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Political Chips

167 points by simonpure 4y ago

rossdavidh 4y ago
Full disclosure: I worked for AMD for about a decade. I agree with the bottom line here (we should spend gov't $$ to make sure significant amounts of chip manufacturing still get made in the US, and Intel has to be a big part of that). However, it misses the real reason for Intel's decline. For most of it's existence, if Intel had missed a manufacturing node in Moore's Law, it would have been rightly recognized as an existential threat, and it would have become the #1 focus of the CEO and the rest of the company. Intel fell behind Moore's Law for years in its manufacturing, and it never caused them to appropriately panic until that hit the bottom line. This is a problem of an executive suite too focused on this quarter's results, and not focused enough on the engineering that drives those results. Previous generations of Intel executives understood that. It is likely that the current CEO, brought in once the board saw problems in their stock price, realizes it. If they had been run by executives who cared more about the underlying engineering, they would have had a 5-year head start in fixing the situation.
- deehouie 4y ago
  I heard this so many times. These goddamn CEOs are so myopic; all they care is next quarter's earnings. After the fall of every megacap, tech or otherwise (recently GE), someone always blames them for short sightedness. Is that really? Well, many CEOs of many huge corporations just plan for the next quarter, and they seem to be doing just fine.
  - dmix 4y ago
    The average large corporation is typically in a stable/stagnant industry that is nowhere near as competitive as chips, where the stakes are 100x higher. They get by being the largest kid on the block and few young companies chomping at the bit, and a series of B/C-tier competitors even dumber and poorly run that they can't even do the next quarter effectively. Countless mega-corps are just floating by with the ebbs and flows of a market, burning off some early moment of success. Staying at the top longer than a decade or two (usually the timeframe where other market entrants take notice of your weakness) is the real test. Otherwise just being a decent manager/leader that keeps the existing established business model chugging along and hiring slightly above average executives to put out fires is good enough.
  - rossdavidh 4y ago
    Well not all CEOs are so myopic; Andy Grove of Intel was not, for example. Whether or not a next-quarter focus works, probably depends on the industry. In semiconductors, especially high-performance semiconductors, the R&D on manufacturing this year determines whether the design several years from now is able to be competitive, so there is a need to be more forward looking.
- eru 4y ago
  > we should spend gov't $$ to make sure significant amounts of chip manufacturing still get made in the US, [...] Why? And would your rationale apply to other countries as well?
  - Thorrez 4y ago
    Regarding your first question: >The reason this matters is because chips matter for many use cases outside of PCs and servers — Intel’s focus — which is to say that TSMC matters. Nearly every piece of equipment these days, military or otherwise, has a processor inside. Some of these don’t require particularly high performance, and can be manufactured by fabs built years ago all over the U.S. and across the world; others, though, require the most advanced processes, which means they must be manufactured in Taiwan by TSMC. >This is a big problem if you are a U.S. military planner. Your job is not to figure out if there will ever be a war between the U.S. and China, but to plan for an eventuality you hope never occurs. And in that planning the fact that TSMC’s foundries — and Samsung’s — are within easy reach of Chinese missiles is a major issue. Regarding your second question, what companies and countries do you have in mind?
    - eru 4y ago
      For the second question I meant: if everyone is trying to build chips at home, at best we get an expensive and inefficient arms-race for subsidies. At worst we get trade-wars or actual wars.
  - dash2 4y ago
    Because you can't make war without chips. During war, global supply chains are cut off. And if you can't make war, then you can't have a global order on your terms. Instead, you have a global order on the terms of the Chinese. They become powerful and rich. You (and your allies) become weak and poor. You make chips in the US for the same reason you make nukes in the US. It applies to other countries only insofar as they want to be independent. Most Western countries can shelter under the US umbrella. Again, same as with nukes.
    - 4y ago
- mhh__ 4y ago
  Intel's engineers apparently got too ambitious rather than got lazy.
- amelius 4y ago
  Sounds similar to Boeing. You begin to wonder when these kind of lessons start entering management textbooks.
  - jimkleiber 4y ago
    I was just gonna say that the Intel case may fit well in this book called Obliquity[0], which ironically discusses Boeing. I believe it said that Boeing was less profitable when it focused on increasing profits and more profitable when it focused on improving engineering. [0]: https://www.johnkay.com/product/obliquity/ https://www.johnkay.com/product/obliquity/
    - spamizbad 4y ago
      I've noticed a pattern of how executives approach this: 1) When looking for more profits/revenue at a technology company, they'll often either try to push an R&D "big bet" to market half-baked, in hopes of it pulling in new revenue OR put the screws to product and engineering to churn out some "quick wins" to give them some momentum. 2) When focusing more on engineering, it's often because they're either distracted by other challenges faced by the organization outside of engineering OR they are up against an existential threat that mandates engineering investment and letting them steer the strategy somewhat.
  - alexashka 4y ago
    They can't. It'd undermine the very existence of the ruling elite class that doesn't know how to do anything, besides 'managing' by following a magic formula taught at Harvard, Stanford, etc. The problem is the existence of a business management layer as an idea - it's an attempt to get back to the good old days of feudalism, whose chief characteristics are nepotism, stagnation, corruption and nihilism, now that we've gotten rid of the mental pacifier of 'heaven' for the oppressed and hell for the ruling elites (religion).
    - jjtheblunt 4y ago
      this is the most resonant comment I've seen in months, as it entirely fits my experiences in engineering inside Apple, and later Amazon and Facebook. the inner sanctum of very flat Apple was as far from feudalism as could be, for my several years, and it functioned like a very performant ecosystem of engineering. This diametrically contrasts precisely with Amazon engineering, where I saw all the horrors of feudalism and generalized nepotism (racism for example, sexism promoting incapable people to fit quotas, and flagrant corruption). Facebook was somewhere more like Apple but not in its DNA...just in the imitation is flattery sense.
- mandevil 4y ago
  In general I don't believe that being an engineer is necessary to run a technology business (some of my best leaders were not), but I have come around to believing that Intel and Boeing are exceptions: the nature of their business requires new massive bets- not quite 'bet the company' but definitely 'bet the next 10 years of company performance' every so often (new fabs and new planes), and that one decision really needs to be made by an experienced engineer, due to the nature of the underlying evaluation. If not, then people who think they can bafflegab mother nature the same way they can auditors will make the decisions.
