Tesla looks to American, Indian chipmakers to diversify supply chain

According to a report, Tesla is in talks with US memory chip manufacturer Micron and CG Semi, a Murugappa Group company located in Mumbai, to investigate possible chip sourcing alternatives. The discussions are a component of the electric vehicle (EV) leader’s wider plan to diversify its international semiconductor supply chain.

These engagements are in line with its previous agreement with Tata Electronics to obtain chips for its global operations, which was announced in 2023.

The report states that Tesla has connected with prominent companies managing semiconductor plants in India, such as the recently launched sites by Micron, CG Semi, and Tata Electronics. The discussions allegedly centered on chip packaging capabilities, manufacturing timelines, and anticipated scaling schedules.

Micron’s facility in Gujarat is set to cater to both local and international markets by means of assembly and testing production. In the meantime, CG Semi, a collaboration among CG Power, Renesas Electronics, and Stars Microelectronics, is establishing an outsourced semiconductor assembly and test (OSAT) facility that will initially serve Renesas but is projected to support additional global customers too.

These discussions indicate Tesla’s increasing focus on India as a key ally in its supply chain network, particularly as geopolitical changes urge businesses to mitigate risks by moving operations from China.

On Saturday, Tesla’s CEO Elon Musk affirmed intentions to travel to India this year, soon after a conversation with Prime Minister Narendra Modi. Their engagement comes after earlier face-to-face meetings, including one in Washington DC earlier this year. Tesla previously expressed interest in establishing a manufacturing facility in India, but recent reports suggest that local production might still be a far-off possibility.