Samsung Electronics has secured a landmark $16.5 billion contract to supply semiconductors to Tesla, marking one of the largest chip deals in the electric vehicle and AI sectors.

The agreement, effective from July 26, 2025, will run through December 31, 2033, according to a regulatory filing by Samsung and a confirmation post by Tesla CEO Elon Musk on X.

Although Samsung initially withheld the counterparty’s name, citing a confidentiality request “to protect trade secrets,” Musk later confirmed on X that Tesla is the customer.

“Samsung’s giant new Texas fab will be dedicated to making Tesla’s next-generation AI6 chip,” Musk wrote. “The strategic importance of this is hard to overstate. Samsung currently makes AI4. TSMC will make AI5, which just finished design, initially in Taiwan and then Arizona.”

Musk added that Tesla will actively participate in optimizing Samsung’s chip production.

“Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress,” he said.

He also suggested the actual value of the agreement could exceed $16.5 billion.

A Strategic Bet on AI and EV Hardware

The new deal gives Tesla a critical hardware edge in its race to dominate the AI-driven electric vehicle space. The AI6 chip is believed to power Tesla’s next-generation Full Self-Driving (FSD) and AI inference systems, potentially transforming the company’s vehicles into more autonomous, intelligent machines. Samsung, in turn, gains a marquee client and a fresh opportunity to regain ground in the AI semiconductor race — an area where it has recently fallen behind rivals like SK Hynix and Micron.

The agreement is a boost to Samsung’s foundry business, which has seen sluggish orders in recent quarters and has struggled to match AI demand for memory chips. As recently as April, the company had set a goal to start mass production of 2-nanometer chips, the most advanced manufacturing node currently in development. These chips feature smaller, more compact transistors, delivering greater processing power and energy efficiency — key requirements for high-performance AI workloads.

South Korean media have also speculated that Qualcomm may soon join Tesla in placing orders for chips manufactured on Samsung’s 2nm technology.

Samsung Rallies on News Despite Tough Earnings Outlook

Investors cheered the Tesla news, sending Samsung’s shares soaring more than 6% on Monday, their highest level since September 2024. The deal comes just days ahead of Samsung’s scheduled earnings release on Thursday, where the company is expected to report a more than 50% drop in second-quarter profit. Analysts attribute the sharp decline to underwhelming foundry orders and weak memory chip sales, particularly in high-bandwidth memory (HBM), where Samsung trails rivals.

While SK Hynix has emerged as the lead supplier of HBM chips to AI giant Nvidia, Samsung has reportedly struggled to get its latest HBM offerings certified. A recent report indicates that Nvidia’s validation of Samsung’s new HBM chips has been postponed until at least September, further delaying its attempt to regain footing in a fiercely competitive market.

Foundry Wars and AI Chip Race Intensify

Samsung’s renewed push in the foundry space — particularly with U.S.-based manufacturing — appears to be a calculated move to gain ground against Taiwan Semiconductor Manufacturing Company (TSMC), the dominant force in global chip fabrication. TSMC is currently building out major operations in Arizona and has already secured Tesla’s AI5 chip production.

Samsung now ensures it will remain integral to Tesla’s long-term roadmap by securing the AI6 chip order, especially as competition in AI hardware intensifies. With governments and corporations increasingly seeking supply chain resilience and geographic diversification, Samsung’s U.S. fab in Texas is positioned to play a central role.

But the company isn’t out of the woods yet. Despite the Tesla deal, Samsung warned in its filing that investors should exercise caution, noting that “main contents of the contract have not been disclosed… and there remains a possibility of changes or termination.”

Nevertheless, the strategic value of the partnership cannot be overstated. It is expected to secure the chip supply for Tesla’s future vehicles and AI systems. For Samsung, it’s a chance to reassert itself as a top-tier player in both the foundry and AI semiconductor race, at a time when tech giants are scrambling for silicon.

The Manufacturers Association of Nigeria (MAN) is urging the Central Bank of Nigeria (CBN) to immediately review its monetary policy stance and slash interest rates, warning that the prevailing tight monetary policy is crippling Nigeria’s real sector, especially manufacturing and agriculture.