  - neuronexmachina 4y ago
    An interesting example is Dennis Muilenberg, who was Boeing CEO from 2015-2019, during the 737 Max debacle: https://en.wikipedia.org/wiki/Dennis_Muilenburg https://en.wikipedia.org/wiki/Dennis_Muilenburg He started at Boeing in 1985 as an engineering intern, earned a masters in Aeronautics, and worked his way through management and engineering positions until he became CEO. I have no idea how much of the 737 Max issues could be placed on him directly, but he was CEO during its launch and the crashes.
    - nickff 4y ago
      Dennis Muilenberg also featured in the NOVA documentary "War of the X-Planes", around the middle of his career, where he appeared to be a risk-taking, forward-thinking engineering manager. Of note, I believe that a significant portion of his career was spent on the 'defense' side of Boeing, which some have blamed for the company's problems. I personally place more blame on Muilenberg's predecessor, James McNerney, a former Proctor & Gamble, and 3M executive.
    - mandevil 4y ago
      The key 737 Max decisions were made circa 2011-2013, while James McNerney was the CEO (2005-2015). That was when the design objective of no simulator training required was set for the plane (and Boeing released marketing information promising that) while also promising to do it with engines that were too big for the wings. That decision was what led to everything else, and was loudly announced and marketed while Muilenburg was over on the Integrated Defense side of the company. James McNerney was a Harvard MBA who spent time at McKinsey before going to the Jack Welch clown show at GE, where he ran the aircraft engine business for a long time. When he lost out to Immelt to be CEO there, he went to 3M for a few years then bounced to Boeing. Now, Muilenburg has to bear the mistakes he made: pushing an unsafe plane through certification, not listening to the right people, not investigating the Lion Air crash sufficiently, etc. But the evidence I think strongly shows that someone who was not an engineer was making the final decisions on the "bet the company for the next 10 years" choice to go forward with the 737Max rather than a clean-sheet design, back in 2011.
- formerkrogemp 4y ago
  You could apply this with slightly different specifics to many US national and multinational corporations. 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.
  - lotsofpulp 4y ago
    Based on the performance of publicly listed companies in the last 15 years, the stock market has rewarded companies with great cash flow, high profits, and relatively rosy outlooks. Of course there is an underlying assumption the government will bail out simultaneous/systemic big failures, but it does not seem accurate to assume any random business will be bailed out. Edit : fixed typo
    - PaulDavisThe1st 4y ago
      > but it does it [sic] seem accurate to assume any random business will be bailed out. Precisely the issue. It's not "any random business". It's any business with the appropriate properties and connections. If it was truly just random business, perhaps the bail outs would not create such a level of moral hazard. But it's not, and businesses know that.
      - megaman821 4y ago
        I don't like the bailout but I understand they were necessary. I just wish they came with harsher deterrents. Like if the shareholders vote to take a bailout, the Board, C-Suite, and VP's all get let go and any financial packages can be litigated in special bailout courts.
- georgeecollins 4y ago
  I think this is a result of the problem of financializaton. I don't think that an engineer has to run a company like Intel, Boeing or Apple. But if the growth of steady profits becomes a higher priority than what you actually produce, you are likely to milk the business at the expense of its long term prospects.
  - sanxiyn 4y ago
    I mostly disagree with this line of reasoning. Yes, financialization is bad, but Intel would have been fine if its process went fine. We probably will never know what exactly went wrong, but I think the current best guess is this: Intel set minimum metal pitch target for its 10 nm process at 36 nm, while TSMC set minimum metal pitch target for its 7 nm process (equivalent to Intel 10 nm process) at 40 nm. These processes were the last before EUV, pushing DUV to its limit. It turned out that you can do 40 nm but not 36 nm. That's it. It was an extremely technical issue, with justifications on both sides, and Intel's decision wasn't obviously mistaken, even in retrospect. 36 nm was usual scaling to Moore's law. It was 40 nm that was unusual, TSMC underscaled metal relative to fin and gate. Why 40 nm? Because it was the limit of DUV double patterning. But Intel also knew that! That's why Intel went with quadruple patterning. It was a conservative choice to underscale metal to the limit of double patterning, but quadruple patterning wasn't crazy either. Everyone was using quadruple patterning for fin at this point, so it wasn't thought that risky. Should Intel have reconsidered this once they encountered yield issues? Yes, but that's hindsight. All processes experience yield issues. Intel probably thought they can be solved, faster than going back to drawing board and doing everything again. Unfortunately they couldn't. (Above analysis was informed by lots of reading on this topic I did over the years, but https://semiwiki.com/semiconductor-manufacturers/intel/7433-intel-10nm-yield-issues/ https://semiwiki.com/semiconductor-manufacturers/intel/7433-... in particular.)
    - georgeecollins 4y ago
      That's a better explanation for what went wrong at Intel. But I would also point to many other companies: Boeing, General Motors etc. that had really excellent products once upon a time and then faltered. Every case is very complicated and has many reasons.
- throwaway4good 4y ago
  For an example of a broken company: https://twitter.com/dylan522p/status/1554889887630761985 https://twitter.com/dylan522p/status/1554889887630761985 Intel with a bunch of Optane related presentations at #FlashMemorySummit Some the Intel folks I spoke to about this (not pictured) had no clue it was going to be cancelled until they read it on an article from Toms Hardware.
  - fomine3 4y ago
    Could it be opposite? Intel gave up Optane products so they release their research to community without worrying competitors catch up. No disclosure is due to pre-IR compliance.
    - throwaway4good 4y ago
      There is a way of telling your own people what is going on without breaking the rules of being a public traded company. This is just bad form.
- lr1970 4y ago
  > For most of it's existence, if Intel had missed a manufacturing node in Moore's Law, it would have been rightly recognized as an existential threat, and it would have become the #1 focus of the CEO and the rest of the company. Former Intel-er here. You hit it on the nail. Andy Grove used to say "Only paranoid survive" and acted accordingly. But when Paul Otellini became the CEO it was downhill ever since.
  - midoridensha 4y ago
    No, it was going downhill when Craig Barrett was CEO. He made lots of stupid mistakes, getting involved in too many risky and unnecessary ventures (like consumer products: remember the Intel keyboard and mouse? Or music player? Or worse, microscope?). The big one was tying the P4 processor to RAMBUS memory.
    - lr1970 4y ago
      Yes, it started with Barrett but became painfully obvious under Otellini. When Steve Jobs asked Intel to build a chip for future iPhone Otellini said no -- one of the biggest strategic blunders. Also in 2005 Intel paid Dell not to use superior AMD offering instead of putting all hands on deck fixing their own (they did achieve parity eventually).
