Samsung Electronics is facing one of the most paradoxical moments in its corporate history. On the one hand, it has landed historic multi-billion-dollar deals with Tesla ($16.5B) and Apple ($100B partnership tie-in). On the other hand, its semiconductor profits collapsed by 94% YoY in Q2 2025, exposing deep vulnerabilities in its core business.

So how do these events correlate? And what do they mean for Samsung’s future revenue trajectory?

The Profit Crisis

In Q2 2025, Samsung reported one of its steepest declines ever in semiconductor profitability. Operating profit fell to just ₩0.4 trillion (~$287M) from ₩6.45 trillion a year earlier, despite overall group revenue remaining flat at ₩74.6 trillion (~$53.5B).

The reasons were clear:

1. Weak AI chip demand in China, worsened by U.S. export controls.
2. Inventory write-downs in its DRAM/NAND divisions.
3. Fierce competition from TSMC and SK Hynix in high-bandwidth memory (HBM) for AI accelerators.

This profit collapse underscores Samsung’s heavy exposure to cyclical memory markets and its urgent need to diversify semiconductor revenue streams.

Tesla’s $16.5B Lifeline

In late July 2025, Tesla signed a $16.5 billion contract with Samsung to manufacture its upcoming AI6 (A16) processors. These chips will power Tesla’s future self-driving and AI systems, with production centered in Samsung’s new Texas fab.

Key takeaways:

1. Timeline: Ramp expected between 2028–2033.
2. Tech: Advanced AI processors requiring cutting-edge yields.
3. Strategic importance: Elon Musk himself described the deal as “hard to overstate.”

For Samsung, this represents not just revenue, but validation of its foundry ambitions in the U.S., positioning it as a credible alternative to TSMC.

Apple’s $100B Bet on Samsung

At almost the same time, Apple expanded its U.S. investment commitment to $600 billion over four years, with Samsung as a key partner. Apple will leverage Samsung’s Austin, Texas fab to produce next-generation image sensors and chips using novel processes never deployed before.

The significance:

1. Deepening Apple–Samsung ties, despite a history of legal disputes.
2. Geographic diversification of Apple’s supply chain away from China.
3. Steady demand injection for Samsung’s foundry business over the coming decade.

Correlating the Events

1. The Collapse and the Contracts: Samsung’s earnings crash highlights its reliance on memory chips. The Tesla and Apple deals, in contrast, show its foundry services gaining traction.
2. Geography Matters: Both Tesla and Apple contracts are U.S.-centric, reflecting a strategic pivot toward North American manufacturing amid geopolitical tension.
3. Long-Term vs. Short-Term: While current profits are under pressure, these contracts are future revenue lifelines, expected to stabilize and eventually grow semiconductor margins.

Future Revenue Outlook

Short-Term (2025–2027)

1. Modest recovery as memory markets stabilize.
2. Early ramp-up of Apple projects in Texas.
3. Tesla deal mostly in planning/prototyping stages.

Mid-Term (2028–2030)

1. Full-scale production of Tesla’s AI6 chips begins.
2. Apple’s sensor and chip volumes scale up.
3. Foundry revenue grows as a larger share of total semiconductor revenue.

Long-Term (2030–2033)

1. Samsung becomes a stronger global foundry player, leveraging both consumer (Apple) and automotive/AI (Tesla) contracts.
2. Potential to rival TSMC in U.S. fab dominance, assuming execution and yields meet targets.

Risks Ahead

1. Execution Risk: Yield delays in Texas could push back revenue timelines.
2. Competition: TSMC’s leadership in advanced nodes will remain a major challenge.
3. Policy Uncertainty: U.S.–China trade restrictions could either favor Samsung (if U.S. partners lean on Korean supply) or hurt (if Chinese markets remain cut off).

Conclusion

Samsung’s story in 2025 is a tale of two realities: collapsing profits in its legacy businesses, and record-breaking contracts that promise a lucrative future. If it executes well on its Tesla and Apple partnerships, the company may transform its U.S. fab operations from a cost burden into a revenue engine—one that could define its semiconductor future well into the next decade.

Sources

1. Samsung’s Q2 2025 earnings report – 94% profit drop
2. Tesla’s $16.5B chip deal with Samsung
3. Apple’s $100B U.S. expansion with Samsung partnership
4. Apple newsroom release on $600B U.S. investment