Tesla’s Plan to Minimize Silicio Carbide Use Makes Some Chipmakers’ Shares Down
Written by Reananda Hidayat PermonoCompleted Master of Science - MS, Petroleum Geology from Curtin University, Perth, Australia.
Colin Campbell, Tesla’s powertrain engineering leader, shared the company's plans to reduce operational costs during Tesla 2023 Investor Day.
Tesla found a way to use 75% less of the silicon carbide transistors without compromising the car's performance.
It’s important for Tesla since the silicon carbide transistors are key components but expensive.
Therefore, shares in some chipmakers declined on Thursday after the Tesla Investor Day.
Shares of ST Microelectronics and ON Semiconductor lost about 2%; Wolfspeed dropped about 7%.
It happened because investors worried that Elon Musk’s moves would be a precursor for the automotive industry.
Besides, Campbell explained that Tesla’s new powertrains would use motors without rare earth metals.
Hence, in response, MP Materials, the provider of neodymium for Tesla, shares dropped around 11%.
However, Campbell didn’t say when Tesla’s next-generation powertrain would be ready for mass production.
He also didn’t specify how much Tesla spends on these silicon carbide transistors.
Chips of silicon carbide transistors are commonly used in electric vehicles, though.
According to the Institute of Electrical and Electronic Engineers, these transistors withstand more heat and have a longer life.
Later, Bank of America analysts said Tesla’s claims are “notable but premature.”
There is a possibility that the cheaper chips could drive up electric vehicle adoption globally.