kache_ 4y ago
photochemsyn 4y ago
> "The most important decision was shifting to extreme ultraviolet lithography at a time when Intel thought it was much too expensive and difficult to implement; TSMC, backed by Apple’s commitment to buy the best chips it could make, committed to EUV in 2014, and delivered the first EUV-derived chips in 2019 for the iPhone. Those EUV machines are made by one company — ASML. They’re worth more than Intel too (and Intel is a customer)." CNBC toured ASML clean rooms in a very interesting video. IIRC, the only thing keeping ASML from exporting these machines to China is some EU/USA export control rule: https://www.youtube.com/watch?v=iSVHp6CAyQ8 https://www.youtube.com/watch?v=iSVHp6CAyQ8
mark_l_watson 4y ago
I am a Libertarian so this may seem like an odd comment: I support some government intervention to design and manufacture of at least low tech chips (adequate for laptops, tractors, industrial uses in general). I am not a hardware expert, but given that the Open RISC projects seem very worthy of support, both in design efforts and multiple inside the US fab facilities. TSMC’s new 5nm factory just opened 60 miles south of where I live in Arizona is also the kind of progress I want to see. I am a fan of globalization but we need to balance that with good “Plan B’s” for building what we really need inside the US.
- lotsofpulp 4y ago
  It is not odd to be Libertarian and support government intervention that benefits one’s self. Hypocritical, maybe, but a common sentiment.
  - mark_l_watson 4y ago
    That is how I see it. I often drift into hypocrisy: I am 100% anti-war except if my country was directly attacked, but in the financial interests of me and my family, I do own “defense” stocks. Also in my own self interest: I am for our government massively supporting poor kids with meals at schools, special tutoring, etc. in order for us to have a larger and better educated work force in the future. Anyway sorry for the rant.
    - NikolaNovak 4y ago
      fwiw it didn't come through as a rant. Most of us if we are honest with ourselves have internal contradictions. It's important to be aware. My wife is fundamentally a socialist (we are in Canada so it's not a misunderstood bad scary word :-). But she is also a home depot manager, where she is the voice of capitalist market forces. What she wishes the system should be, and the system she is daily a part of, are frequently at odds. I personally find extremes of any given philosophy to be impractical and untenable. I respect more people who, like it appears yourself, say "this is my general leaning,and these are my pragmatical exceptions".
klelatti 4y ago
Great piece but it seems that Ben doesn't quite finish joining the dots. If Intel is to have a successful foundry business at the cutting edge then its customers will be those firms that are designing cutting edge CPUs, SoCs and GPUs. That means Apple & Qualcomm (possibly OK) but also Nvidia, AMD and other Arm based competitors with Intel's CPUs and GPUs. Can't see how this will work with Intel in its current form.
- hyperation 4y ago
  Perhaps a duopoly in domestic chip fabrication, with both Intel and TSMC operating fabs in the continental U.S.
  - sanxiyn 4y ago
    I think klelatti is doubting whether AMD could trust Intel to pursue AMD's best interest.
    - klelatti 4y ago
      Absolutely! Handing over your detailed product specifications and product plans to a direct competitor is inconceivable. I’m 100% convinced now that an Intel split into foundry and CPU vendor is inevitable. It’s a political if not a commercial necessity if Intel is to provide a viable alternative to TSMC.
      - sanxiyn 4y ago
        Samsung manufactured for Apple for a long time. I don't think it's inconceivable.
        klelatti 4y ago
        That’s a fair challenge. I think it’s a little different though - the SoC was one component of the iPhone - so full details of the competing product weren’t being shared. Plus when the relationship started volumes were small for both iPhone and Samsung phones. As we know Apple ended the relationship eventually. I struggle to see Lisa Su handing this info to Intel even with some strong safeguards.
throwaway4good 4y ago
Intel tried very hard to get Apple as a customer for the iPhone. They knew very well of mr. Christensen but they simply could not deliver hinting that Intel's problems are not that of strategy but at a lower more fundamental level of competence and ability to organise. (The stuff about RISC/CISC is a red herring - it basically doesn't matter on a modern cpu.) Here is an article about Intel and Christensen with clip of him from 2012 (or earlier) where he mentions his work with Intel. https://www.edgementoring.org/leadership-blog/clayten-christensen-taught-intel-ceo-what-to-think-not-how-to-think-and-why-thats-important https://www.edgementoring.org/leadership-blog/clayten-christ... Christensen Taught Intel CEO How To Think And Why It's Important
- aidenn0 4y ago
  I think Intel "tried very hard" from the point of view of a small company, but the fraction of Intel's resources put behind it was minuscule and felt very perfunctory. Right or wrong, they had zero interest in betting the future of the company on low-power chips for mobile, or any other market. [edit] I just read the wikipedia summary of the prescription for incumbents in The Innovator's Dillema and the one thing Intel was missing was: > They allow the disruption organization to utilize all of the company's resources when needed but are careful to make sure the processes and values were not those of the company. To a certain extent, it feels like buying a cloud offering from AWS vs. Google. Google might have a lot of resources dedicated in absolute terms to the cloud offering, but it feels like an afterthought that might go away at any moment. The AWS offering feels like a real product that Amazon plans on making money from. In both the cases of Intel and Google, I can't say which is true, but customers can only make their plans based on appearances, not reality.
  - throwaway4good 4y ago
    The textbook solution is for the incumbent to spin off companies to deal with the disruptor. And one of the textbook examples is Intel.
alain94040 4y ago
I'm usually a big fan of stratechery, but for once I disagree with the explanation of Intel's decline. I think it's much simpler: being number one in fab technology is mostly driven by volume: whoever has the most volume wins. During the PC era, Intel had the most volume, so they also had the best fabs. It's a winner-take-all, self-reinforcing ecosystem. But in the last 10 years, mobile has had the highest volume. That's what allows TSMC to have the best fabs, and Intel is struggling. That's all there is to it. Nothing to do with services or software.
- klelatti 4y ago
  The CISC vs RISC point Ben makes is key here. Intel could have been a big player in mobile: it put too much focus on x86 though when it could have been making (its own or others) Arm based SoCs. Edit: not that Arm is necessarily RISC - but it certainly takes an approach that is different to x86 and better suited to mobile.
  - marcosdumay 4y ago
    Intel tried to make Arm SoCs. But their customer management sucked, so in the end they only manufactured the SoCs that they designed, and didn't sell enough of them to be sustainable.
  - caycep 4y ago
    Also perhaps there's a role where software/architecture just got better - they didn't have LLVM or other forms of code translation (if I'm phrasing that right) back then which seems to make the cpu architecture less of a critical issue.
  - jjtheblunt 4y ago
    Intel was making its own ARM chips called Xscale 20 years ago, no?