The call came in reaction to the CBN’s Monetary Policy Committee (MPC) decision at its 301st meeting held July 21–22, 2025, where it voted unanimously to retain the Monetary Policy Rate (MPR) at a record-high 27.5% for the second consecutive time this year.

While the CBN argues that the rate retention is part of a broader plan to sustain the disinflationary momentum, MAN contends the policy has yielded little benefit for producers. In a statement, the association described the CBN’s contractionary stance as a chokehold on manufacturing and real-sector productivity.

Lending rates to manufacturers now exceed 35%, MAN revealed, noting that many operators are now either closing shop, cutting production, or relocating. The association said the consequences are evident in surging production costs, lower capacity utilization, reduced output, widespread layoffs, and rising prices of finished goods.

In 2024, the average capacity utilization of the manufacturing sector fell to 57%, down from 59% the previous year. Worse still, unsold finished goods more than doubled year-on-year, jumping to N2.14 trillion in 2024 from N1.14 trillion in 2023.

MAN said this drastic surge is driven by declining consumer purchasing power, high interest on working capital, and the surging cost of imported inputs, all exacerbated by the steep naira depreciation and forex volatility.

“The expectation of MAN is to have a rate cut that is supported by a robust fiscal policy framework capable of facilitating improved access to long-term loans, enhanced productivity, and sustained economic growth,” the group said. It added that the present policy mix is skewed against production and investment.

Although Nigeria’s inflation rate fell marginally to 22.22% in June 2025 from 22.97% in May, food inflation remains stubbornly high and continues to climb. Experts say inflationary pressures have become structural, with major drivers such as insecurity, high logistics costs, naira volatility, and multiple taxes far beyond the reach of interest rate adjustments.

While manufacturers are the loudest voices, they are not alone. Agribusiness operators, particularly in food processing and commodity value chains, are equally suffocated by high borrowing costs and insecurity in production zones. With bank lending shrinking and microfinance institutions offering loans at 45% and above, many small businesses now rely on cooperative societies or shut down altogether.

MAN’s Policy Prescription

To reverse the trend, MAN rolled out a number of policy recommendations:

• Interest Rate Cut: MAN says the CBN must urgently slash the MPR to reduce the cost of credit, especially to critical sectors like manufacturing, agriculture, and energy.
• Nigeria First Policy: The group wants the government to adopt protectionist industrial policies that prioritize local content, encourage backward integration, and promote local patronage of Nigerian-made goods.
• Boost Agricultural Output: It urged the federal government to tackle insecurity in farming regions and fix logistics bottlenecks in agricultural supply chains. These, it said, will help reduce food inflation and raw material costs for agro-allied industries.
• Stimulate Consumption Through Income Redistribution: MAN emphasized that raising minimum wages, removing excessive taxes, and funding social protection programs could enhance consumer demand, which would in turn stimulate industrial output.

Backstory: MPC Standing Firm

At the last MPC meeting, CBN Governor Olayemi Cardoso said the decision to hold the rate steady was to maintain the momentum of disinflation, noting that the bank’s policies were beginning to show results. The slowdown in the inflation rate is an encouraging sign, he said.

However, analysts believe the marginal drop in headline inflation is not enough reason to maintain a policy that is clearly stifling production, discouraging investment, and worsening unemployment.

All 12 members of the committee voted to retain the rate, signaling a firm consensus in the apex bank to prioritize inflation control over growth stimulation—a move that MAN and other stakeholders fear could prolong Nigeria’s economic stagnation.

Some economists, including those at the Lagos-based Financial Derivatives Company, argue that the CBN should have started easing by now, especially after six months of aggressive hikes earlier in the year. They warn that keeping rates high could deepen the recession risk, especially with GDP growth at a slow pace and business confidence at a historic low.

Others support the CBN’s cautious approach, noting that a premature rate cut could weaken the naira further and reverse recent gains in foreign capital inflows.

