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Real question is why bail out a loser? Actually, why bail out anybody?

throwaway4good 4y ago
National security.
azemetre 4y ago
There are very few companies that actually own fabs for mass production in the United States. AMD use to own fabs but they sold them quite some time ago. By virtue of being one of the five companies (while also being the largest) you’re going to easily get the money. As for why, fabs are a tremendous resource for a specialized economy and will easily become a national security risk due to how wide spread they are in the military and to sell advanced products. There’s also a de globalization movement that’s been underway for nearly a decade. Having a country whose neighbors aren’t in a politically stable region of the world is a future disaster. It’s also proven to be a disastrous domestic policy where supply constraints crunches every company. It’s likely going to take a decade to resolve the supply chain issues and it nearly takes half a decade to bring a new fab online. edit: spelling
999900000999 4y ago
Maybe bail them out with conditions. Say force them to open source chips older than a decade. I wouldn't want us to fall behind on chip tech though.
mensetmanusman 4y ago
You create the conditions for future complexity if you only allow winner takes all. AMD was bailed out for years as Intel was king, and it’s a good thing they were.
- guardiangod 4y ago
  When did AMD got bailed out?
  - pclmulqdq 4y ago
    When Intel kept settling lawsuits with them for large sums of money to avoid being broken up. These generous settlements kept AMD alive.
    - FatalLogic 4y ago
      But that's not a bailout, it is compensation for harm that Intel had caused AMD by anti-competitive behaviors
      - pclmulqdq 4y ago
        Settling for 1/10th those amounts years later (after the lawsuits look like they are going badly) would compensation for anticompetitive behavior. Settling early for the full price (or more) is a bailout.
        Retric 4y ago
        Lawsuits aren’t limited to the exact damages, Intel settled early to reduce the risk of a massive loss in the future. It’s important to realize the lawsuit could easily have survived past the point where AMD failed as a company. Just as patents get sold off so too can potential damages from lawsuits.
        pclmulqdq 4y ago
        They explicitly told people that they settled early (and generously) to avoid antitrust risk. Intel could have bankrupted AMD with the process. They chose to pay them a lot of money instead. Why? A bailout.
        Retric 4y ago
        They said that due to good marketing rather than admit wrongdoing, but being a monopoly isn’t illegal. In fact they likely qualified as a monopoly at the time.
silon42 4y ago
No reason, if you're willing to nationalize+split the monopolies.
HPsquared 4y ago
"They may be a loser, but they're our loser."
- formerkrogemp 4y ago
  The efficient market rewards inefficient stock buybacks, record debt fueled dividends, years of underinvestment, low wages, and most of all no strings attached bailouts. They may be a loser, but we'll pay for their loss. Socialize the losses/costs and privatize the gains.
api 4y ago
China's entire industrial base is state subsidized. TSMC is a strategic asset of Taiwan. The US is still strongly dominant in aerospace, and there are few efforts or companies in that entire sector that are not subsidized (largely by defense spending and NASA). I could fill up several pages with this. If nobody subsidized their industries, then maybe we could do just fine without subsidizing ours. In today's world, not subsidizing key industries is unilateral disarmament. It'd be like the USA unilaterally giving up all its nuclear weapons while Russia, China, North Korea, etc. still have theirs and hoping everyone plays nice. Ask Russia how not having domestic chip fab capability is working out for them.
sliken 4y ago
Because is TSMC was unavailable to the USA it would take many years for the USA to recover. This bail out gives the USA a head start on a TSMC replacement so that we don't have to halt production of GPUs, CPUs, phones, tablets, appliances, cars, trucks, cranes, tanks, missiles, etc. etc. etc.

National security.

There are very few companies that actually own fabs for mass production in the United States. AMD use to own fabs but they sold them quite some time ago. By virtue of being one of the five companies (while also being the largest) you’re going to easily get the money. As for why, fabs are a tremendous resource for a specialized economy and will easily become a national security risk due to how wide spread they are in the military and to sell advanced products. There’s also a de globalization movement that’s been underway for nearly a decade. Having a country whose neighbors aren’t in a politically stable region of the world is a future disaster. It’s also proven to be a disastrous domestic policy where supply constraints crunches every company. It’s likely going to take a decade to resolve the supply chain issues and it nearly takes half a decade to bring a new fab online. edit: spelling

999900000999 4y ago

Maybe bail them out with conditions. Say force them to open source chips older than a decade. I wouldn't want us to fall behind on chip tech though.

mensetmanusman 4y ago

You create the conditions for future complexity if you only allow winner takes all. AMD was bailed out for years as Intel was king, and it’s a good thing they were.

guardiangod 4y ago
When did AMD got bailed out?
- pclmulqdq 4y ago
  When Intel kept settling lawsuits with them for large sums of money to avoid being broken up. These generous settlements kept AMD alive.
  - FatalLogic 4y ago
    But that's not a bailout, it is compensation for harm that Intel had caused AMD by anti-competitive behaviors
    - pclmulqdq 4y ago
      Settling for 1/10th those amounts years later (after the lawsuits look like they are going badly) would compensation for anticompetitive behavior. Settling early for the full price (or more) is a bailout.
      - Retric 4y ago
        Lawsuits aren’t limited to the exact damages, Intel settled early to reduce the risk of a massive loss in the future. It’s important to realize the lawsuit could easily have survived past the point where AMD failed as a company. Just as patents get sold off so too can potential damages from lawsuits.
        pclmulqdq 4y ago
        They explicitly told people that they settled early (and generously) to avoid antitrust risk. Intel could have bankrupted AMD with the process. They chose to pay them a lot of money instead. Why? A bailout.
        Retric 4y ago
        They said that due to good marketing rather than admit wrongdoing, but being a monopoly isn’t illegal. In fact they likely qualified as a monopoly at the time.

silon42 4y ago

No reason, if you're willing to nationalize+split the monopolies.

HPsquared 4y ago

"They may be a loser, but they're our loser."

formerkrogemp 4y ago
The efficient market rewards inefficient stock buybacks, record debt fueled dividends, years of underinvestment, low wages, and most of all no strings attached bailouts. They may be a loser, but we'll pay for their loss. Socialize the losses/costs and privatize the gains.

api 4y ago

China's entire industrial base is state subsidized. TSMC is a strategic asset of Taiwan. The US is still strongly dominant in aerospace, and there are few efforts or companies in that entire sector that are not subsidized (largely by defense spending and NASA). I could fill up several pages with this. If nobody subsidized their industries, then maybe we could do just fine without subsidizing ours. In today's world, not subsidizing key industries is unilateral disarmament. It'd be like the USA unilaterally giving up all its nuclear weapons while Russia, China, North Korea, etc. still have theirs and hoping everyone plays nice. Ask Russia how not having domestic chip fab capability is working out for them.

sliken 4y ago

Because is TSMC was unavailable to the USA it would take many years for the USA to recover. This bail out gives the USA a head start on a TSMC replacement so that we don't have to halt production of GPUs, CPUs, phones, tablets, appliances, cars, trucks, cranes, tanks, missiles, etc. etc. etc.