Tesla just created a Chinese joint venture with Swiss Automotive Chip accessory company; EV Giant is also set to become one of TSMC’s largest customers

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Tesla is finally revolutionizing the self-driving world by unlocking the full self-driving (FSD) capability of its Autopilot system. Everyone in North America. However, with the move comes a greedy demand for chips, a demand that Tesla is now trying to meet not only by taking advantage of TSMC but also by creating a chip-focused joint venture (JV) in China.

Chinese publication IJiWei reported a few days ago that Tesla had set up a JV with the Swiss auto semiconductor company, Annex. The joint venture boasts a registered capital of $150 million, with Annex holding a 55 percent stake, followed by the Jinan Zurich Equity Investment Fund Partnership Annex 40 percent, and the remaining 5 percent stake held by Tesla. Keep in mind that the Jinan Zurich Fund acquired Annex back in June 2022 for $5 billion.

Meanwhile, Tesla has reportedly placed a huge chip order with TSMC. The demand is reportedly so great that it will make Tesla one of TSMC’s top 7 customers next year. The chips will be manufactured on TSMC’s 4/5 nm contract.

As a refresher, Samsung was responsible for manufacturing the Tesla FSD 3.0 chips on the 14nm architecture. However, Tesla now appears to be veering away from Samsung and toward TSMC, DigiTimes reports.

Meanwhile, Tesla is expected to recognize about $1 billion in FSD-related deferred revenue in the fourth quarter of 2022, according to scheduler Gary Black, managing partner at Future Fund:

“We estimate that TSLA has sold 400,000 FSD packages averaging $9K since FSD became available. Assuming 300K sold in the US and 40% unamortized review rate, this translates to $1.1 billion in potential review rate issue” .

For starters, Tesla introduced the vision-based iteration of its Autopilot with a lot of fanfare again. The rationale here is that with eight high-resolution cameras and a high-tech neural network to interpret visual cues, the autopilot will mimic the way humans make decisions on the road.

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Last year, Tesla unveiled its 7nm-based D1 chip to power its internal Dojo supercomputer, which the company uses to train its autopilot neural network by feeding it visual clips captured by the millions of electric cars already on the road. The EV company revealed a lot of details about the Dojo supercomputer at its recent Chips 34 event. Tesla plans to build the first Dojo exapod in 2023. In total, the company plans to build 7 such exapods to speed up the training of its autopilot neural network.

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