How to respond to Tesla’s semiconductor shortage?

Use alternative chips and maintain a high level of production

🟩 Changed software to adopt alternatives

Tesla commented on its response to the semiconductor shortage in its Q2 2021 financial results.

“Our electrical and firmware engineering teams continue to work hard to design, develop and validate 19 new variants of controllers to address the ongoing semiconductor shortage.”

Alternative chips To use it, you don’t just have to replace the chip, you need to rewrite the software. It looks like Tesla has been making firmware changes over the course of weeks.

🟩 Semiconductors determine Tesla’s growth rate

CEO Elon Musk said Tesla’s future growth depends on a quick solution to the global semiconductor shortage.

“For the remainder of the year, our growth rate will be determined by the slowest part of the supply chain.”

The global chip shortage situation is still very serious, but the adoption of alternatives may keep production as close to full capacity as possible.

🟩 Serious with airbag and seat belt control

Tesla’s electric vehicles use semiconductor chips in various modules. Semiconductor shortages, especially in airbags and modules that control vehicle seat belts, have severely limited production at the Shanghai and Fremont plants. These are essential components for vehicle safety features, and you can’t ship a car without them.

Tesla emphasizes that a vehicle cannot be made if one of the approximately 10,000 parts is missing, and that the slowest parts determine the productivity of the vehicle. So why make a chip fab? The answer is that it is not realistic because it takes 12~18 months to move like lightning.


Tesla’s response to semiconductor shortage is to change software and adopt alternative chips

Software changes are not easy to do because they require design and verification by engineers. But to maintain a high growth rate, Tesla will do whatever it takes. Eventually, it will give you the flexibility to choose alternatives, which will make Tesla stronger.

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