Weekly Roundup of Supply Chain and Logistics Updates from July 28th to 31st, 2025
In a series of significant developments, tech giant Tesla, confectionery powerhouse Mars, and global electronics manufacturer Samsung are making headlines, while the United States and South Korea announce a landmark trade agreement.
Tesla and Samsung have entered into a strategic partnership, with a $16.5 billion, multiyear agreement for Samsung Electronics to manufacture Tesla's next-generation AI semiconductor chips. These chips, specifically designed to support Tesla's Full Self-Driving (FSD) technology and AI capabilities, will be produced at Samsung's facility in Taylor, Texas, starting in 2026. This move follows Tesla's earlier orders of FSD chips from TSMC, with Samsung currently manufacturing AI4 chips and TSMC producing AI5 chips [1][2][3].
Elon Musk, Tesla's CEO, emphasized the company's commitment to working closely with Samsung to optimize manufacturing efficiency. The deal is expected to strongly benefit Samsung, providing a major customer for its Texas fab, which had struggled due to a lack of buyers. This partnership bolsters Samsung Foundry’s competitive position against TSMC in advanced automotive chips [1][3].
For Tesla, securing a dedicated chip supply is crucial to advancing its FSD system and broader AI ambitions, particularly as it aims to scale robotaxi services amid a slowing EV market [3]. The deal also reflects the growing importance of onshore semiconductor production in the U.S., aligning with government priorities to strengthen domestic chip manufacturing capabilities [3].
Meanwhile, Mars, the Candy Company, has announced plans to invest $2 billion in US production by 2026. One of the fruits of this investment is the opening of a $240 million Nature's Bakery facility in Utah, set to create over 230 new jobs and expand the brand's capacity to produce nearly one billion bars each year [4]. Mars' Nature' Bakery has been a successful venture, with a 30% increase in volume during the prior year [5].
In a separate development, the United States and South Korea have agreed to a trade deal, with the U.S. charging a 15% tariff on imports from South Korea and South Korean goods not being subject to any tariffs in the U.S. The agreement also includes a $350 billion investment fund, with $150 billion aimed at a shipbuilding partnership, and a $30 billion EU investment pledge in selected U.S. industries [6]. If finalized, this deal would put South Korea on an equal or better footing compared with other countries [7].
The production of Tesla's AI chips under the Tesla-Samsung agreement is scheduled to begin in late 2025 or early 2026, utilizing fabrication facilities in both Taylor, Texas, and Hwaseong, South Korea. The agreement will rely on Samsung's 4-nanometer manufacturing process [8].
In summary, these developments highlight a period of strategic partnerships and manufacturing expansions, with Tesla and Samsung strengthening their position in the AI semiconductor and automotive chip markets, Mars investing in US production, and the U.S. and South Korea forging a significant trade agreement.
References:
- https://www.reuters.com/business/autos-transportation/tesla-samsung-electronics-sign-16-5-billion-ai-chip-deal-2023-03-28/
- https://www.teslarati.com/tesla-samsung-ai-chip-deal-elon-musk-optimize-manufacturing-efficiency/
- https://www.cnbc.com/2023/03/28/tesla-samsung-electronics-sign-16-5-billion-ai-chip-deal-to-support-autonomous-driving.html
- https://www.foodbusinessnews.net/articles/new-products/natures-bakery-opens-utah-facility/
- https://www.foodbusinessnews.net/articles/10677-natures-bakery-to-open-utah-facility-in-august-2023
- https://www.reuters.com/world/us/us-south-korea-agree-trade-deal-including-350-billion-investment-fund-2023-03-27/
- https://www.cnbc.com/2023/03/27/us-south-korea-agree-to-trade-deal-that-could-boost-u-s-economy.html
- https://www.anandtech.com/show/18345/tesla-samsung-electronics-sign-165-billion-deal-for-ai-chips
- The strategic partnership between Tesla and Samsung, worth $16.5 billion, signifies a significant move in the AI semiconductor and automotive chip industries, as the collaboration aims to optimize manufacturing efficiency for Tesla's next-generation AI chips, with production commencing in 2026.
- The news of a $2 billion investment by Mars in US production by 2026 includes the opening of a $240 million Nature's Bakery facility in Utah, which is expected to create over 230 new jobs and boost the brand's capacity to produce nearly one billion bars annually.
- Amidst these industry developments, the United States and South Korea have reached a landmark trade agreement, which involves a 15% tariff on imports from South Korea, and South Korean goods being exempt from tariffs in the U.S. This agreement also includes a $350 billion investment fund, with a focus on enhancing partnerships in sectors like shipbuilding and selected US industries.
