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Tesla will take an unusual step in prepaying the chips to secure a supply of essential materials, and is also considering buying the plant in an effort to overcome the global shortage, according to people familiar with the matter.
The U.S. electric car maker is discussing proposals to secure chip supply with industry operators in Taiwan, South Korea and the U.S., said people working in semiconductor industry suppliers, chip manufacturers and consultants.
They said Tesla’s interest in buying a plant entirely was much earlier. Given the prohibitive costs that this would entail, they said such an acquisition would be difficult. Tesla needs the latest generation of mass-produced chips, mostly made in Taiwan and South Korea.
Tesla’s interest in securing direct financial commitment from automakers to telecommunications equipment manufacturers such as Cisco is looking for new ways to overcome global chip shortages.
The crisis has forced several motorists to abandon or close plants. It is projected that the industry will cost the industry 5% of its projected sales this year, according to the rating agency Fitch.
Some contract manufacturers have begun to allow large customers to pay pre-deposits to ensure certain orders at a fixed price. This practice was unusual for contract manufacturers – the ability to distribute the demands of different customers is the basis of their profitability.
Tesla showed a desire to branch out into the components when it announced it last year planak for its battery packs.
The company already has an engineering team of its own that designs high-end semiconductors used in autonomous driving.
“They will initially buy the capacity, but they are actively looking into buying their own foundry,” said Ambrose Conroy, founder and CEO of Tesla’s supply chain consulting firm Seraph Consulting.
But most observers believe the purchase and commissioning of the chip facility would be a very remote step for carmakers like Tesla.
“They see the factory price and go back and line up,” said Velu Sinha, a Shanghai Bain partner.
The state-of-the-art laboratory requires an investment of $ 20 billion and it is difficult to master the difficulties of operating such plants.
A senior Samsung executive who makes Tesla chips said hiring arrangements should be changed because customers are looking for more and more specialized and customized semiconductors.
Elon Musk, Tesla’s CEO, has been exploring more specialized components for his electric vehicles © AP
“Due to the current shortage of capacity, Samsung may be able to offer capacity to companies like Tesla, which use chips with a longer life cycle,” said CW analyst Chung Nomura.
Tesla did not answer questions on the subject. One person who thinks about Samsung on the subject said the company has offered some production lines to customers and is open to further discussion.
Other automakers have begun contracting directly with foundries. Motor groups will “have more direct contact with contract chip manufacturers,” said one person who advises a European carmaker not to re-accept the chip supply chain. “That means they have to invest in home specialization and it also means dedicated purchase agreements.”
The change goes beyond the motor industry. Cisco said it has deposited money to reserve capacity with an unidentified contract chip maker.
Last month, six semiconductor design houses were closed treatment With the United Microelectronics Corporation of Taiwan (UMC), through which the world’s fourth-largest contract manufacturer would expand its production capacity for adult technology in exchange for financial deposits.
Such arrangements deviate from the traditional business model. “When you block a particular capacity from a customer, that flexibility disappears,” said the semiconductor manager who is familiar with these operations.
For TSMC, the world’s largest contract chip maker with a gross margin of more than 50 percent, profitability is based on the ability to juggle capacity among many customers.
TSMC has long rejected requests to waive the ability offered to customers. He made an exception in 2014 to limit Qualcomm’s risk only after frequently changing U.S. chip design orders to work with Samsung.
A U.S. official said there is hope for more cooperation for automakers with smaller foundries like UMC or Taiwan’s Powerchip, as TSMC had “little interest in specific purchase agreements” with its massive bargaining power.
Additional news of Song Jung in Seoul
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