​​Do it like Tesla: how to fight the global chip shortage


COVID-19 has caused serious shortages in the chip supply chain, which have affected automakers as a result. According to the latest update from AlixPartners, a microchip shortage will cut auto industry revenues by $210 billion this year.

For many automakers, but not for Tesla.

While others are cutting supplies, Tesla is exceeding its own expectations. The company recently shared that it delivered 241,300 electric vehicles in the third quarter of 2021. This is 20,400 more than analysts predicted.

The question is, how? The average electric car contains about 2,000 microchips. That’s about double the number in a non-electric vehicle.

One of Tesla’s secrets is its own chip production.

That’s why many people say: “If you want something to be done well, you’ve got to do it yourself”. 

Back in 2016, the innovative electric vehicle giant set itself the task of producing its own chips. And instead of making chips entirely made of silicon — the preferred material for mass-producing semiconductors — Tesla used silicon carbide (SiC).

In 2021, in their promotional event, Tesla revealed more about a custom AI chip called D1 to train the machine learning algorithm at the heart of the Autopilot autonomous driving system. Using neural networks to identify objects on the road is not something new among automakers. But Tesla’s technology is based on a special single giant neural network called a transformer.

According to the company, each of the 1 million Tesla vehicles sends video files to the company from their eight cameras. Tesla labels these images to mark cars, trucks, road signs, markings, and other features. All this is necessary for the continuous training of the “transformer“.

Building a chip as powerful and complex as the D1 for training AI algorithms is expensive and difficult. It is estimated that this training requires several million dollars of computing power.

What are the conclusions:

There is definitely the possibility to improve energy efficiency and reduce our dependence on Asian chip makers by becoming a local chip maker or pursuing the local market. 

With ABC Assembly, you can go directly from prototype to serial production at no additional cost or time.

ABC Assembly has been working with companies to develop, test, and manufacture electronic microchips of the most complex designs. While other market participants are seeking ways to deal with the deficit problem, we are already expanding the capabilities of our partners.