Tesla Explores New Semiconductor Suppliers in India

Tesla is currently engaged in discussions with Micron, a US-based memory chipmaker, and CG Semi from India, as the company reviews potential global semiconductor partners, as reported by ET. These conversations follow Tesla’s earlier agreement with Tata Electronics concerning chip procurement, highlighting the electric vehicle manufacturer’s increasing interest in India’s expanding semiconductor sector.

Details on the Discussions

A source informed ET that Tesla representatives met with officials from three major semiconductor manufacturers establishing operations in India: Micron, CG Semi, and Tata Electronics. Approximately six weeks ago, meetings were held to gain insight into the types of chips to be developed, production timelines, and overall readiness.

Facility Focuses on Automotive-Grade Chips

Micron’s forthcoming facility in Sanand, Gujarat, is designed for the assembly and testing of automotive-grade chips. In addition, CG Semi is operating an outsourced semiconductor assembly and test (OSAT) unit in collaboration with Renesas and Stars Microelectronics, which is anticipated to cater to a global market beyond its primary client, Renesas.

Strategic Timing for Tesla

This outreach is happening during a pivotal time. Elon Musk, CEO of Tesla, recently expressed excitement on X about his upcoming visit to India this year, coinciding with ongoing trade discussions between India and the US, as a high-level Indian delegation plans to be in Washington next week.

Challenges to Tesla’s India Ambitions

Tesla’s ambitions within India have encountered obstacles in the past. Musk had been expected to travel to India in 2023, but that journey was delayed due to unresolved market entry decisions and discussions surrounding local manufacturing and import duties. Concurrently, Starlink, another venture led by Musk, faced regulatory challenges in India regarding licensing and user registrations, leading to a temporary halt in operations until local approvals were obtained.

Significance of the Focused Chip Production

The upcoming facilities of Micron in Gujarat, CG Semi’s OSAT unit, and Tata’s new fabs and packaging locations are all concentrating on legacy-node chips. This category continues to play a substantial role in electric vehicle components, especially for battery management systems, safety electronic control units (ECUs), and infotainment systems. These components usually rely on manufacturing nodes within the 28-65nm range, a sector where India might significantly contribute.