It was first announced back in July last year that Samsung has inked a significant deal with Tesla to manufacture its next-generation AI chip.

The automaker signed a $16.5 billion manufacturing deal with Samsung which would see the company make its AI6 chips on its 2nm process. The company has now provided an update as to where things stand right now.

Speaking at a shareholders' meeting today, Samsung Electronics President and Head of Foundry Business Han Jin-man said that Samsung expects to begin volume production of the chips next year.

It had previously been confirmed that these chips won't be made in South Korea, rather, they would be made at Samsung's massive chipmaking plant in Texas. Han confirmed that volume production of Tesla's next-generation AI chip, likely to be made on Samsung's 2nm process, will begin in Texas in the second half of 2027.

Tesla will utilize these chips in its future electric vehicles. This isn't the first time Samsung has made chips for Tesla. It previously made the AI4 whereas the current-gen chip, the AI5, is being made by TSMC.

Samsung has emerged as a viable option for companies that require 2nm chipmaking, as there aren't that many companies in the world that can deliver that service. TSMC leads in the contract chipmaking space but its order book has little space for any additional orders at this point in time.