    - klelatti 4y ago
      Indeed and XScale was successor to StrongARM which I think was highest performing Arm design for a while. Sold to Marvell in 2006 right before the iPhone appeared. Intel then spent billions trying to make x86 commercially viable on mobile.
throwaway4good 4y ago
Intel is in big trouble and the only card they have left is the nationalism card. And that card is for losers. We are about to enter a silicon slump with low demand and oversupply; for Intel things will get worse. What will happen when it is clear to everyone including politicians that all that subsidy money is going into a black hole? And people finally figure out that a rocket that blows up stuff doesn't need a 2nm chip? They are going to lose interest and those subsidies that is Intel's last hope will end.
- dash2 4y ago
  > Intel is in big trouble and the only card they have left is the nationalism card. And that card is for losers. No. It's 2022 not 2006. That card will win big, and deserves to.
- groby_b 4y ago
  "We are about to enter a silicon slump with low demand and oversupply" What causes you to assume that? "What will happen [if...] people finally figure out that a rocket that blows up stuff doesn't need a 2nm chip?" One, they'll learn that we're not doing too hot on custom chip fabs in general? They'll also, if they're really that dense, learn that we need chips for a few more things than to make things go boom. (FWIW, they're not that dense.) "They are going to lose interest and those subsidies that is Intel's last hope will end." Even if the rest of your statements were correct (and I don't think they are), that is absolutely not how subsidies work. Local subsidies translate to local jobs translate to votes. Keeping them running is rather important to politicians. So, no, "lose interest" is not exactly the most likely failure mode here.
  - marcosdumay 4y ago
    > What causes you to assume that? Companies have been filling their stockpiling, and anticipating years of demand so they have a safety buffer for many months already. It's natural that this is followed by low demand. At the same time, the world seems to be entering a recession.
  - est 4y ago
deleted 4y ago
[deleted]
kipchak 4y ago
>"the goal should be to counteract the fundamental forces pushing manufacturing to geopolitically risky regions, and Intel is the only real conduit available to do that." I wonder if it's fair to assume based on this the US gov will prop up intel as a foundry for as long as necessary, to secure it's own supply and reduce reliance on Taiwan/TSMC.
adamsvystun 4y ago
> The most important decision was shifting to extreme ultraviolet lithography at a time when Intel thought it was much too expensive and difficult to implement; TSMC, backed by Apple’s commitment to buy the best chips it could make, committed to EUV in 2014, and delivered the first EUV-derived chips in 2019 for the iPhone. Can somebody here correct me if I am wrong, but my impression was that Intel did commit early to EUV, with initial plans to start high volume manufacturing in line with other fabs (initial schedule was to introduce EUV in 2017 [1], it just got postponed many times), but they just failed in their execution. [1] https://wccftech.com/idf13-intel-ship-10nm-chips-2015-7nm-chips-2017/ https://wccftech.com/idf13-intel-ship-10nm-chips-2015-7nm-ch...
- Throwawayaerlei 4y ago
  I think your citation is 9 years old. What I've always heard is what they called 10 nm was non-EUV. You are correct that what they called 7 nm was going to use EUV, pretty much had to, but 10 nm catastrophically failed and the company responded very poorly to that. Not that long ago I remember reading, forget at what confidence level, that their old 7 mn was believed to have the potential to leapfrog their 10 nm and save the company, but others said they had some problematic things in common (not counting the very poorly run company!) that made that unlikely. In any event what was 7 nm did not ride to the company's rescue.
  - adrian_b 4y ago
    Their 7 nm process has been renamed now as "Intel 4" and there is a presentation of it at Anandtech, which looks more credible than the fake presentations of the 10 nm process of some years ago. The first product using this process, Meteor Lake, is expected 1 year from now.
    - Throwawayaerlei 4y ago
      Meteor Lake/Intel 4 would then be six years late if the wccftech.com article's commentary on the two nodes was correct. Good to hear about the presentation material, thanks!
pphysch 4y ago
I wonder to what extent Washington's fuss over Taiwan is simply TSMC lobbying at work. They're an important company that is gonna get their lunch eaten by the mainland. But what can Washington even do about it? Beyond the "unsinkable aircraft carrier" angle, that is.
- Throwawayaerlei 4y ago
  "[TSMC is] an important company that is gonna get their lunch eaten by the mainland." How so? Not for the foreseeable future in bleeding and leading edge nodes, where the PRC is some unknown but very long distance away from making their own EUV machines. An invasion of Taiwan just means an end to TSMC production there, a point its chairman Mark Liu made a few days ago in a CNN interview. That would have really bad effects on the PRC's narrow economy with its export focus.
  - tshadley 4y ago
    Very good points. Here's the link. https://transcripts.cnn.com/show/fzgps/date/2022-07-31/segment/01 https://transcripts.cnn.com/show/fzgps/date/2022-07-31/segme... LIU: Nobody can control TSMC by force. If you take a military force or invasion you will render TSMC's factory non-operable because this is such a sophisticated manufacturing facility. It depends on the real time [correlation] with the outside world, with Europe, with Japan, with the U.S., from materials to chemicals to spare parts to engineering software diagnosis. And it's everybody's effort to maybe this factory operable. So if you take it over by force you can no longer make it operable.
    - octoberfranklin 4y ago
      China doesn't need to take TSMC by force. All they need to do by force is install a puppet government in Taipei. No bombs will fall anywhere near TSMC's facilities. No tanks will go anywhere near their employee parking lots. Life will go on just like before. For a few years, at least. It'll be just like Hong Kong. No bloodshed there either.
  - pphysch 4y ago
keepquestioning 4y ago
How would one profit off the next few years of political chipmaking?
- throwaway4good 4y ago
  Pork futures.
- throwaway4good 4y ago
  Chinese semiconductor companies. If this insanity continues (nationalism and sanctions), the massive Chinese market will end up being serviced only by Chinese chip companies. Some of these are investable via the Chinese or Hong Kong stock markets.
robocat 4y ago
AMDs spin-off of Global Foundries only gets mentioned once as an aside, yet surely there are multiple important reasons why that story is relevant to Intel.
mikewarot 4y ago
Chips are great, but you need discrete components, circuit boards, and other support, and the manufacturing infrastructure for all of that. Do we really have all of that in sufficient quantity domestically any more?
zbird 4y ago
> This is why Intel’s shift to being not simply an integrated device manufacturer but also a foundry is important: yes, it’s the right thing to do for Intel’s business, but it’s also good for the West if Intel can pull it off. It's good for the US, not "the West".
- MauranKilom 4y ago
  Intel is also building a new fab in Germany. So no, it's not just the US.
  - zbird 4y ago
    The article is in the context of the US and the CHIPS Act, it doesn't even mention Europe. Or is the CHIPS Act also funding fabs in Europe? I'm not sure it does Europe good to make US-surveillance-ridden chips either.

