Samsung Electronics Chairman Lee Jae-Yong and Tesla CEO Elon Musk met in person at Samsung’s chip complex in Silicon Valley to discuss strengthening cooperation in future tech industries, particularly on chips for fully autonomous vehicles.
This was the first time the two business leaders met in person. The meeting was attended by Samsung’s top executives, including co-CEO Kyung Kye-hyun and foundry business chief Choi Si-young.
Samsung and Tesla have been working together since 2019 to develop autonomous driving chips, and industry observers are paying attention to whether the meeting would give Samsung an edge against rival Taiwan Semiconductor Manufacturing Co. The two are competing to win a major contract to produce next-generation chips for Tesla.
With the latest meeting, keen attention is focused on whether Samsung can secure more chip orders from Tesla. Currently, Samsung produces advanced autonomous-driving chips for Nvidia and Mobileye.
Samsung has recently introduced the 4-nanometer production process to grow its autonomous vehicle business and is looking to expand and find new partners in the autonomous vehicle sector. Samsung aims to increase the proportion of non-mobile sales in its foundry business by more than half by 2027.
According to market research firms, the global automotive chip market is expected to grow to $400 billion in 2024 and $700 billion in 2028. As the auto sector continues its shift to electric and autonomous vehicles, the number and types of chips used are expected to diversify.
Chairman Lee returned home after a 22-day business trip to the US, during which he accompanied President Yoon Suk Yeol as part of a 122-person business delegation. Lee met with some 20 CEOs of global companies, including Google, Microsoft, Nvidia, and Johnson & Johnson.
During the meetings, he shared Samsung’s mid-to-long-term vision with global business leaders and explored ways they could cooperate to lead futuristic industries.
Samsung is facing the challenge of cultivating new future growth drivers amid a downturn in the global ICT market. At a crossroads, Lee made an effort to use his global network to explore new business strategies and made a breakthrough, a source with knowledge of the meetings said on condition of anonymity.
Samsung is not the only company eyeing the growing autonomous vehicle market. Other players, such as Intel and Qualcomm, are also developing autonomous driving chips. Despite this competition, Samsung is optimistic about its chances in the industry.
As part of its plans to grow its autonomous vehicle business, the company recently introduced the 4-nanometer production process, which is expected to help it produce more advanced autonomous driving chips.
The meeting between Samsung’s Lee and Tesla’s Musk also comes at a time when global chip shortages are causing disruptions in the automotive industry. Car makers have been forced to cut production due to a lack of semiconductors, leading to long wait times for customers and significant financial losses for automakers.
As such, the partnership between Samsung and Tesla could help the latter avoid the worst effects of the global chip shortage by securing a reliable supply of chips for its vehicles. This could give Tesla an edge over its competitors in the race to develop fully autonomous vehicles.
In conclusion, the meeting between Samsung’s Lee and Tesla‘s Musk is a significant development in the ongoing competition to develop the next generation of autonomous driving chips. With the global automotive chip market expected to grow rapidly in the coming years, companies like Samsung and Tesla are keen to secure their position in the industry. The outcome of this meeting could have a significant impact on the future of both companies and the global automotive industry as a whole.