The company is flirting with Indian semiconductor firms to diversify its global supply chain and get away from Chinese suppliers. Home to the EV giant, the company has sparked talks with U.S. memory chipmaker Micron and Mumbai-based CG Semi, a Murugappa Group subsidiary, to see whether to allow for procurement of semiconductor parts. This comes after Tesla signed last year a strategic partnership with Tata Electronics to source chips for the company’s operations globally.
Tesla called in meetings a month and a half ago with envoys from India’s three biggest semiconductor commands, Micron, CG Semi and Tata Electronics, according to sources familiar with the matter. The discussions were to determine which type of chips the companies have in mind to package and their production ramp up and operational timelines.
In Gujarat, Micron’s facility will have assembly and test manufacturing capabilities, which will be used for both domestic and international purpose. Also, CG Semi is setting up an outsourcing semiconductor assembly and test (OSAT) facility in Sanand, Gujarat. CG Power, Renesas and Stars Microelectronics are expected to have Renesas as an anchor customer but the joint venture is expected to provide its services to a global clientele.
Investments are being made by Tata Electronics to make India’s semiconductor infrastructure stronger. In addition to investing over ₹91,000 crore to set up a semiconductor fabrication facility in Dholera, Gujarat and an amount of ₹27,000 crore for a OSAT facility in Morigaon, Assam, the company is segregating an additional ₹8,000 crore as capital expenditure for procurement of land and assets.
Industry experts say global corporations are becoming more concerned with how they can spread risk by getting away from entering into contracts with suppliers in one country. The engagement by Tesla with Indian suppliers is a strategic try to break away from reliance of Chinese and Taiwanese sources. Independent automotive analyst Ashwin Amberkar pointed out that Tesla is aiming at suppliers beyond China and Taiwan, and its targets reach as early as 2025.