167 points by simonpure 4y ago

Full disclosure: I worked for AMD for about a decade. I agree with the bottom line here (we should spend gov't $$ to make sure significant amounts of chip manufacturing still get made in the US, and Intel has to be a big part of that). However, it misses the real reason for Intel's decline. For most of it's existence, if Intel had missed a manufacturing node in Moore's Law, it would have been rightly recognized as an existential threat, and it would have become the #1 focus of the CEO and the rest of the company. Intel fell behind Moore's Law for years in its manufacturing, and it never caused them to appropriately panic until that hit the bottom line. This is a problem of an executive suite too focused on this quarter's results, and not focused enough on the engineering that drives those results. Previous generations of Intel executives understood that. It is likely that the current CEO, brought in once the board saw problems in their stock price, realizes it. If they had been run by executives who cared more about the underlying engineering, they would have had a 5-year head start in fixing the situation.

deehouie 4y ago
I heard this so many times. These goddamn CEOs are so myopic; all they care is next quarter's earnings. After the fall of every megacap, tech or otherwise (recently GE), someone always blames them for short sightedness. Is that really? Well, many CEOs of many huge corporations just plan for the next quarter, and they seem to be doing just fine.
- dmix 4y ago
  The average large corporation is typically in a stable/stagnant industry that is nowhere near as competitive as chips, where the stakes are 100x higher. They get by being the largest kid on the block and few young companies chomping at the bit, and a series of B/C-tier competitors even dumber and poorly run that they can't even do the next quarter effectively. Countless mega-corps are just floating by with the ebbs and flows of a market, burning off some early moment of success. Staying at the top longer than a decade or two (usually the timeframe where other market entrants take notice of your weakness) is the real test. Otherwise just being a decent manager/leader that keeps the existing established business model chugging along and hiring slightly above average executives to put out fires is good enough.
- rossdavidh 4y ago
  Well not all CEOs are so myopic; Andy Grove of Intel was not, for example. Whether or not a next-quarter focus works, probably depends on the industry. In semiconductors, especially high-performance semiconductors, the R&D on manufacturing this year determines whether the design several years from now is able to be competitive, so there is a need to be more forward looking.
eru 4y ago
> we should spend gov't $$ to make sure significant amounts of chip manufacturing still get made in the US, [...] Why? And would your rationale apply to other countries as well?
- Thorrez 4y ago
  Regarding your first question: >The reason this matters is because chips matter for many use cases outside of PCs and servers — Intel’s focus — which is to say that TSMC matters. Nearly every piece of equipment these days, military or otherwise, has a processor inside. Some of these don’t require particularly high performance, and can be manufactured by fabs built years ago all over the U.S. and across the world; others, though, require the most advanced processes, which means they must be manufactured in Taiwan by TSMC. >This is a big problem if you are a U.S. military planner. Your job is not to figure out if there will ever be a war between the U.S. and China, but to plan for an eventuality you hope never occurs. And in that planning the fact that TSMC’s foundries — and Samsung’s — are within easy reach of Chinese missiles is a major issue. Regarding your second question, what companies and countries do you have in mind?
  - eru 4y ago
    For the second question I meant: if everyone is trying to build chips at home, at best we get an expensive and inefficient arms-race for subsidies. At worst we get trade-wars or actual wars.
- dash2 4y ago
  Because you can't make war without chips. During war, global supply chains are cut off. And if you can't make war, then you can't have a global order on your terms. Instead, you have a global order on the terms of the Chinese. They become powerful and rich. You (and your allies) become weak and poor. You make chips in the US for the same reason you make nukes in the US. It applies to other countries only insofar as they want to be independent. Most Western countries can shelter under the US umbrella. Again, same as with nukes.
  - 4y ago
mhh__ 4y ago
Intel's engineers apparently got too ambitious rather than got lazy.
amelius 4y ago
Sounds similar to Boeing. You begin to wonder when these kind of lessons start entering management textbooks.
- jimkleiber 4y ago
  I was just gonna say that the Intel case may fit well in this book called Obliquity[0], which ironically discusses Boeing. I believe it said that Boeing was less profitable when it focused on increasing profits and more profitable when it focused on improving engineering. [0]: https://www.johnkay.com/product/obliquity/ https://www.johnkay.com/product/obliquity/
  - spamizbad 4y ago
    I've noticed a pattern of how executives approach this: 1) When looking for more profits/revenue at a technology company, they'll often either try to push an R&D "big bet" to market half-baked, in hopes of it pulling in new revenue OR put the screws to product and engineering to churn out some "quick wins" to give them some momentum. 2) When focusing more on engineering, it's often because they're either distracted by other challenges faced by the organization outside of engineering OR they are up against an existential threat that mandates engineering investment and letting them steer the strategy somewhat.
- alexashka 4y ago
  They can't. It'd undermine the very existence of the ruling elite class that doesn't know how to do anything, besides 'managing' by following a magic formula taught at Harvard, Stanford, etc. The problem is the existence of a business management layer as an idea - it's an attempt to get back to the good old days of feudalism, whose chief characteristics are nepotism, stagnation, corruption and nihilism, now that we've gotten rid of the mental pacifier of 'heaven' for the oppressed and hell for the ruling elites (religion).
  - jjtheblunt 4y ago
    this is the most resonant comment I've seen in months, as it entirely fits my experiences in engineering inside Apple, and later Amazon and Facebook. the inner sanctum of very flat Apple was as far from feudalism as could be, for my several years, and it functioned like a very performant ecosystem of engineering. This diametrically contrasts precisely with Amazon engineering, where I saw all the horrors of feudalism and generalized nepotism (racism for example, sexism promoting incapable people to fit quotas, and flagrant corruption). Facebook was somewhere more like Apple but not in its DNA...just in the imitation is flattery sense.
mandevil 4y ago
In general I don't believe that being an engineer is necessary to run a technology business (some of my best leaders were not), but I have come around to believing that Intel and Boeing are exceptions: the nature of their business requires new massive bets- not quite 'bet the company' but definitely 'bet the next 10 years of company performance' every so often (new fabs and new planes), and that one decision really needs to be made by an experienced engineer, due to the nature of the underlying evaluation. If not, then people who think they can bafflegab mother nature the same way they can auditors will make the decisions.
