Meta Pauses Multi-Billion Custom AI Chip Project with Samsung

Meta has requested a temporary suspension of its custom AI chip development project with Samsung Electronics' System LSI division, according to reports from Korean media, dealing a significant blow to the semiconductor giant's ambitions to expand its foundry customer base for AI workloads.

A Deal Worth Tens of Trillions of Won

The project had been underway since 2024 and was progressing through advanced development. Had it reached mass production, the long-term contract was reportedly expected to be worth tens of trillions of Korean won. Samsung stood to benefit twice over — from the chip design work through its System LSI division and from subsequent manufacturing in its foundry business. Meta has reportedly described the situation as a "temporary hold" rather than a cancellation, but neither company has publicly commented on the reasons, and it remains unclear when or if the project will resume.

Broadcom and TSMC Loom Large

The suspension follows Meta's announcement in April of a major expanded partnership with Broadcom to co-develop multiple generations of its next-generation MTIA (Meta Training and Inference Accelerator) chips through 2029, including an initial commitment exceeding one gigawatt of computing capacity. Meta disclosed in March that it is developing four new MTIA generations — the 300, 400, 450, and 500 — through 2027, all manufactured by TSMC. The chips power inference and recommendation workloads across Facebook and Instagram, with newer generations targeting generative AI tasks.

Meta's relationship with Samsung dates back to 2024, when Mark Zuckerberg met with Samsung leadership to discuss semiconductor cooperation, partly motivated by a desire to reduce reliance on TSMC amid geopolitical uncertainty. The deepening Broadcom relationship appears to have shifted that calculus.

Mounting Pressure on Samsung's Foundry

The pause comes at a difficult moment for Samsung's contract chipmaking business, which has struggled to compete with TSMC for advanced AI chip contracts. Earlier this year, Samsung's new foundry chief pledged to improve yields on its 2-nanometre process and win more AI clients. The Meta setback also follows reports just days earlier that Samsung's custom AI chip collaboration with OpenAI had been paused as well.

The irony is that Samsung is otherwise thriving: record memory chip demand drove an estimated 57.2 trillion won in operating profit in the first quarter of 2026. But its foundry division continues to lag TSMC, whose CEO C.C. Wei said this week that chip supply will fall short of AI-fuelled demand for years to come.