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Intel to Receive $8.5B in Grants to Build Chip Plants
- hiddencost 3y agohttps://archive.is/XkIJs https://archive.is/XkIJs
- OJFord 3y agoGrants?! Isn't that massively anti-competitive/entrenching a monopoly? I would've expected it to be at least disguised as a tax break or something. ('No tax on US-manufactured chips' or whatever.)
- rapsey 3y agoIntel has a monopoly?
- hx8 3y agoDue to the licensing agreements Intel and AMD have a duopoly on all modern x86 chips.
- rapsey 3y agoWho cares? You can buy performant arm64 laptops and servers. HPC is GPUs.
- sofixa 3y ago> You can buy performant arm64 laptops and servers From? Apple doesn't count due to the extremely narrow usability of their software and the complexity of using other software on their hardware.
- hx8 3y agoNot all software is compatible with arm64. Specifically I would be worried about attempting to run Windows applications not compiled for arm64, for which there are many. The compatibility layer Windows ships comes at a significant performance impact.
- hx8 3y agoA strong percentage of Intel's current sales are vendor lockin from the historical "Wintel" age (windows + intel). This is a moat Apple finally crossed after great effort, and Windows has made a few attempts to cross. If chips were sold purely on hardware specs and not software lockin then Intel would have much fewer sales. The US giving grants, tax credits, and cheap loans to Intel only serves to extend the lifespan of a company whose compeitive edge is failing.
- nahnahno 3y agoGiven that their parts have been, up until the past 5 years, clearly better than AMDs (and any other chip manufacturer), and in the last 5 merely competitive, that’s quite the statement. Nevermind that with Gaudi, they also have the only viable AI accelerator besides Nvidia and AMD.
- EraYaN 3y agoThese grants are for a completely different side of the business. The fab side, and that side is strategically significant for the US government so it makes sense they put some money in. The rest of the world is doing the exact same as well.
- Shrezzing 3y agoThey're getting $5.5bn in tax breaks, and loans for $11bn on generous terms too. Their total support package from the CHIPS money is $25bn. Intel are putting in $75bn, taking the total project to $100bn.
- bluSCALE4 3y agoAbsolutely. This is why Intel is basically nationalized and no different than an American Huawei.
- chomp 3y agoSo when can we expect 8.5 billion in stock buybacks?
- supertrope 3y agohttps://web.archive.org/web/20220812015804/https://semianalysis.com/intel-cuts-fab-buildout-by-4b-to-pay-billions-in-dividends-first-net-loss-in-over-30-years-cutting-fab-buildouts-but-committed-to-growing-the-dividend/ https://web.archive.org/web/20220812015804/https://semianaly...
- barryrandall 3y agoNovember 6, 2024.
- a_wild_dandan 3y agoHelp me understand.
- sambull 3y agoAfter the next general election. Optics
- testhest 3y agoI thought fabs require massive amounts of water to function, isn't AZ a pretty dry state?
- alephnerd 3y agoWater is reused. Wafers have purity requirements so you'd be stupid to not recycle and re-purify the water used.
- lizknope 3y agoThese are from Intel's site so of course it is going to be pro Intel but they reuse the water. https://www.intel.com/content/www/us/en/newsroom/article/intel-arizona-site-honored-for-water-stewardship.html#gs.649nr5 https://www.intel.com/content/www/us/en/newsroom/article/int... https://www.intel.com/content/www/us/en/environment/water-restoration-arizona.html https://www.intel.com/content/www/us/en/environment/water-re...
- fakeslimshady5 3y ago[dead]
- ejb999 3y agoI just don't get it - the country has over $34 Trillion in debt already and we are handing out money to mega-rich corporations who don't need the money (among other things we waste money on). This is not going to end well - our kids and grand kids will be paying for it.
- transcriptase 3y agoThey would be paying far more if chips suddenly stopped coming out of Taiwan in the future and the U.S. had no onshore capacity to make their own. It’s more of an insurance policy than a subsidy. Intel needs a reason to build in the U.S., and grants tip the ROI scale on their side to make it happen.
