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Intel spent tens of billions on stock buybacks and now they're getting subsidies to build fabs. Why does the middle class taxpayer have to bail everyone out, w
by waterlaw 4y ago
Intel spent tens of billions on stock buybacks and now they're getting subsidies to build fabs.
Why does the middle class taxpayer have to bail everyone out, with lower living standards due to taxation and inflation.
- jakobov 4y agoIt's about national security. A fab is necessary for national security
- alaricus 4y agoSubsidizing an American company is not necessary for Germany's security. In fact, it undermines it.
- julianozen 4y agoI mean in theory but not in practice
- ikinsey 4y agoWould you mind explaining why you think this is the case?
- PKop 4y agoThey are dependent on and subservient to the US and its geopolitical interests. We see this right now with Germany self-sabotaging it's own economy and industrial power by cutting off cheap Russian energy at the direction of US policy interests (Nord Stream 2 was agreed upon for years between Russia and Germany but thwarted at every turn, sanctioned etc by US).
- WoahNoun 4y agoIt was also hated by other EU countries: >President of the European Council Donald Tusk said that Nord Stream 2 is not in the EU's interests.[19] Italian Prime Minister Matteo Renzi and Hungarian Prime Minister Viktor Orbán have questioned the different treatment of Nord Stream 2 and South Stream projects.[19][20] Some claim that the project violates the long-term declared strategy of the EU to diversify its gas supplies.[21] A letter, signed by the leaders of nine EU countries, was sent to the EC in March 2016, warning that the Nord Stream 2 project contradicts the European energy policy requirements that suppliers to the EU should not control the energy transmission assets, and that access to the energy infrastructure must be secured for non-consortium companies.[22][23] https://en.wikipedia.org/wiki/Nord_Stream_2 https://en.wikipedia.org/wiki/Nord_Stream_2
- PKop 4y agoDiversify the gas and oil supplies after you lock in a consistent steady supply, not before lol. Now European industrial capacity will crater. They need energy to fuel their economy. No nation ever became strong or a world power by consuming less energy, or paying more than their peers. And, just because they want to diversify, doesn't mean the present geological and economic reality allows for it. Utopian policy in place of realpolitik is foolish. Same with ESG and insane green anti hydrocarbon, anti-nuclear policies.
- alaricus 4y agoNord Stream 2 was opposed by Americans who want to sell overpriced LNG to Europe. It was also opposed by Eastern Europeaners such as Tusk who (understandibly) dislike Russia.
- TulliusCicero 4y agoAh yes, the US interest of not funding Russia's invasion of Ukraine. Heaven forbid any Europeans have any interest themselves in not helping a warmonger. Obviously they can only do this at the behesr of Uncle Sam.
- PKop 4y agoIt is only my claim that their interests are not completely aligned. US is much more energy independent and gepolitically secure across the ocean from whatever happens on the "world-island" [0]. Whereas Europe might directly suffer from instability and chaos, as well as loss of Russian energy supplies, the US would not and in relative terms becomes stronger if Europe is severed from Russian energy, and the continent is in conflict and chaos. Europe having tight relations with Russia, economically especially energy-wise, is greatly beneficial to Europe and detrimental to US hegemony. [0] https://en.wikipedia.org/wiki/The_Geographical_Pivot_of_History https://en.wikipedia.org/wiki/The_Geographical_Pivot_of_Hist...
- TulliusCicero 4y ago> Europe having tight relations with Russia, economically especially energy-wise, is greatly beneficial to Europe You're once again excluding any calculations of Russia using the money to run around overthrowing democracies. "It's greatly beneficial if you ignore all the mass murder." The whole reason why they're now cancelling NS2 is because of this. Germany likes cheap energy, sure, but they're less than enthused about the money paying for that cheap energy going into executing and raping civilians in Ukraine.
- alaricus 4y agoThe world doesn't revolve around "America vs Russia". There are lots of other things going on. And if you are looking for a mass murderer, is there a bigger mass murderer than USA after 20 years of mass murder in the Middle East?
- systemvoltage 4y ago
- rat87 4y agoIt wasn't thwarted at every turn. Maybe we should have but we didn't, at least not at every turn. We did warn then it was a bad idea. Other countries especially countries in Eastern EU warned them it was a bad idea. And lo and behold trying to bring peace through trade didn't work with Russia. Unless Germany wants to exit the EU like the UK it does have to take the interests of other EU countries into account, many of them are much more anti Russia then America for obvious reasons. And even if Germany were to leave, not sanctioning Russia now would still be bad even if only considering German interests
- PKop 4y agoUS sanctioned Swiss and Russian suppliers constructing the pipeline, and debated in Congress and Whitehouse various policies to ban it's activation. >it was a bad idea It isn't a bad idea. It's a very good idea for Europe. Cheap plentiful energy supply from your neighbor and expanded economic relations would be a very good thing for making Europe economy strong. Sanctioning Russia is hurting Europe severely. They have massive gas and oil needs supplied by Europe. The sanctions hurt German industry and this energy cannot be replaced by other sources anywhere near similar prices or volumes
- lrem 4y agoIt was a very bad idea. "We don't need nuclear power, we have Russian gas" is pretty hard to defend as an idea, really. Especially after Russia went pretty overt in its ambitions to re-establish the empire. And the invasion of Georgia was years before construction of Nord Stream 1 started and Nord Stream 2 went into planning. The annexation of Crimea years before the construction of Nord Stream 2 started.