- neuronexmachina 4y ago
  An interesting example is Dennis Muilenberg, who was Boeing CEO from 2015-2019, during the 737 Max debacle: https://en.wikipedia.org/wiki/Dennis_Muilenburg https://en.wikipedia.org/wiki/Dennis_Muilenburg He started at Boeing in 1985 as an engineering intern, earned a masters in Aeronautics, and worked his way through management and engineering positions until he became CEO. I have no idea how much of the 737 Max issues could be placed on him directly, but he was CEO during its launch and the crashes.
  - nickff 4y ago
    Dennis Muilenberg also featured in the NOVA documentary "War of the X-Planes", around the middle of his career, where he appeared to be a risk-taking, forward-thinking engineering manager. Of note, I believe that a significant portion of his career was spent on the 'defense' side of Boeing, which some have blamed for the company's problems. I personally place more blame on Muilenberg's predecessor, James McNerney, a former Proctor & Gamble, and 3M executive.
  - mandevil 4y ago
    The key 737 Max decisions were made circa 2011-2013, while James McNerney was the CEO (2005-2015). That was when the design objective of no simulator training required was set for the plane (and Boeing released marketing information promising that) while also promising to do it with engines that were too big for the wings. That decision was what led to everything else, and was loudly announced and marketed while Muilenburg was over on the Integrated Defense side of the company. James McNerney was a Harvard MBA who spent time at McKinsey before going to the Jack Welch clown show at GE, where he ran the aircraft engine business for a long time. When he lost out to Immelt to be CEO there, he went to 3M for a few years then bounced to Boeing. Now, Muilenburg has to bear the mistakes he made: pushing an unsafe plane through certification, not listening to the right people, not investigating the Lion Air crash sufficiently, etc. But the evidence I think strongly shows that someone who was not an engineer was making the final decisions on the "bet the company for the next 10 years" choice to go forward with the 737Max rather than a clean-sheet design, back in 2011.
formerkrogemp 4y ago
You could apply this with slightly different specifics to many US national and multinational corporations. 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.
- lotsofpulp 4y ago
  Based on the performance of publicly listed companies in the last 15 years, the stock market has rewarded companies with great cash flow, high profits, and relatively rosy outlooks. Of course there is an underlying assumption the government will bail out simultaneous/systemic big failures, but it does not seem accurate to assume any random business will be bailed out. Edit : fixed typo
  - PaulDavisThe1st 4y ago
    > but it does it [sic] seem accurate to assume any random business will be bailed out. Precisely the issue. It's not "any random business". It's any business with the appropriate properties and connections. If it was truly just random business, perhaps the bail outs would not create such a level of moral hazard. But it's not, and businesses know that.
    - megaman821 4y ago
      I don't like the bailout but I understand they were necessary. I just wish they came with harsher deterrents. Like if the shareholders vote to take a bailout, the Board, C-Suite, and VP's all get let go and any financial packages can be litigated in special bailout courts.
georgeecollins 4y ago
I think this is a result of the problem of financializaton. I don't think that an engineer has to run a company like Intel, Boeing or Apple. But if the growth of steady profits becomes a higher priority than what you actually produce, you are likely to milk the business at the expense of its long term prospects.
- sanxiyn 4y ago
  I mostly disagree with this line of reasoning. Yes, financialization is bad, but Intel would have been fine if its process went fine. We probably will never know what exactly went wrong, but I think the current best guess is this: Intel set minimum metal pitch target for its 10 nm process at 36 nm, while TSMC set minimum metal pitch target for its 7 nm process (equivalent to Intel 10 nm process) at 40 nm. These processes were the last before EUV, pushing DUV to its limit. It turned out that you can do 40 nm but not 36 nm. That's it. It was an extremely technical issue, with justifications on both sides, and Intel's decision wasn't obviously mistaken, even in retrospect. 36 nm was usual scaling to Moore's law. It was 40 nm that was unusual, TSMC underscaled metal relative to fin and gate. Why 40 nm? Because it was the limit of DUV double patterning. But Intel also knew that! That's why Intel went with quadruple patterning. It was a conservative choice to underscale metal to the limit of double patterning, but quadruple patterning wasn't crazy either. Everyone was using quadruple patterning for fin at this point, so it wasn't thought that risky. Should Intel have reconsidered this once they encountered yield issues? Yes, but that's hindsight. All processes experience yield issues. Intel probably thought they can be solved, faster than going back to drawing board and doing everything again. Unfortunately they couldn't. (Above analysis was informed by lots of reading on this topic I did over the years, but https://semiwiki.com/semiconductor-manufacturers/intel/7433-intel-10nm-yield-issues/ https://semiwiki.com/semiconductor-manufacturers/intel/7433-... in particular.)
  - georgeecollins 4y ago
    That's a better explanation for what went wrong at Intel. But I would also point to many other companies: Boeing, General Motors etc. that had really excellent products once upon a time and then faltered. Every case is very complicated and has many reasons.
throwaway4good 4y ago
For an example of a broken company: https://twitter.com/dylan522p/status/1554889887630761985 https://twitter.com/dylan522p/status/1554889887630761985 Intel with a bunch of Optane related presentations at #FlashMemorySummit Some the Intel folks I spoke to about this (not pictured) had no clue it was going to be cancelled until they read it on an article from Toms Hardware.
- fomine3 4y ago
  Could it be opposite? Intel gave up Optane products so they release their research to community without worrying competitors catch up. No disclosure is due to pre-IR compliance.
  - throwaway4good 4y ago
    There is a way of telling your own people what is going on without breaking the rules of being a public traded company. This is just bad form.
lr1970 4y ago
> For most of it's existence, if Intel had missed a manufacturing node in Moore's Law, it would have been rightly recognized as an existential threat, and it would have become the #1 focus of the CEO and the rest of the company. Former Intel-er here. You hit it on the nail. Andy Grove used to say "Only paranoid survive" and acted accordingly. But when Paul Otellini became the CEO it was downhill ever since.
- midoridensha 4y ago
  No, it was going downhill when Craig Barrett was CEO. He made lots of stupid mistakes, getting involved in too many risky and unnecessary ventures (like consumer products: remember the Intel keyboard and mouse? Or music player? Or worse, microscope?). The big one was tying the P4 processor to RAMBUS memory.
  - lr1970 4y ago
    Yes, it started with Barrett but became painfully obvious under Otellini. When Steve Jobs asked Intel to build a chip for future iPhone Otellini said no -- one of the biggest strategic blunders. Also in 2005 Intel paid Dell not to use superior AMD offering instead of putting all hands on deck fixing their own (they did achieve parity eventually).

