Tesla is set to get its next generation of semiconductor chips from South Korean electronics giant Samsung in a new deal worth more than $16 billion over the next eight years.

The stock of Tesla (TSLA) is up 4% on July 28 after the electric vehicle maker announced that it has entered into a $16.5 billion contract with Samsung Electronics (SSNLF) to supply it with semiconductors.

Samsung Electronics said a trade deal between South Korea and Washington will help to alleviate business uncertainty, as the technology giant forecast more major chip orders after signing a $16.5 billion deal with Elon Musk's Tesla .