- alaricus 4y agoFun fact: the rabidly anti-Nuclear part of German politics is the Green party. Who are also the most pro-American and pro-War faction these days. It makes 0 sense.
- 4y ago
- alaricus 4y agoAmerica is not part of Europe. No reason to spend European money supporting American companies.
- parkingrift 4y agoEuropean money for European manufacturing staffed exclusively with Europeans and making chips for European products used by Europeans in Europe. The question OP asked is why it matters to you that the company that owns the fab is not European? The local investment is what should matter, no?
- alaricus 4y agoLocal investment is good. Subsidies to American companies is not.
- Sakos 4y agoIdeally, the EU would be trying to build its own semiconductor industry. I don't see that kind of foresight in any of our political leaders, much less mine in Germany. So the next best thing is to ensure that the current company we're reliant on builds local production.
- mike_hearn 4y agoNote that the act of giving subsidies to foreign companies automatically kills any case for investing in a truly local chip company, because you can't easily compete against that.
- justapassenger 4y agoCompeting with Intel is out of the question for any local chip company. But semiconductors is much much much more than high end CPUs. There’s totally a huge opportunity for local chip companies to grow. And having company like Intel may help, as people who work there will get a lot of know how that they can take to smaller local companies to help them grow.
- alaricus 4y ago> Competing with Intel is out of the question for any local chip company. Why? Intell lost the mobile, and is currently losing desktop/server. RISC-V is more promising each passing day. If India can do this, why can't Europe: https://news.ycombinator.com/item?id=31243674 https://news.ycombinator.com/item?id=31243674
- wwtrv 4y ago> If India can do this Can do what exactly? AFAIK they haven't actually built anything yet. It's going to be years until they have anything competitive with current gen CPUs. And even if they build something useful there is no guarantee it won't end up like Russian Elbrus (way to expensive and 10 years behind Intel/ARM). Intel never really had the mobile market and was seemingly never particularly interested in it. They are currently heavily pressured by AMD and ARM based cpus both in the consumer and server markets.
- qiskit 4y ago
- aliswe 4y agowow, first time on HN ive seen both arguments and counterarguments this ridiculous. but wait, what am i saying, they are claims devoid of proof, references or even arguments.
- anon2020dot00 4y agoHN is turning more like Twitch chat, I feel like. People just throw-out the most ridiculous opinions without any effort. At least Twitch chat has more fun memes.
- qiskit 4y agoWe invaded germany in 1940s and we've been occupying it ever since. You know like how the soviet union invaded germany in the 1940s. But then they eventually left. We didn't. We are still there. Hopefully germany will become a free nation one day. We talk so much freedom and sovereignty and yet we deprive so many of freedom and sovereignty. > they are claims devoid of proof, references or even arguments. It's basic history. Do you need references for ww2 and the occupation of germany? You are only responding like this because it's the obvious truth which you don't want to confront. Imagine if china or russia was occupying germany and forced them to subsidize chinese or russian companies.
- l33t2328 4y agoWe aren’t remaining there by force. Germany wants our base there.
- hnusersarelame 4y ago
- ezsmi 4y ago
- 42e6e8c8-f7b8-4 4y agoThere will be a huge knowledge transfer into Germany during this process. Fab's are fabulously intricate and difficult to run. $5.5 billion to teach your populace how to make chips? Worth it.
- phkahler 4y ago>> $5.5 billion to teach your populace how to make chips? Worth it. Germany already has advance chip fabrication - see Global Foundries (formerly AMD fab). It's not EUV, but even Intel still needs to figure out how to make those chips.
- alaricus 4y agoCompanies like Intel don't transfer knowledge. In fact, they often suck local talent out.
- 42e6e8c8-f7b8-4 4y agoNope. Source: multiple friends who work in Intel fabs. These fabs aren't turnkey.
- solarkraft 4y agoThe fab is still here. Ownership can change in the worst case. It would be nice to have a leading EU-owned chip maker, but we just don't have that yet. For the short term and the worst of cases, just having the thing matters a lot more than the profits staying here.
- alaricus 4y agoThat fab won't make any sense without Intel's suppy chain.
- Panoramix 4y agoThat's a silly and naive take. This investment will tremendously boost the semiconductor ecosystem in Germany. In the long run, this will do wonders when German companies want to or have to expand their capabilities, find more employees, design, package or assemble chips, buy wafers, equipment, supply chain, you name it. It's about building an ecosystem, much like SV. People on HN of all places should know this.
- bpodgursky 4y agoI mean, the fab is physically in Germany. That's what matters for national security. As an American, would I (hypothetically) rather have a Germany company building F-35s in the US than an American defense contractor building F-35s in Indonesia? I think the answer is obviously "yes".
