Samsung Electronics says a new trade deal between South Korea and the U.S. will ease business uncertainty and open the door for more chip orders, following a $16.5 billion agreement to supply semiconductors to Tesla.

The United States will impose a 15% tariff on South Korean imports—down from a proposed 25%—in a deal announced by President Donald Trump that aims to reduce tensions with a key Asian ally.

The chip supply deal with Tesla is seen as a potential lifeline for Samsung’s struggling contract chipmaking business. “We anticipate securing additional orders from large customers,” said Samsung Vice President Noh Mi-jung.

Samsung’s new semiconductor plant in Texas, expected to produce chips for Tesla, remains on track to begin operations in 2026. The move is part of Chairman Jay Y. Lee’s broader push to challenge Taiwan’s TSMC in advanced contract chip manufacturing.

Despite the Tesla win, Samsung’s chip division reported a 94% year-on-year drop in Q2 profit, hurt by delays in delivering AI chips to Nvidia and export curbs affecting sales to China. Overall operating profit fell to 4.7 trillion won ($3.37 billion), its weakest in six quarters.

The company said AI demand would drive a market recovery in the second half, supported by continued investment from cloud giants like Meta and Microsoft. However, Samsung warned of persistent risks from global trade uncertainty and geopolitical tensions.

Samsung also confirmed it has provided samples of next-gen HBM4 memory chips to clients, with mass production set for next year. Still, concerns remain over lagging performance behind competitors like SK Hynix in the AI chip race.

Shares of Samsung fell 1.8% following the earnings report, underperforming the broader KOSPI index.