- HEmanZ 3y agoIMO this is a big enough national security threat that what intel is doing is similar to if Lockheed said “we’re going to start selling to Russia instead of the US unless the US gives us nice grants”. It shouldn’t even be an option for Intel to continue manufacturing in other countries. It should be “move manufacturing back to the US or the Fed will take ownership of the whole company and do it for you.” (And maybe it’s sort of an unspoken assumption that if they don’t take this carrot, then the US really would use the stick to force their manufacturing back into the US).
- aylmao 3y agoAn expropriation of this kind and magnitude by the US government would be historic. Has it happened before? I'm curious. I know there's talk about TikTok either selling to a USA owner or leaving, which seems pretty monumental too. Not quite an expropriation since the state wouldn't be taking control of it, but somewhat similar.
- aylmao 3y ago> Intel needs a reason to build in the U.S. I mean, if Intel is only motivated to build in the USA when it gets a fat check rather than out of conviction, I think that's a problem too, no? Does this mean that whenever maximizing (short-term) shareholder value is at odds with national sovereignty the USA will have to hand them out a check? I don't know that this is what's going on here, perhaps Intel really is committed to the USA beyond the individual gain of its executives and shareholders. It's worth noting though, there's some prominent examples in US history where this hasn't been the case. Banks for example got really rich at the USA's expense in the years leading to 2008.
- light_hue_1 3y agoIn the past 15 years Intel has spent almost $100 billion on stock buybacks. They don't need the money. This is a pure transfer of wealth from taxpayers to the rich. And they're getting more like $20 billion not once you include loans, etc. The wealthy make massive amounts of money, take it out for themselves, and then complain that they don't have capital. That's pure junk. And then we wonder why Biden's approval ratings are terrible and why we might end up with Trump again. We need to make stock buybacks illegal again. They provide no value to everyone but the ultra wealthy. Edit: Wow, the downvotes are amazing. A company gives away $100 billion then comes hat and in had to taxpayers asking for another $20 billion and we just hand it out. And I'm getting downvoted?
- ejb999 3y agoI don't care if companies buy back stock - but if they can afford to buy back stock, they don't need or deserve my tax money to operate.
- consumer451 3y ago> In the past 15 years Intel has spent almost $100 billion on stock buybacks. This is the main reason that I dislike stock buy backs, they reduce R&D investment. If you want to give your investors a prize, pay a dividend. Otherwise, invest in your company!
- kaibee 3y agoStock-buy backs are basically just dividends with a better tax treatment.
- consumer451 3y agoThere is also the benefit to any exec whose compensation is related to a rising stock price, right?
- s1artibartfast 3y agoThat depends on the comp structure. Usually comp structures look at multiple metrics that owners want to see. Owners prefer stock price to dividends, so they reward it more.
- sidcool 3y ago[flagged]
- YetAnotherNick 3y ago~70% of US budget goes in health, welfare, eduction and social security. US is not anti socialist by any stretch.
- Rinzler89 3y agoAnd defense
- YetAnotherNick 3y agoThe number is excluding defence.
- teleforce 3y agoPrevious post on the news and apparently the CHIPS funds are not limited to Intel [1]. [1] US to inject billions of fab CHIPS cash subsidies to Intel, Samsung and TSMC: https://news.ycombinator.com/item?id=39729979 https://news.ycombinator.com/item?id=39729979
- redleader55 3y agoIt's unlikely at this stage it's possible to bootstrap a company that makes CPUs, GPUs, etc, so it seems to me the US government wants to hedge their bets and keep Intel alive for now. $25B in total is a small price to pay for that. That being said, I would've preferred it's not Intel that gets the life-line.
- Workaccount2 3y agoIntel is the only domestic candidate. Global foundries stepped back from high end semi production about a decade ago, leaving only Intel. And besides Intel, there are only two other companies on Earth; TSMC and Samsung.