Labour Party’s presidential candidate in the 2023 general elections, Peter Obi, has accused President Bola Ahmed Tinubu’s administration of manipulating Nigeria’s economic statistics to mask worsening hardship.

Obi said the government is using false and misleading data to deceive the public about the true state of the economy.

In a post on X (formerly Twitter), Obi referenced Tinubu’s own campaign remarks in 2022, when the then-candidate mocked him for using statistics, saying, “Na statistics we go chop? All I want is to put food on the table of Nigerians.” Two years into that same administration, Obi said, Nigerians are hungrier than ever while Tinubu’s government is “now overfeeding Nigerians with wrong statistics.”

“From wrong unemployment figures to wrong inflation numbers and now GDP debasing, this administration is only trying to paint a positive spin on our deteriorating economic and household conditions,” Obi said.

He emphasized that governance is not guesswork, but requires “sincerity of purpose, character, competence, capacity, and compassion.” The former governor has long warned that data manipulation can lead to disastrous policy choices that ignore the lived experiences of ordinary citizens.

IMF Too Has Raised a Red Flag on Nigeria’s Economic Data

Obi’s claims have gained more traction following fresh concerns from the International Monetary Fund (IMF), which recently flagged the accuracy and timeliness of Nigeria’s economic statistics. The Fund, early this month, highlighted deficiencies in data from the country’s fiscal, monetary, external, and financial sectors. It noted that Nigeria’s fragmented, outdated, and incomplete data infrastructure hinders effective policy monitoring, while delays and inconsistencies in key metrics complicate government planning.

One of the most troubling issues raised by the IMF is the “significant errors and omissions” in Nigeria’s balance of payments data, which make it difficult to assess the country’s true external position. These inaccuracies, the Fund warns, pose risks to financial stability and prevent sound macroeconomic management.

Following the rebasing of economic data methodology, the Tinubu administration has been rolling out a series of official data releases in recent weeks — including GDP, inflation, and unemployment statistics — amid growing skepticism over the credibility of those numbers. The National Bureau of Statistics (NBS) last week announced that Nigeria’s Gross Domestic Product (GDP) expanded by 3.3% in the second quarter of 2025.

However, some economists have noted that the numbers don’t align with the deteriorating welfare conditions on the ground.

Renowned economist and Financial Derivatives Company CEO, Bismarck Rewane, also warned against what he called “happy statistics and unhappy people.” In an interview with ChannelsTV last week, Rewane stressed that Nigeria must move beyond headline GDP growth and focus on real, inclusive progress that improves the lives of ordinary citizens.

“What we want to avoid are happy statistics and unhappy people,” he said. “You can grow as much as you want, you can do all. It must be about the welfare of the people. The people must feel it, must be happy about it. If not, you will have happy statistics and unhappy people.”

Rewane’s caution mirrors widespread concern that government officials are deploying numbers as propaganda tools rather than as a basis for addressing inflation, food insecurity, joblessness, and rising inequality.

Nigeria’s Position in Global Poverty

The World Bank’s Africa Pulse report, released in April 2025, underscored the severity of Nigeria’s poverty problem. The report revealed that Nigeria now accounts for 19% of sub-Saharan Africa’s extremely poor population, the highest share in the region. This means that more than one in every seven of the world’s poorest people now lives in Nigeria, putting into question the credibility of any rosy economic narrative.

This alarming trend persists despite the government’s claim of easing inflation. The NBS reported that Nigeria’s headline inflation slowed slightly to 22.22% in June 2025, down from 22.97% in May. But the data also revealed that prices rose faster month-on-month in June, 1.68%, compared to 1.53% in May, suggesting inflationary pressures remain entrenched.

Peter Obi has maintained a consistent focus on the disconnect between official numbers and real-world conditions. In April, he warned that Nigeria has more poor people than China, Indonesia, and Vietnam combined, a sobering indictment of decades of mismanagement.

This backdrop now raises a big question: whether the government will confront the mounting pressure to address the issue of inaccurate data and begin tackling the actual causes of economic distress, rather than manipulating the symptoms.