Elon Musk to the rescue? Tesla’s boss handed Samsung Electronics a contract worth $16.5bn over eight years to produce the electric-car maker’s next generation of custom artificial intelligence chips, the biggest deal ever secured by the South Korean group from a single customer.

Samsung could use the break. It has roundly disappointed on a couple of quarterly earnings, recalling the dismal “Sony shokkus” of earlier this century. It fell behind in high bandwidth memory, used to improve efficiency in AI workloads by Nvidia and its ilk, ceding ground to local rival SK Hynix. Its foundry chipmaking business is barely in the rear-view mirror of its bigger Taiwanese rival: TSMC’s 67.6 per cent market share dwarfs Samsung’s 7.7 per cent on TrendForce numbers. 

Chip plants depend on a virtuous cycle: the more the customers, the better the yields, the bigger the profit bounty, the greater the reinvestment — and so on. So far, Samsung’s foundry business is on the reverse ride.