- cma 3y agoAnd all rely on ASML, though some of their EUV stuff was in part tech transfer from a US government collab that included Intel (EUV LLC), and that's why we have still have some security veto over selling EUV machines to China.
- scarface_74 3y agoThe thing is that it’s not leading edge chips that are the most important for most consumer goods like cars and random other products. It’s the trailing edge chips that companies like TSMC is manufacturing on fully depreciated equipment. While it makes no sense financially for a new company to buy equipment to build trailing edge chips, it’s perfectly logical for TSMC just to keep old fans running
- nickpsecurity 3y agoThey could force them to license the production to one to three other companies who kick back a percentage of the profits to Intel. That makes two to four suppliers who receive the $25 billion. Then, we have competing firms. If they think that’s unfair, they can quit asking for our tax dollars to expand their for-profit businesses.
- jdblair 3y ago
- bluSCALE4 3y agoGlad to see so many people pissed off. Nothing will change but it's good to see so much information and callouts of corporate welfare.
- m3kw9 3y agoWhy pissed off? Intel is the one with experience and the US is desperate de-risking TSMC and control more of the chip as chips is one of the most important resources now and in future. Would they give it to Y-combinator startups? If Yes they would be a fraction of it, Intel earned this by being American and being the cornerstone of American Chip business for past few decades
- throwaway4good 3y agoYes. I too miss when wintel ruled the day … the music was better too.
- _ea1k 3y agoI don't think anybody thinks we are going back to that. But right now, CUDA rules the day in AI. It'd be nice to have a few strong competitors in that space.
- bluSCALE4 3y agoI'm opposed to it here as I am to it happening in China. Except that I felt Huawei phones were superior to everything else I had used from an OS perspective (They made lots of optimizations). I don't Intel as a company in good standing; they've committed personnel, product and corporate fouls. I'd rather see 20 million go to that kid that made his own CPU. I have faith he'd do more to better humanity than Intel.
- unyttigfjelltol 3y agoThe US is spinning $1T new public debt every 100 days and there's no credible path to return to a sustainable trajectory. Plus, the poster child for federal corporate welfare-- Boeing-- has not done so well with that largesse, Intel is a rather sad candidate to carry that torch forward.[1] [1] https://www.nytimes.com/2020/09/04/opinion/pefco-export-import-bank.html https://www.nytimes.com/2020/09/04/opinion/pefco-export-impo...
- thedangler 3y agoI bet my life that Nancy Pelosi did some trades based on this grant. Bought way in the money calls or purchased shares... I guess we will find out in 45 days....
- kortilla 3y agoThis doesn’t move the needle for intel, their stock price is barely up as of an hour after market open.
- ChrisArchitect 3y ago[dupe] Some more discussion: https://news.ycombinator.com/item?id=39764821 https://news.ycombinator.com/item?id=39764821
- derelicta 3y agoCan't you guys just nationalize Intel instead of giving your hard earned money to oligarchs?
- callalex 3y agoThat would make it much harder for all this money to be pilfered away through stock buybacks, which is the real goal here.
- s1artibartfast 3y agoWhich oligarchs own Intel?
- derelicta 3y agoWestern ones. They are the worst.
- dclowd9901 3y agoI'm sure Intel will be very happy to bolster their cash savings with this investment. Or have we already forgotten about that broadband investment from way back?
- nahnahno 3y agoThe money afaik has to be used for actual manufacturing activities.
- redleggedfrog 3y agoJust wait for the "Coke, Steak, and Strippers" addendum. The C-levels need that for when they go party with Boeing. Intel made ~55 billion last year. Maybe they don't really need corporate welfare.
- IncreasePosts 3y agoIt's more of an inducement to get the company to do what they might not do on their own. Intel doesn't need the CHIPS act, America does, and America is paying Intel to make it happen.
