Anthony J. Pennings, PhD

WRITINGS ON AI POLICY, DIGITAL ECONOMICS, ENERGY STRATEGIES, AND GLOBAL E-COMMERCE

Taylor’s Fab Rescue: The A16 Chip

Posted on | November 2, 2025 | No Comments

My home in Austin, Texas, is about 25 miles from the newly built Samsung microprocessor fabrication “fab” factory. The fab has been running behind schedule since it switched its plans from 4-nanometer chips to 2-nanometer chips. But Tesla recently signed a deal with Samsung to build its A16 (and maybe A18) chips in Texas for future use in its data center, EVs, and robots.

While the Taylor location has many advantages, the demands of producing such small devices are numerous. While very few earthquakes occur in Texas, 2nm chip production operates at atomic levels that cannot tolerate vibrations from trains, traffic, or settling of the earth below and near the fab. Unlike the new TSMC fab in Phoenix, Arizona, Samsung had to invent many solutions to problems with electricity supply, ultra-clean water and air, and a workforce not used to 2nm production.

These problems and Samsung’s heroic attempts to overcome them are discussed nicely in this video, including a crucial factor for the fab’s success—a customer to point its development towards. This is why Tesla’s decision to work with Samsung on its A16 chip was a welcome relief for both parties. Samsung locks in a much-needed customer while Tesla avoids competing with Apple, NVIDIA, and a myriad of other companies for TSMC’s chips.

This video explains the situation in more detail.

What will Tesla do with these chips? The internally designed chips will be used for both inference and training in a variety of products, including self-driving systems for its EVs, the Optimus humanoid robot, and AI data centers.

Citation APA (7th Edition)

Pennings, A.J. (2025, Nov 02) Taylor’s Fab Rescue: The A16 Chip. apennings.com https://apennings.com/digital-geography/taylors-fab-rescue-the-a16-chip/

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Not to be considered financial advice.


AnthonybwAnthony J. Pennings, PhD is a Professor at the Department of Technology and Society, State University of New York, Korea and a Research Professor for Stony Brook University. He teaches AI and broadband policy. From 2002-2012 he taught digital economics and information systems management at New York University. He also taught in the Digital Media MBA at St. Edwards University in Austin, Texas, where he lives when not in Korea.

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  • About Me

    Professor (full) at State University of New York (SUNY) Korea since 2016. Research Professor for Stony Brook University. Moved to Austin, Texas in August 2012 to join the Digital Media Management program at St. Edwards University. Spent the previous decade on the faculty at New York University teaching and researching information systems, digital economics, and global political economy

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