Samsung Foundry finalized a contract with Elon Musk’s xAI to manufacture custom AI chips at its Taylor, Texas fabrication facility, sources familiar with the matter report. The agreement follows a $16.5 billion chip-manufacturing deal with Tesla announced in July.
Samsung ordered three advanced extreme ultraviolet lithography machines from Dutch equipment maker ASML for the Taylor plant. Each machine costs approximately $200 million. These specialized EUV tools enable production of cutting-edge AI chips using Samsung’s 2-nanometer process technology. The order prepares the facility to increase output capacity.
The Taylor fabrication plant, valued at $17 billion, encountered repeated delays from challenges in attracting major customers. As recently as July, the site had virtually no customers, according to NH Investment & Securities analyst Ryu Young-ho. Samsung previously delayed accepting delivery of ASML equipment in 2024 because of weak demand.
It seems that Samsung Foundry has finalized a contract with xAI.
Samsung has ordered three EUV tools for xAI at its U.S. Taylor fab.
— Jukan (@jukan05) December 18, 2025
Operations at the Taylor facility now schedule to begin in early 2026, with production reaching full scale by 2027. xAI represents the second company led by Elon Musk to establish a manufacturing partnership with Samsung Foundry, after Tesla.
xAI, the artificial intelligence startup, develops the Grok chatbot platform. The company recruits developers for custom silicon and allocates substantial resources to application-specific integrated circuits designed for large-scale AI workloads.
Samsung has not revealed the contract value with xAI.
The Taylor facility lies near Tesla’s headquarters in Austin and xAI’s operations. This location supports direct interaction between chip designers and Samsung’s manufacturing teams. Samsung has lagged behind Taiwan Semiconductor Manufacturing Company in the AI chip sector, and the xAI partnership advances its standing in this market.
