Tesla's next big venture might see the company buying its very own computer chip plant. This is one of two tactics the electric car giant is reportedly considering to stay ahead of the ongoing chip shortage.

For months now, various tech companies have struggled to get the computer chips they need to manufacture their products. This began for a couple of reasons, including supply constraints due to COVID-19 and rampant demand for all kinds of gadgets. This is why it's nearly impossible to buy a PS5 or Xbox Series X, GPUs for gaming PCs, etc. Companies have warned that the chip shortage could last well into 2022 or 2023, indicating that the struggle for available chips is far from over.

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Tesla is one of many companies affected by the shortage. According to a report from The Financial Times, Tesla is exploring a couple of different options to ensure the shortage doesn't completely upend business. The first option would see Tesla buying heaps of chips in advance of its current needs so that it has enough to fall back on for future shipments. According to the report, industry sources say that Tesla has been speaking with suppliers in Taiwan, South Korea, and the United States to supply it with these advanced orders of chips. If that doesn't work, Tesla may take things a step further and outright purchase a chip plant. It's said that these plans are still in very early stages of discussion, but if Tesla is really considering this, that would be one of the most drastic responses yet to the shortage.

What A Tesla Chip Plant Could Mean For The Tech World

The front of a gray Tesla Model S

It's difficult to say how likely it really is that Tesla would get to the point of actually buying its own plant, but assuming that does happen, it would likely result in a couple of things. From Tesla's perspective, that would give the company direct access to chips it needs to power its vehicles. Tesla wouldn't have to rely on other suppliers to get the chips that it needs, and from that end, it would be a good move for the company.

On the flip side, Tesla buying out a plant for its own use would likely have severe consequences for the rest of the market. If Tesla buys a plant and reserves its output exclusively for its own use, that leaves other companies with one less source of getting chips from. Tesla may be able to supply itself with chips at a more regular pace, but for other companies, it could make their chip shortages worse than they already are.

If Tesla does eventually decide to buy a chip plant, don't expect it to happen at any point in the near future. Not only would it require years of planning and strategy, but it's estimated the whole thing would cost Tesla as much as $20 billion. That's not to say a Tesla-owned plant will never happen, but as a solution for a problem that will (hopefully) be over in one or two years, it doesn't seem like a viable option.

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Source: The Financial Times