New Delhi: Elon Musk-led Tesla is actively evaluating India as a semiconductor supply hub, holding talks with US-based Micron, Mumbai-headquartered CG Semi (a Murugappa Group company), and Tata Electronics. The move reflects Tesla’s broader effort to diversify its global supply chain amid rising geopolitical tensions and disruptions in legacy chip availability.
Supply Chain Diversification Gains Momentum
According to people familiar with the matter, Tesla recently met with representatives from three major semiconductor initiatives in India- Micron’s ATMP facility in Sanand, CG Semi’s OSAT unit, and Tata Electronics’ upcoming fabrication and packaging facilities. These meetings, held around six weeks ago, focused on understanding packaging timelines, production capacity, and operational readiness.
Micron’s Sanand plant is being developed for assembly, testing, marking, and packaging (ATMP), while CG Semi formed through a joint venture between CG Power, Japan’s Renesas, and Thailand’s Stars Microelectronics is building an outsourced semiconductor assembly and test (OSAT) unit in Gujarat. Renesas will act as an anchor customer for CG Semi, though the facility is expected to cater to global clients.
Tata Electronics, which has already secured a deal to supply chips to Tesla, is investing over Rs 91,000 crore in a semiconductor fab in Dholera and an OSAT unit in Assam.
India’s Growing Role in Legacy Semiconductor Manufacturing
Industry experts suggest Tesla’s engagement is part of a wider shift by global automakers to reduce dependency on Chinese chipmakers, especially for mature-node or legacy chips critical for EVs. Tesla’s Shanghai Gigafactory still relies heavily on Chinese fabs, but evolving trade restrictions and tariffs are prompting a rethink.
“Companies like Tesla are planning to shift sourcing as early as 2025,” said Ashwin Amberkar, an independent automotive analyst. “India is emerging as a credible alternative for legacy chip packaging and manufacturing.”
Micron’s plant is expected to focus on automotive-grade DRAM, while Tata’s facilities aim to support older-node chip demands crucial for vehicle control units. CG Semi’s Gujarat unit will contribute to global legacy chip supply through OSAT capabilities.
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