(Bloomberg/Sangmi Cha) — Samsung Electronics Co.’s surprise $16.5 billion chipmaking deal with Tesla Inc. has breathed new life into a foundry business all but written off by many investors.

Its stock has risen about 10% since news about the agreement on Monday, bringing Samsung’s gains in July to over 20% and putting the stock on track for its best month in over two decades. Samsung accounted for more than half of July’s gains in Korea’s stock benchmark Kospi, underscoring growing investor enthusiasm.

The Tesla deal is significant as it marks a shift for the ailing foundry business — from relying on captive internal orders to deeper external engagements, Citigroup analysts said in a report. A successful implementation would boost Samsung’s prospects for generating more external clients

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