kache_ 4y ago

photochemsyn 4y ago

> "The most important decision was shifting to extreme ultraviolet lithography at a time when Intel thought it was much too expensive and difficult to implement; TSMC, backed by Apple’s commitment to buy the best chips it could make, committed to EUV in 2014, and delivered the first EUV-derived chips in 2019 for the iPhone. Those EUV machines are made by one company — ASML. They’re worth more than Intel too (and Intel is a customer)." CNBC toured ASML clean rooms in a very interesting video. IIRC, the only thing keeping ASML from exporting these machines to China is some EU/USA export control rule: https://www.youtube.com/watch?v=iSVHp6CAyQ8 https://www.youtube.com/watch?v=iSVHp6CAyQ8

mark_l_watson 4y ago

I am a Libertarian so this may seem like an odd comment: I support some government intervention to design and manufacture of at least low tech chips (adequate for laptops, tractors, industrial uses in general). I am not a hardware expert, but given that the Open RISC projects seem very worthy of support, both in design efforts and multiple inside the US fab facilities. TSMC’s new 5nm factory just opened 60 miles south of where I live in Arizona is also the kind of progress I want to see. I am a fan of globalization but we need to balance that with good “Plan B’s” for building what we really need inside the US.

lotsofpulp 4y ago
It is not odd to be Libertarian and support government intervention that benefits one’s self. Hypocritical, maybe, but a common sentiment.
- mark_l_watson 4y ago
  That is how I see it. I often drift into hypocrisy: I am 100% anti-war except if my country was directly attacked, but in the financial interests of me and my family, I do own “defense” stocks. Also in my own self interest: I am for our government massively supporting poor kids with meals at schools, special tutoring, etc. in order for us to have a larger and better educated work force in the future. Anyway sorry for the rant.
  - NikolaNovak 4y ago
    fwiw it didn't come through as a rant. Most of us if we are honest with ourselves have internal contradictions. It's important to be aware. My wife is fundamentally a socialist (we are in Canada so it's not a misunderstood bad scary word :-). But she is also a home depot manager, where she is the voice of capitalist market forces. What she wishes the system should be, and the system she is daily a part of, are frequently at odds. I personally find extremes of any given philosophy to be impractical and untenable. I respect more people who, like it appears yourself, say "this is my general leaning,and these are my pragmatical exceptions".

klelatti 4y ago

Great piece but it seems that Ben doesn't quite finish joining the dots. If Intel is to have a successful foundry business at the cutting edge then its customers will be those firms that are designing cutting edge CPUs, SoCs and GPUs. That means Apple & Qualcomm (possibly OK) but also Nvidia, AMD and other Arm based competitors with Intel's CPUs and GPUs. Can't see how this will work with Intel in its current form.

hyperation 4y ago
Perhaps a duopoly in domestic chip fabrication, with both Intel and TSMC operating fabs in the continental U.S.
- sanxiyn 4y ago
  I think klelatti is doubting whether AMD could trust Intel to pursue AMD's best interest.
  - klelatti 4y ago
    Absolutely! Handing over your detailed product specifications and product plans to a direct competitor is inconceivable. I’m 100% convinced now that an Intel split into foundry and CPU vendor is inevitable. It’s a political if not a commercial necessity if Intel is to provide a viable alternative to TSMC.
    - sanxiyn 4y ago
      Samsung manufactured for Apple for a long time. I don't think it's inconceivable.
      - klelatti 4y ago
        That’s a fair challenge. I think it’s a little different though - the SoC was one component of the iPhone - so full details of the competing product weren’t being shared. Plus when the relationship started volumes were small for both iPhone and Samsung phones. As we know Apple ended the relationship eventually. I struggle to see Lisa Su handing this info to Intel even with some strong safeguards.

throwaway4good 4y ago

Intel tried very hard to get Apple as a customer for the iPhone. They knew very well of mr. Christensen but they simply could not deliver hinting that Intel's problems are not that of strategy but at a lower more fundamental level of competence and ability to organise. (The stuff about RISC/CISC is a red herring - it basically doesn't matter on a modern cpu.) Here is an article about Intel and Christensen with clip of him from 2012 (or earlier) where he mentions his work with Intel. https://www.edgementoring.org/leadership-blog/clayten-christensen-taught-intel-ceo-what-to-think-not-how-to-think-and-why-thats-important https://www.edgementoring.org/leadership-blog/clayten-christ... Christensen Taught Intel CEO How To Think And Why It's Important

aidenn0 4y ago
I think Intel "tried very hard" from the point of view of a small company, but the fraction of Intel's resources put behind it was minuscule and felt very perfunctory. Right or wrong, they had zero interest in betting the future of the company on low-power chips for mobile, or any other market. [edit] I just read the wikipedia summary of the prescription for incumbents in The Innovator's Dillema and the one thing Intel was missing was: > They allow the disruption organization to utilize all of the company's resources when needed but are careful to make sure the processes and values were not those of the company. To a certain extent, it feels like buying a cloud offering from AWS vs. Google. Google might have a lot of resources dedicated in absolute terms to the cloud offering, but it feels like an afterthought that might go away at any moment. The AWS offering feels like a real product that Amazon plans on making money from. In both the cases of Intel and Google, I can't say which is true, but customers can only make their plans based on appearances, not reality.
- throwaway4good 4y ago
  The textbook solution is for the incumbent to spin off companies to deal with the disruptor. And one of the textbook examples is Intel.

alain94040 4y ago

I'm usually a big fan of stratechery, but for once I disagree with the explanation of Intel's decline. I think it's much simpler: being number one in fab technology is mostly driven by volume: whoever has the most volume wins. During the PC era, Intel had the most volume, so they also had the best fabs. It's a winner-take-all, self-reinforcing ecosystem. But in the last 10 years, mobile has had the highest volume. That's what allows TSMC to have the best fabs, and Intel is struggling. That's all there is to it. Nothing to do with services or software.

klelatti 4y ago
The CISC vs RISC point Ben makes is key here. Intel could have been a big player in mobile: it put too much focus on x86 though when it could have been making (its own or others) Arm based SoCs. Edit: not that Arm is necessarily RISC - but it certainly takes an approach that is different to x86 and better suited to mobile.
- marcosdumay 4y ago
  Intel tried to make Arm SoCs. But their customer management sucked, so in the end they only manufactured the SoCs that they designed, and didn't sell enough of them to be sustainable.
- caycep 4y ago
  Also perhaps there's a role where software/architecture just got better - they didn't have LLVM or other forms of code translation (if I'm phrasing that right) back then which seems to make the cpu architecture less of a critical issue.
- jjtheblunt 4y ago
  Intel was making its own ARM chips called Xscale 20 years ago, no?
  - klelatti 4y ago
    Indeed and XScale was successor to StrongARM which I think was highest performing Arm design for a while. Sold to Marvell in 2006 right before the iPhone appeared. Intel then spent billions trying to make x86 commercially viable on mobile.