- dataangel 4y agoThe fab is in Germany. In a scenario where the US and Germany are at odds Germany is the one with a fab. I doubt it weakens Germany's position unless they sacrificed funding some German chip maker, but I don't think they have anything near as huge as Intel.
- Paradigma11 4y agoThe factory is located on german soil, so if push comes to shove it is a german factory.
- qiskit 4y ago> It's about national security. A fab is necessary for national security How does germany funding a foreign/non-german company's fab part of national security? What about expelling a foreign occupying force? If the germans cared about national security, shouldn't they be looking in that first? If germany was funding a german company's fab, it would be national security. What germany is doing is paying tribute to a dominating foreign empire. No different than india sending their goods to britain during the colonial period.
- dqpb 4y agoThe US and Germany are allies. In fact, I believe “German” is the largest ancestry group in the US. Besides which, it’s extremely common for entities to invest in mutually beneficial agreements with other entities.
- colordrops 4y agoThis idea that policy should be set based on a grossly oversimplified wrapping up of a huge surface area of agreements into the term "ally" and vague notions of ethnic similarity needs to die. It gives the ruling class a mechanism to excuse war crimes of our supposed "allies" and drop bombs on supposed "enemies" for perceived minor infractions.
- dqpb 4y agoI agree, and this is not an argument I would normally make. But I think it’s the quality of response the parent deserved, given their ridiculously hyperbolic framing of “a foreign occupying force”.
- qiskit 4y ago> The US and Germany are allies. An ally doesn't firebomb a nation, murder thousands of innocent people and forcibly occupy it. Germany is a vassal. > In fact, I believe “German” is the largest ancestry group in the US. Who cares? We are not a german nation. We are an anglo nation. Germans don't have much political power in the US. If they did, we would have been allied with germany during ww2.
- Pxtl 4y agoKeeping their nuclear plants running is also necessary for national security and yet look where we are.
- lordnacho 4y agoA decade of basically zero interest rates. Can't they borrow the money?
- deleted 4y ago[deleted]
- em500 4y agoThis sounds almost like a parody of an uninformed rant against capitalism. Stock buybacks are a simple standard way to distribute company profit to it's owners (alternative options are dividends, retaining the profits in the balance sheet, or reinvesting them). This is decided by Intel's management and overseen by the board who represent the interest of the stock owners (who are widely dispersed and include lots of pension funds of commoners, not just billionaire fatcats). The EU by way of the European Commission appears to have decided that it's of strategic interest to subsidize Intel fabs as a way to induce them to build in Europe, as opposed to Asia (which according to Intel is 30%-40% cheaper). The European middle class is not "bailing out" anyone here. If you want to rant, a better starting point IMO is to 1) contemplate whether the European Commission is acting in the interest of the German/European citizen (and if not, how to fix this democratic deficit) 2) check if Intel's claims are truthful, and if so, why Asia is so much cheaper and whether that is worth doing something about that In any case, I don't see what Intel's stock buybacks has to do with European taxation and inflation in this case.
- olalonde 4y agoSubsidies are always bad for the common citizen so no, it is not acting in the interest of German/European citizen. Subsidies are the product of flawed economical thinking even when "national interest" is used as a BS justification.
- onepointsixC 4y agoIs it really necessary to establish the necessity of strategic domestic manufacturing capabilities in a post COVID world? We saw what happened when there was enormous need for masks, then later vaccines. The fact is that Germany as a nation that has so much of its economy linked to high tech manufacturing uniquely would benefit from securing a most domestic chip supply. The evidence for why it is necessary has already been laid bare in the past few years. The Chinese are already massively subsidizing their fabs. So is South Korea, Taiwan, and all the other major players. If you want fabs you must subsidize or die.
- IfOnlyYouKnew 4y ago
- ezsmi 4y agoThey stopped doing that in Q1 of 2021 for obvious reasons. Notice all the zeroes https://www.intc.com/stock-info/dividends-and-buybacks https://www.intc.com/stock-info/dividends-and-buybacks Also, "Upcoming Dividends: There are no future dividends presently declared for INTC as of Jun 7th, 2022. The declaration and payment of dividends are at the discretion of the Company." I suppose one could argue that they shouldn't have done that in the quarters before now but they are where they are.
- redtriumph 4y agoI think, declaring dividend is linked to their earnings report. For ex. last ER was on 4/28 and few days before that, they declared their dividend. So, its not given that there won't be any dividend in 2022 or so. Next earnings is in Jul, so we would get to know that sooner. As a side note, if any company declares dividend reduction or stops them altogether, I would expect the stock to drop like a rock. see AT&T in last year. https://seekingalpha.com/symbol/INTC/dividends/history https://seekingalpha.com/symbol/INTC/dividends/history edit: added history
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- astrange 4y agoStock buybacks are not "spending" and don't cause Intel to lose money. Germany's negative interest rates indicate they haven't been spending nearly enough, though.