02:03 PM EDT, 07/28/2025 (MT Newswires) -- Tesla's (TSLA) semiconductor supply contract with Samsung likely doesn't bode well for Taiwan Semiconductor Manufacturing ( TSM ) and US chipmaker Intel ( INTC ) , Wedbush Securities said in a Monday note.

South Korea's Samsung said Monday that it will supply chips to the electric vehicle manufacturer in a deal worth 22.765 trillion won ($16.39 billion). Samsung didn't disclose the counterparty, but said the contract would run through 2033.

Tesla Chief Executive Elon Musk confirmed the deal in a reply to a post on his X social media platform.

"Samsung's giant new Texas fab will be dedicated to making Tesla's next-generation AI6 chip," Musk said on X. "The strategic importance of this is hard to overstate."

Samsung currently produces AI4, he said. Taiwan Semiconductor Manufacturing ( TSM ) "will make AI5, which just finished design, initially in Taiwan and then Arizona," Musk added.

While the news is positive for Samsung, the deal could have negative implications for Taiwan Semiconductor and Intel ( INTC ), Wedbush analysts Matt Bryson and Antoine Legault said in a Monday client note.

TSM could face competition from Samsung in the 2-nanometer chip space, Bryson and Legault suggested. They also questioned why Tesla didn't turn to Intel ( INTC ) as a TSM alternative.

Last week, Intel ( INTC ) swung to a loss in the second quarter, while the chipmaker said it plans to slash its workforce by 15% by the end of this year.

Tesla shares were up 3.9% intraday, while Intel ( INTC ) was up 0.4%. Taiwan Semiconductor Manufacturing's ( TSM ) New York Stock Exchange-listed shares fell 1.1%.

"Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency," Musk said in another post. "This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house."

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