throwaway4good 4y ago

Intel is in big trouble and the only card they have left is the nationalism card. And that card is for losers. We are about to enter a silicon slump with low demand and oversupply; for Intel things will get worse. What will happen when it is clear to everyone including politicians that all that subsidy money is going into a black hole? And people finally figure out that a rocket that blows up stuff doesn't need a 2nm chip? They are going to lose interest and those subsidies that is Intel's last hope will end.

dash2 4y ago
> Intel is in big trouble and the only card they have left is the nationalism card. And that card is for losers. No. It's 2022 not 2006. That card will win big, and deserves to.
groby_b 4y ago
"We are about to enter a silicon slump with low demand and oversupply" What causes you to assume that? "What will happen [if...] people finally figure out that a rocket that blows up stuff doesn't need a 2nm chip?" One, they'll learn that we're not doing too hot on custom chip fabs in general? They'll also, if they're really that dense, learn that we need chips for a few more things than to make things go boom. (FWIW, they're not that dense.) "They are going to lose interest and those subsidies that is Intel's last hope will end." Even if the rest of your statements were correct (and I don't think they are), that is absolutely not how subsidies work. Local subsidies translate to local jobs translate to votes. Keeping them running is rather important to politicians. So, no, "lose interest" is not exactly the most likely failure mode here.
- marcosdumay 4y ago
  > What causes you to assume that? Companies have been filling their stockpiling, and anticipating years of demand so they have a safety buffer for many months already. It's natural that this is followed by low demand. At the same time, the world seems to be entering a recession.
- est 4y ago

deleted 4y ago

[deleted]

kipchak 4y ago

>"the goal should be to counteract the fundamental forces pushing manufacturing to geopolitically risky regions, and Intel is the only real conduit available to do that." I wonder if it's fair to assume based on this the US gov will prop up intel as a foundry for as long as necessary, to secure it's own supply and reduce reliance on Taiwan/TSMC.

adamsvystun 4y ago

> The most important decision was shifting to extreme ultraviolet lithography at a time when Intel thought it was much too expensive and difficult to implement; TSMC, backed by Apple’s commitment to buy the best chips it could make, committed to EUV in 2014, and delivered the first EUV-derived chips in 2019 for the iPhone. Can somebody here correct me if I am wrong, but my impression was that Intel did commit early to EUV, with initial plans to start high volume manufacturing in line with other fabs (initial schedule was to introduce EUV in 2017 [1], it just got postponed many times), but they just failed in their execution. [1] https://wccftech.com/idf13-intel-ship-10nm-chips-2015-7nm-chips-2017/ https://wccftech.com/idf13-intel-ship-10nm-chips-2015-7nm-ch...

Throwawayaerlei 4y ago
I think your citation is 9 years old. What I've always heard is what they called 10 nm was non-EUV. You are correct that what they called 7 nm was going to use EUV, pretty much had to, but 10 nm catastrophically failed and the company responded very poorly to that. Not that long ago I remember reading, forget at what confidence level, that their old 7 mn was believed to have the potential to leapfrog their 10 nm and save the company, but others said they had some problematic things in common (not counting the very poorly run company!) that made that unlikely. In any event what was 7 nm did not ride to the company's rescue.
- adrian_b 4y ago
  Their 7 nm process has been renamed now as "Intel 4" and there is a presentation of it at Anandtech, which looks more credible than the fake presentations of the 10 nm process of some years ago. The first product using this process, Meteor Lake, is expected 1 year from now.
  - Throwawayaerlei 4y ago
    Meteor Lake/Intel 4 would then be six years late if the wccftech.com article's commentary on the two nodes was correct. Good to hear about the presentation material, thanks!

pphysch 4y ago

I wonder to what extent Washington's fuss over Taiwan is simply TSMC lobbying at work. They're an important company that is gonna get their lunch eaten by the mainland. But what can Washington even do about it? Beyond the "unsinkable aircraft carrier" angle, that is.

Throwawayaerlei 4y ago
"[TSMC is] an important company that is gonna get their lunch eaten by the mainland." How so? Not for the foreseeable future in bleeding and leading edge nodes, where the PRC is some unknown but very long distance away from making their own EUV machines. An invasion of Taiwan just means an end to TSMC production there, a point its chairman Mark Liu made a few days ago in a CNN interview. That would have really bad effects on the PRC's narrow economy with its export focus.
- tshadley 4y ago
  Very good points. Here's the link. https://transcripts.cnn.com/show/fzgps/date/2022-07-31/segment/01 https://transcripts.cnn.com/show/fzgps/date/2022-07-31/segme... LIU: Nobody can control TSMC by force. If you take a military force or invasion you will render TSMC's factory non-operable because this is such a sophisticated manufacturing facility. It depends on the real time [correlation] with the outside world, with Europe, with Japan, with the U.S., from materials to chemicals to spare parts to engineering software diagnosis. And it's everybody's effort to maybe this factory operable. So if you take it over by force you can no longer make it operable.
  - octoberfranklin 4y ago
    China doesn't need to take TSMC by force. All they need to do by force is install a puppet government in Taipei. No bombs will fall anywhere near TSMC's facilities. No tanks will go anywhere near their employee parking lots. Life will go on just like before. For a few years, at least. It'll be just like Hong Kong. No bloodshed there either.
- pphysch 4y ago

keepquestioning 4y ago

How would one profit off the next few years of political chipmaking?

throwaway4good 4y ago
Pork futures.
throwaway4good 4y ago
Chinese semiconductor companies. If this insanity continues (nationalism and sanctions), the massive Chinese market will end up being serviced only by Chinese chip companies. Some of these are investable via the Chinese or Hong Kong stock markets.

robocat 4y ago

AMDs spin-off of Global Foundries only gets mentioned once as an aside, yet surely there are multiple important reasons why that story is relevant to Intel.

mikewarot 4y ago

Chips are great, but you need discrete components, circuit boards, and other support, and the manufacturing infrastructure for all of that. Do we really have all of that in sufficient quantity domestically any more?

zbird 4y ago

> This is why Intel’s shift to being not simply an integrated device manufacturer but also a foundry is important: yes, it’s the right thing to do for Intel’s business, but it’s also good for the West if Intel can pull it off. It's good for the US, not "the West".

MauranKilom 4y ago
Intel is also building a new fab in Germany. So no, it's not just the US.
- zbird 4y ago
  The article is in the context of the US and the CHIPS Act, it doesn't even mention Europe. Or is the CHIPS Act also funding fabs in Europe? I'm not sure it does Europe good to make US-surveillance-ridden chips either.