Samsung’s deal and copper tariff scramble
Industry upheaval is forcing companies to rethink how they secure critical components.
From Samsung’s $16.5 billion agreement to produce next-generation AI chips at its new Texas fab to a global rush of copper shipments ahead of a looming 50% tariff, supply chains are under unprecedented strain. These twin developments showcase the ongoing entanglement of geopolitics and the supply chain that has resulted in disruption after disruption.
More broadly, they signal a structural shift for the chip industry that makes sourcing and manufacturing decisions inseparable from global policy. To stay competitive, organizations must mature from transactional procurement to strategic supply chain management that prioritizes resilience and adaptability.
Samsung secures $16.5 billion Tesla chipmaking contract
Samsung Electronics has landed a major win for its lagging foundry division. The South Korean chipmaker announced it is finalizing a $16.5 billion contract to manufacture Tesla’s next-generation AI6 chips at its Taylor, Texas, fab.
The deal, running through 2033, is one of the most significant contract semiconductor manufacturing partnerships in recent memory. It is a major milestone for Samsung in its quest to become a top-tier foundry player after the division has struggled to fill its capacity in recent months.
The AI6 chips are central to Tesla’s autonomous vehicle platforms and its Dojo supercomputing clusters. Samsung will fabricate them using its advanced 4nm-class process nodes. Notably, the deal includes collaboration agreements to optimize yield and enhance manufacturing efficiency. According to sources familiar with the contract, Tesla CEO Elon Musk will be directly involved in overseeing production milestones.
The announcement sent Samsung’s stock higher by nearly 6%, reaffirming investor confidence in the South Korean giant’s long-term competitiveness as a contract chipmaker.
Citi analysts have highlighted the Tesla deal as a pivotal moment in Samsung’s foundry evolution. Historically focused on in-house chip development for its mobile and consumer devices, Samsung now has an excellent opportunity to expand its reach with external customers.
Experts claim that the deal, beyond its financial benefit, could help Samsung attract other customers to its foundry business. That would be a major boon as the firm seeks to capture a larger share of the outsourced semiconductor manufacturing market, which has long been dominated by TSMC. The latter maintains a 67.6% share of the global foundry segment as of the beginning of 2025.
For Tesla, inking a deal with Samsung will usher in a period of rapid adoption spanning three generations. Musk wrote on X that the carmaker will soon shift from its existing AI4 chips (made by Samsung) to the AI5 chip produced by TSMC. It will then move back to Samsung when the AI6 chip is ready.
As Tesla pursues fully autonomous self-driving for its vehicles, moving so rapidly through chip generations puts into question whether older cars will have the processing power to keep up. Despite Tesla’s previous statements claiming that all vehicles from 2016 on would have the hardware needed to drive with full autonomy, it appears increasingly unlikely past customers will see that pledge fulfilled.
Sourceability can help companies leverage changes in manufacturers with end-to-end support, ensuring critical components are secured from reliable suppliers. Our Datalynq platform’s risk monitoring and strategic sourcing intelligence tools help buyers anticipate production bottlenecks, lock in competitive pricing, and maintain alignment with major OEM schedules.
Copper shipping frenzy ahead of 50% tariff
A global copper scramble is underway in response to the Trump administration’s announcement of a 50% tariff on raw copper imports effective August 1. Traders and manufacturers are now racing to front-load shipments into the U.S. to sneak in before the deadline. As a result, ports are seeing increased congestion, and copper prices have surged.
Copper futures on U.S. exchanges spiked to record highs in late July on the news, pricing in not just the tariff, but the broader implications of restricted global copper flows. Despite its substantial mining base, the U.S. lacks the smelting infrastructure to fully process raw ore at scale. With just 585,000 tons of annual capacity, the shortfall leaves the U.S. critically exposed to upstream supply chain risks.
The immediate concern, of course, is operational. Delays at ports from Houston to Los Angeles are already complicating timely deliveries of copper and other inputs vital to chip production. But there are strategic long-term risks to consider as well.
By disrupting the global flow of copper, the tariff risks driving key exporters like Chile and Canada to redirect shipments to more stable trade partners like China. Such moves would fragment the supply chain and increase competition for already limited capacity.
According to research from the Center for Strategic and International Studies (CSIS), tariffs alone are no substitute for structural resilience. While protectionist measures may aim to revitalize domestic industry, they often fail to address core vulnerabilities like processing bottlenecks and the United States’ continued dependence on foreign mineral production.
For semiconductor supply chains, where copper is an irreplaceable input, the tariff threatens a systemic meltdown. Sourcing teams must treat it as such. Without immediate action, delayed shipments and rising prices can trigger devastating ripple effects down a production line.
This is why diversification is essential. While Sourceability doesn’t directly broker raw materials like copper, our global compliance team is quick to advise customers of upcoming disruptions from tariffs and the impact they can have on the semiconductor supply chain. Early alerts, tariff advisories, and real-time visibility into disruption risks help buyers lock in inventory before market volatility takes hold.