- jimbob45 3y agoThis just sounds like how we got into our current mess with Boeing.
- x0x0 3y agoYou're not wrong, but having an incredibly important dependence on an industry 100 miles off the coast of China (and the target of their increasingly erratic dictator) is worth paying billions to break.
- jimbob45 3y agoThis short-termism seems like it's been America's chief problem through the centuries. "We need slavery - our economy will fall apart without it!" "We need Standard Oil and US Steel - splitting them apart would be a catastrophe!" "We need universal healthcare - a public option would place undue burden on insurance companies!" "We need Boeing - our foreign competitors would eat us up otherwise!" At some point, it's time to admit that the long-term pain is not worth the short-term benefits we get from naive economic policies.
- ldjkfkdsjnv 3y ago[flagged]
- zitterbewegung 3y agoThat’s not the point of the chips act it’s to nearshore fabs.
- cowpig 3y agoI think the parent is implying that the government would be better-off subsidizing the startup space or something else, rather than propping up a large incumbent that is failing.
- deleted 3y ago[deleted]
- rgrieselhuber 3y agoI had heard that this had been killed. Is it back on?
- 34679 3y agoI feel sorry for any startups looking to innovate in this space. It's hard enough competing against established players without them getting billions in free money. Intel has had the resources to build out fabs in the US for decades. Instead, they've chosen to build elsewhere, and now they're rewarded for it? They recently announced their $20b facility in Ohio is being "put on hold": https://www.tweaktown.com/news/96969/intel-delays-launch-of-ohio-fab-plant-from-2025-now-expected-somewhere-in-2027-2028/index.html https://www.tweaktown.com/news/96969/intel-delays-launch-of-... While at nearly the same time announcing a $25b facility in Israel: https://www.cnn.com/2023/12/26/tech/intel-israel-investment/index.html https://www.cnn.com/2023/12/26/tech/intel-israel-investment/...
- deleted 3y ago[deleted]
- zitterbewegung 3y agoIsrael investment might have gone through due to their research department in the same country. Also, they got a grant from the govt in Israel.
- bhhaskin 3y agoThis isn't really a startup kinda business. It costs something like $10b to build a new fab.
- uptownfunk 3y agoIsn’t that what they said about rockets?
- bhhaskin 3y agoThe big difference there is SpaceX was able to incrementally build up. Falcon 1, Falcon 9, Falcon heavy, Starship. Each step allowed them to prove that it worked and gain investors and government contracts. Who in their right mind would invest $10b just to build the manufacturing capability without having a well established product? And if you have a well established product are you still a startup?
- snapcaster 3y agoI understand why Intel is getting these, but would be nice to see this money go to companies that are still innovating and are somewhere in the US coalition/orbit (TSMC, Samsung, etc.)
- gchokov 3y agoSamsung? Really?
- resource_waste 3y agoSamsung? I wonder if this is coming from a position of ignorance... Samsung is among the companies of the world that might be producing negative externalities that weigh more than their positive contributions
- tines 3y agoI am totally ignorant, can you explain more about Samsung's negative externalities?
- snapcaster 3y agoYeah will fully cop to being ignorant on this, can you expand your comment?
- minhazm 3y agoSamsung is expected to get $6 billion. https://www.bloomberg.com/news/articles/2024-03-15/samsung-poised-to-win-over-6-billion-for-expanded-us-investment?embedded-checkout=true https://www.bloomberg.com/news/articles/2024-03-15/samsung-p...
- icyfox 3y agoRight now one of the biggest blockers in on-shoring semiconductor fab at any kind of reasonable price-point and timescale is the lack of a skilled workforce. This legislation has dual objectives: train new people to get into sophisticated manufacturing AND to build out the actual infrastructure itself. That almost guarantees it won't be the most efficient way to actually get these chips on American soil. Whether we look back in 20 years and think "wow glad we took that hit upfront" is anyone's guess.
