is pitching into critical minerals extraction to strengthen its semiconductor and AI hardware supply chains, and has invited foreign partners, including from the United States, to invest. These initiatives aim to align resource security with its AI ambitions.

However, analysts caution that Indonesia must still address significant gaps: limited AI-ready infrastructure, a shortfall in skilled tech talent, and governance concerns such as data privacy and IP protection.

The new AI roadmap will bridge these deficits and streamline regulation without stifling innovation.

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5G market grows as GCT begins chipset rollout

GCT Semiconductor Holding, Inc. has begun delivering samples of its latest 5G chipsets to lead customers, including Airspan Networks and Orbic. The company offers chip and module formats to meet specific testing needs.

Initial shipments aim to fulfil early demand, after which GCT will work with clients to assess performance and establish production requirements. The firm is well positioned to scale with a robust supply chain and deep experience in high-speed connectivity.

The fabless semiconductor designer targets mid-tier 5G applications and plans to introduce a Verizon-certified module. GCT has said it remains focused on accelerating its role in the global 5G market.

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Critical minerals challenge AI’s sustainable expansion

Recent debates on AI’s environmental impact have overwhelmingly focused on energy use, particularly in powering massive data centres and training large language models.

However, a Forbes analysis by Saleem H. Ali warns that the material inputs for AI, such as phosphorus, copper, lithium, rare earths, and uranium, are being neglected, despite presenting similarly severe constraints to scaling and sustainability.

While major companies like Google and Blackstone invest heavily in data centre construction and hydroelectric power in places like Pennsylvania, these energy-focused solutions do not address looming material bottlenecks.

Many raw minerals essential for AI hardware are finite, regionally concentrated, and environmentally taxing to extract. However, this raises risks ranging from supply chain fragility to ecological damage and geopolitical tension.

Experts now say that sustainable AI development demands a dual focus, not only on low-carbon energy, but on keeping critical mineral supply chains resilient.

Without a coordinated approach, AI growth may stall or drive unsustainable resource extraction with long-term global consequences.

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