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As far as supply of parts relates to inflationary tendencies and in Intel's case that lack of Chip Making capacity is directly related to Intel's decision to pu
by Farfignoggen 5y ago
As far as supply of parts relates to inflationary tendencies and in Intel's case that lack of Chip Making capacity is directly related to Intel's decision to pursue Share Buybacks instead of investing in new Chip Fab Capacity and Chip Fab Process Node R&D. So the entire semiconductor Industry needs to be analyzed for Proper Investment in Chip Fabrication capacity relative to Share Buybacks and how that affected the current Chip Supply-Chain/Inflation rates. So in circa 2014 Intel Mothballed its Fab 42 Chip Fab at the Building Shell stage sans any of the equipment purchases which Intel deferred to pursue a share buyback strategy. So this corporate policy needs to be accounted for as a policy that has exacerbated the inflationary tendencies of many products' supply downstream of Intel/Other semiconductor suppliers.
Now the Pure Play Foundries(TSMC, GlobalFounderies, Others) need to be analyzed as well for any similar behavior but TSMC's in Taiwan and less beholden to a strict fiduciary requirement to Increase Shareholder value at the cost of all else(Investment towards the Future).
So these industries influence on the overall supply chain of consumer products is rather more leveraged now than it ever was in the past what with the supply of every new device, including Planes, Trains, and Automobiles, so dependent on the supply of Chips(Microprocessors and ancillary Devices). Look to the recent auto industry/other chip supply chain woes and that's more than just money supply related this new high inflation cycle where every product includes some form of microprocessor chip and related components like VRM(Voltage Regulator Modules) and other components without which any microprocessor will not be able to function.
The entire economy is rather more beholden to the chip supplies and chip production capacity issue and that of Corporate Policy in the US especially but also the rest of the world. I mentioned Intel because Intel still retains its own chip fabs while AMD has become like others a fabless semiconductor company. But AMD currently has just announced a second round of share buybacks and how will that affect AMD's investments in its future is yet to be seen. But this entire process of share buybacks at the cost of investments in the future needs to be examined and from a perspective of how that's helped exacerbate the current round of inflationary tendencies via the supply of a very vital product in the world's economy the Microprocessor/Ancillary components.