- resource_waste 3y agoOr we are going to be training Junior engineers with outdated skill sets and build outdated infrastructure. Sometimes top down planning works, but I think I would personally need to trust the leadership and the incentives. Unfortunately incentives on these are typically to do bare-minimum so you can meet the criteria to get subsidies. Sure the chips will be usable, but you spent a multiplier of the cost it takes to get it, and the chips aren't cutting edge. I'd a bit more interested in some moonshot idealism than just some military buildup.
- lupusreal 3y agoTop down planning is the only way projects requiring massive capital investment get done. There's no such thing as grassroots fabs.
- resource_waste 3y agoThe top down planning could be profit driven rather than defense driven.
- lupusreal 3y agoDefense consideration generally require defense driven planning.
- autoexecbat 3y agoIt really doesn't matter if it's a bit out-dated, you cant create senior engineers without them being junior. All seniors trained on currently 'old' methods by definition of time passing
- foreverobama 3y ago[dead]
- Leary 3y agoWhat's the most advanced node Intel is producing in the US right now in mass production?
- neogodless 3y agohttps://siliconangle.com/2023/09/29/intel-begins-mass-producing-chips-using-cutting-edge-euv-technology/ https://siliconangle.com/2023/09/29/intel-begins-mass-produc... I believe "Intel 4" is their current most advanced mass-produced process.
- Leary 3y agoThanks for the response. The article only mentions Ireland though, has Intel done the same in the US?
- neogodless 3y agohttps://www.techpowerup.com/319704/intel-10a-1-nm-class-node-to-enter-mass-production-in-2027 https://www.techpowerup.com/319704/intel-10a-1-nm-class-node... They have some level of production as advanced as what they call Intel 20A. But it's a very small percent - can it be considered mass production?
- beefman 3y agoIf Intel got $8.5B how come the stock didn't go up? https://finance.yahoo.com/quote/INTC/ https://finance.yahoo.com/quote/INTC/
- kqr2 3y agoThat government money was probably already factored into the stock price.
- doctoboggan 3y agoBecause everyone was expecting this to happen when the CHIPS act passed.
- DSingularity 3y agoIt’s been priced in. Many indications that this was coming.
- Salgat 3y agoA combination of the stock price already having that expectation built in along with CHIPS intentionally funding domestic overcapacity that has its own maintenance overhead. Chip demand is cyclical, which is why chip fabs aren't built to handle peak demand; it would be too expensive for the times when they aren't running at full production.
- hshsh667 3y agoThese (and probably all) are growth stocks. They have no relationships to the real world anymore unfortunately.
- jjtheblunt 3y agoThey didn't get the money. Reading the article, the first sentence explains this is just a proposal...but even the commerce.gov headline is misleadingly worded (to your point).
- no_wizard 3y agoWouldn't GlobalFoundries (HQ in New York and supposedly on the "Trusted Foundry" list) have made more sense, since they fabricate chips for multiple different companies, where as Intel only makes them for Intel? Boosts a competitor, opens up fab capacity for all and moves the needle on the intentions behind the CHIPS act, all at once.
- pavon 3y agoGlobalFoudaries is receiving $1.5B from the CHIPS act. While it might have made sense to try to help them catch up to the competition a decade ago, today we just want to have any domestic capability comparable to TSMC in case China decides to invade Taiwan. Intel and TSMC will be able to get there much more quickly than GlobalFoundaries can. Furthermore, Intel is opening up their Fab to outside customers.
- solumunus 3y agoI’ve not been keeping up with the news but certainly within the last few months it’s been said they’re also getting money.
- dotnet00 3y agoIntel has also been opening up their fabs to other customers in the past few months.
- Symmetry 3y agoNVidia is actually doing a trial run of a non-critical product at Intel right now, and I'm guessing could possibly do more if it works out well.
- netrap 3y agoI think Intel wants to make chips for others as well...
