Samsung Electronics Co. Ltd. SSNLF shares declined 2.54% on Tuesday morning on the South Korean exchange following Tesla Inc.‘s TSLA confirmation of a $16.5 billion chip manufacturing partnership. Shares dropped from 70,800 won to 69,000 won before recovering to 70,400 won ($50.62).

Tesla CEO Elon Musk confirmed on Monday that his company will manufacture next-generation AI6 chips at Samsung’s Texas facility through December 2033.

Tech analyst Ming-Chi Kuo called the deal a “valuable opportunity” for Tesla to gain foundry experience, Taiwan Semiconductor Manufacturing Co. Ltd. TSM “would never allow.” Samsung holds 8% of the global foundry market versus TSMC’s 67%.

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