Tesla Explores Semiconductor Sourcing from India’s Micron and CG Semi to Diversify Beyond China
Elon Musk eyes India’s emerging chip ecosystem as part of global EV supply chain strategy
In a strategic move to diversify its supply chain and reduce dependence on China, Tesla is reportedly exploring semiconductor sourcing options from India-based CG Semi (Murugappa Group) and the US chipmaker Micron, both of which are expanding their operations in India. The electric vehicle (EV) giant is looking to tap into India’s emerging semiconductor manufacturing ecosystem, aligning with its global strategy to build a resilient and geographically diverse supply network.
According to sources cited by The Economic Times, Tesla recently held discussions with representatives from the three major semiconductor facilities gaining traction in India — Micron Technology, CG Semi, and Tata Electronics. These talks mark a significant development in India’s positioning as a potential semiconductor hub and indicate Tesla’s intent to include Indian companies in its future EV component procurement plans.
This move comes amid broader global efforts by leading technology and automotive firms to de-risk their supply chains from geopolitical tensions and logistical bottlenecks often associated with China. By considering suppliers in India, Tesla joins a growing list of multinational companies that are reevaluating their global sourcing strategies in light of recent disruptions.
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Tesla’s interest in India also aligns with recent high-level engagements. Just last week, Prime Minister Narendra Modi held discussions with Tesla CEO Elon Musk, focusing on collaboration in technology, innovation, and sustainable energy. During the talks, the possibility of expanding Tesla’s footprint in India — including manufacturing and R&D — was discussed. Musk has also confirmed plans to visit India later this year, a move that could further accelerate Tesla’s plans in the region.
India has been making significant strides in building a domestic semiconductor ecosystem, offering policy incentives and infrastructure support to attract global chipmakers. Micron has already committed to setting up a major chip packaging and testing unit in Gujarat, while CG Semi is part of the Murugappa Group’s broader initiative to develop advanced semiconductor capabilities within India. Meanwhile, Tata Electronics has also entered the semiconductor space, backed by substantial investments and government support.
Tesla’s interest in CG Semi and Micron India demonstrates the growing confidence in India’s semiconductor potential. For Tesla, sourcing chips from India not only offers cost and supply chain advantages but also strengthens its position in the Indian market, where it is expected to introduce its vehicles in the near future.
As the global EV market becomes increasingly competitive, chip availability and supply chain resilience will be key to scaling operations efficiently. Partnering with Indian semiconductor players allows Tesla to mitigate risk, secure essential components, and potentially benefit from India’s favorable manufacturing policies.
With India’s semiconductor ambitions gaining momentum and Tesla actively engaging with local industry leaders, this development marks a critical step toward integrating India into the global high-tech supply chain — a win-win for both Tesla and India’s growing chip sector.
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