- Aromasin 3y agoGlobalFoundries are nowhere near the leading edge on node process, and Intel have opened up their foundries to customers since Pat's return with the advent of IFS: https://www.intel.com/content/www/us/en/foundry/overview.html https://www.intel.com/content/www/us/en/foundry/overview.htm...
- randerson 3y agoIntel could have funded this themselves many times over if they'd reinvested their profits instead of paying huge buybacks and dividends.
- lenerdenator 3y agoThe goal of a corporation is to generate value for shareholders, and we don't give any incentives for them to do otherwise.
- gamepsys 3y agoCorporations should only return cash to investors (via dividend or stock buyback) if they do not have a high yield way to invest the money internally. A large stock buyback is the corporation admitting they do not have good uses for the cash. If Intel would take these grants, tax credits, and low interest loans and turn around and increase their dividend or do a large stock buyback then this would be a simple wealth transfer from the US to Intel stock owners. Even without this cash flow, these large grants feels like this unfairly benefits Intel shareholders at the expense of US Tax payers. Intel's last stock buyback was in Q1 2021, which was $2.4B. There were $14B in buybacks in 2020 [0]. [0] https://www.intc.com/stock-info/dividends-and-buybacks https://www.intc.com/stock-info/dividends-and-buybacks
- s1artibartfast 3y agoI'm not sure if this was your intent, but it sounds like you're describing the world as it actually works. Companies execute stock BuyBacks when they don't have better internal Investments, and that's a good thing! Intel doesn't care about more us-based Fabs, nor are they high yield. This is why the US government has to pay them if the US government wants those things to exist.
- gamepsys 3y ago> I'm not sure if this was your intent, but it sounds like you're describing the world as it actually works. This was in fact my intent. I would just like to highlight there are alternative ways besides grants to encourage Intel to open US based manufacturing. Ultimately it's the tax payer that is funding this grant, so it's important they feel like they are getting a good deal. I think it's also telling that Intel didn't invest the $8.5B themselves when they clearly had the cash just a few years ago.
- verisimi 3y agoWe should give Intel 50bn of taxes, nevermind the roads, schools or anything else! And give Google and Facebook some bns too! And Tesla could always do with more, why not? PS why not through a few bns at public housing too to preserve mixed society, like Paris? Mixed society is surely worth it... It's only money! And it won't spend itself! https://news.ycombinator.com/item?id=39765692 https://news.ycombinator.com/item?id=39765692
- ThinkBeat 3y agoToo big to fail coming the rounds again? Intel failed to keep up with competition due to some really bad decisions and incompetence. Now they are bailed out by the Biden administration with a giant state subsidy. I think this falls under protectionism. which might cause problems with the WTO. I would guess the administration will or already have filed it under "National security" or something similar. Where does this money come from? Has it been fully funded by congress? (hopefully)
- singhrac 3y agoI think actually the problem with this program is not the recipient (I mean, Intel is literally the only American company building fabs in the US) but the structure. The problem with US fans is that the skilled Taiwanese workforce is simply willing to work for less and more flexibly. We could easily solve that problem if we were willing to do what China is doing, which is paying Taiwanese PhDs, engineers, and technicians to come to the US. Give them a streamlined visa and green card process, and pay them a cash bonus to emigrate. I mean, this is America’s core strength - we have strong Taiwanese communities they could integrate into, a social structure that is ultimately much more positive on immigrants than most places in the world, and incredibly high salaries. A lot of people talk about training a US workforce, and I totally agree we should embrace that. But there are limits, and ultimately as a country we should encourage skilled immigration whenever and however we can. After all they’ll train locals eventually, even if by proximity.
- eitally 3y ago100% this.
- ericd 3y agoAbsolutely, we should be trying extremely hard to skim the cream of the rest of the world. That's historically been one of our greatest strengths/abilities.
- maerF0x0 3y ago> Taiwanese PhDs, engineers, and technicians to come to the US Isn't this already present in H1B and other Skilled / extraordinary persons programs?
