Tesla Joins Forces with Samsung for Production of Next-Gen Full Self-Driving Chips

By Kevin Armstrong
Tesla has only begun issuing hardware 4.0, but they're already looking ahead to hardware 5.0
Tesla has only begun issuing hardware 4.0, but they're already looking ahead to hardware 5.0
@GreenTheOnly/Twitter

Tesla is reportedly set to collaborate with Samsung Electronics, the leading global memory chipmaker. This partnership aims to manufacture Tesla's forthcoming FSD chips, vital components in the next phase of Tesla's autonomous driving technology.

Utilizing Samsung's advanced 4-nanometer node technology, these FSD chips will serve as the central intelligence for Tesla's forthcoming Hardware 5.0 computers. The Korea Economic Daily reported insiders believe Tesla's ambitious strategy involves mass-producing these innovative systems within approximately three to four years.

Tesla's choice to collaborate with Samsung marks a deviation from its prior partnership with Taiwan Semiconductor Manufacturing Co. (TSMC). Now, Tesla is said to be exploring the possibility of partnering with both Samsung and TSMC or transitioning to Samsung alone for the large-scale production of these vital fifth-generation auto chips.

Strengthening Technological Alliances: The Musk-Lee Meeting

This strategic turning point originated from a crucial meeting in May 2023 between Tesla's CEO, Elon Musk, and Samsung Group's leader, Lee Jay-yong. The discussion was centered on enhancing and expanding the technological alliance between their respective companies. The international business community knows Lee as Jay Y. Lee, and during this meeting, he proposed several enticing terms, including favorable contract prices.

Samsung has a history of supplying Tesla with earlier versions of FSD chips. These chips have been integral components in Tesla's vehicles. Despite this established relationship, Tesla initially selected TSMC over Samsung for the next-generation FSD chip production, with the latter believed to have superior manufacturing yields at the cutting-edge 4 nm process.

However, industry insiders have since reported that Samsung has made significant strides in enhancing its production yield, which is now said to be nearly on par with TSMC's.

Market Impact: The Rising Demand for Advanced Auto Chips

The global auto chip market is forecasted to experience dramatic growth in the coming years. It's expected to nearly double from this year's estimated worth of $76 billion to a staggering $143 billion by 2029. This projected growth can be attributed to the increasing demand for advanced auto chips spurred by global carmakers' widespread adoption of autonomous and in-vehicle infotainment systems.

Tesla's hardware 4.0 is still at the beginning of its useful life, in fact, it's not even available in every Tesla yet. However, technology is constantly evolving and as Tesla engineers finish designing one piece of hardware, they begin on the next big thing.

Hardware and software will continue to evolve, even after Tesla achieves full self-driving. The goal will always be to be able to drive safer, faster, and more efficiently.

Musk Teases New Model for Early 2025 That Will Use a Mix of Next-Gen and Current Platforms

By Cláudio Afonso

“We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025”. This was one of the key sentences that were part of Tesla’s deck shared on Tuesday directly before its financial results.

Since Reuters’ report a few weeks ago saying Tesla had “scrapped” the highly expected cheaper model— which Elon quickly denied on X —retail and institutional shareholders started asking for more details on Tesla’s product roadmap for 2024 and beyond.

In the earnings conference call, Elon Musk reiterated that Tesla expects to launch the next model in “early 2025, if not late this year”.

“We've updated our future vehicle lineup to accelerate the launch of new models ahead of previously mentioned start of production in the second half of 2025. So, we expect it to be more like the early 2025, if not late this year. “

Over concerns of temporary production halts to update the factories for these new models, Musk said that Tesla will produce new models with certain aspects from their next-generation platform and current models. This will reduce the number of changes needed on production lines and allow Tesla not only to ramp up production faster but also to get the vehicles to market quicker.

Model Y Redesign

Tesla appears to hit that their next-gen vehicle will be less “next-gen” than they were initially aiming for, but to get a new vehicle out the door by late 2024, the process would already have to be in motion. Tesla may likely be referring to the redesigned Model Y, which is expected to reuse many parts from the new Model 3. Earlier this year, Tesla said that the redesigned Model Y will not be released this year, so it makes sense that they’re looking to speed up that production.

Tesla CEO concluded by saying that these measures will allow Tesla to reach a capacity of over 3 million units. Tesla produced 1.84 million vehicles in 2023. However, this year they’re ramping up Cybertruck production and introduced the new Model 3 into new markets.

And we think this should allow us to get to over 3 million vehicles of capacity when realized to the full extent.

Tesla reported on Tuesday its earnings results followed by a conference call where it teased its upcoming Robotaxi and its next-generation platform saying its “purpose-built Robotaxi product will continue to pursue a revolutionary ‘unboxed’ manufacturing strategy”.

Earlier in the day, Tesla announced the new Performance variant of its sedan Model 3 with deliveries in the United States starting already next month. The new version starts at $45,490 (after applying the $7,500 Federal EV tax credit) and goes from 0 to 60mph in 2.9 seconds.

Tesla on FSD: Close to License Deal With Major Automaker, Announces Miles Driven on FSD v12

By Cláudio Afonso

On Tuesday Tesla reported its earnings results followed by a conference call that brought several updates on the company’s roadmap for future vehicles, autonomous driving, Optimus and much more.

While answering a question from Goldman Sachs analyst Mark Delaney about updates on the licensing of Tesla’s Full Self-Driving (FSD) technology, Elon Musk said they’re talking to one major auto manufacturer and there’s “a good chance” the company signs the first deal before year-end. However, he went on to say that it would probably be three years before the necessary changes are integrated into the car.

I think we have a good chance we do sign a deal this year

Brings Benefits to Tesla

The technology would require other automakers to start using the same cameras and hardware as Tesla, meaning that Tesla may not only generate money from licensing FSD but also from selling the hardware itself. However, there would be other benefits as well. When licensing FSD, Tesla would likely own the data gathered with the system well, further helping them with data and edge cases that need to be solved to reach full autonomy.

people don't understand all cars will need to be smart cars… Once that becomes obvious, I think licensing becomes not optional.

Tesla’s Chief Financial Officer Vaibhav Taneja commented pointing out that future partners “take a lot of time in their product life cycle” resulting in a gap between the deal signing and the arrival in the market of Tesla’s FSD software.

Miles Driven With FSD

On the conference call, Musk added that Tesla now has over 300 million miles that have been driven with FSD v12 since it was launched just last month. He added that it's becoming “very clear that the vision-based approach with end-to-end neural networks is the right solution for scalable autonomy”.

Tesla said it will continue to increase its “core AI infrastructure capacity in the coming months” adding that in the first quarter, it completed the transition to hardware 4.0 with China now receiving the upgraded FSD computer and cameras.

Over the weekend, Tesla reduced the price of FSD dropping it from $12,000 to $8,000 for customers in the United States and from CA$16,000 to CA$11,000 in Canada.

Earlier this month, Tesla implemented a 50% price reduction for FSD subscriptions in the U.S. and introduced the subscription model in Canada at a great value of CA$99 per month.

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