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Tesla ends production worries despite microchip shortage

The American car maker did close its Fermont factory, albeit briefly, as a result of a global chip crisis

By Tom Gibson
May 04, 2021
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There’s great fear among leading tech companies that the current Covid-19 pandemic will lead to a global shortage of microchips.

There has been a huge increase in demand for many electronics and computers since lockdowns took a strangle hold around the world, and this, coupled with a horrendous drought in Taiwan which is one of the major manufacturers of microchips, has created serious problems for the supply chain.

But Tesla has hoped to calm fears of its shareholders that this will ultimately impact production by writing to them in a letter. 

“In Q1, we were able to navigate through global chip supply shortage issues in part by pivoting extremely quickly to new microcontrollers, while simultaneously developing firmware for new chips made by new suppliers.”

Tesla ends production worries despite microchip shortage Image

This follows on from comments Tesla’s CEO, Elon Musk, made when announcing its financial results for Q1. 

“This quarter, and I think we’ll continue to see that a little bit in Q2 and Q3, had some of the most difficult supply chain challenges that we’ve ever experienced in the life of Tesla and same difficulties with supply chain, with parts — over the whole range of parts. Obviously, people have heard about the chip shortage.”

Tesla uses several chips for different control systems and its infotainment system and, most famously, uses a chip that it designed itself for its self-driving software that is produced by Samsung.

So it seems Tesla will likely get out of this mini-crisis relatively unscathed, after only closing its Fremont factory for a few days in the last quarter, which is not as bad as the production halts that some other car makers are reporting.

 

By Tom Gibson
May 04, 2021
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