- FpUser 3y agoFrom the position of high value employee making good living: If I get a green card I will move. If I get a visa that ties me to employer and I am at the constant threat of being kicked out then fuck it.
- FpUser 3y agoI bet that the minute the US rolls up red carpet to Taiwan's hi tech experts will be the minute Taiwan will fight it either soft way (increase the salaries) or the hard way (introduce the laws preventing them from leaving the country). Should Taiwan loose leading position their value and security guarantees will all go down the toilet.
- FredPret 3y agoWe're living through the silicon age and Intel has made a total dog's breakfast of it. Stagnant revenues, falling profits. Both should have been growing geometrically. Just compare these companies: https://valustox.com/INTC https://valustox.com/INTC https://valustox.com/AMD https://valustox.com/AMD https://valustox.com/AVGO https://valustox.com/AVGO https://valustox.com/AMAT https://valustox.com/AMAT Even Qualcomm has seen good growth: https://valustox.com/QCOM https://valustox.com/QCOM This is how it's done: https://valustox.com/NVDA https://valustox.com/NVDA EDIT these guys aren't primarily chipmakers, but they're deriving at least a couple of $Bn per year from making good ones: https://valustox.com/AAPL https://valustox.com/AAPL
- hardware2win 3y agoNo shock that profits are failing when they are investing heavily
- FredPret 3y agoI'm not an accountant but they should be able to capitalize expenses incurred when it's an investment, ie, since it's not really a normal expense profit should not be affected. I'm not sure how that works with R&D engineering salaries - that might impact their profits even if it's an investment. I feel like a large technology company should spend a large but consistent amount of money on R&D - I don't like wild swings either way.
- maerF0x0 3y agoAlso not an accountant, but i believe you two are talking differently about gaap and nongaap profit. The latter can immediately write of R&D, where as GAAP has rules around deprecation of investments.
- pkulak 3y agoWell, you can chase short term profit and send your designs off to TSMC, or you can own your own foundry. This is exactly why it's in the interest of the US government to ensure that Intel doesn't totally abandon US manufacturing just like AMD did years ago.
- __lbracket__ 3y agonah, semiconductor design, fab and research would still pay like shit. Go back to building your CRUD apps.
- rhelz 3y agoWRT to lack of a skilled workforce, here is an interesting anecdote. I remember back in the late 90's, Intel had to fire most line workers in their FABS, and hire people with Ph.D.'s in solid-state physics. I actually knew one of these people who were fired: She was our housecleaner. And--like the supper-smart garbage man of the Dilbert Cartoons, she was very smart. Smarter than me. I know because she helped me solve some problems I couldn't solve on my own. Why was she cleaning houses? Tragic story. No doubt she could have gotten a Ph.D., but she was older, had some health problems which wouldn't let her work 60-80 hours a week. And she was black, perhaps discrimination was a factor too. I'd hate to even think of how smart you have to be to work in FABs today, but let me tell you, not even $8.5 billion is going to create more of these people. Best you can hope for is you can pay them enough to get them to work for you.
- up2isomorphism 3y agoMaybe too much money is exactly the problem? I rarely see people tackling hard problem for money, because it is not an efficient way of making money.
- Esras 3y agoToo much money in what context? It can be an extremely effective motivator for solving a business problem - hire smart people to work on it, they'll happily go work for double their pay.
- adolph 3y agoA baby can't be made in one month just because you had the money to hire 9 surrogates. Many processes do not scale just because a money spigot turned on. What most often does scale as quickly as monetary availability is fraud, waste and abuse.
- MichaelZuo 3y agoThere are thousands of items on the agenda in the present day, everything from better open source LLMs to moon-base railway designs, so even if 99% of these turn out to be duds that can’t be budged, there are still sufficiently many remaining to absorb all bonafide super-geniuses on Earth several times over.
- ancorevard 3y ago[flagged]
- jjtheblunt 3y agoTitle on commerce.gov isn't quite what the first sentence says, which is they announced a _proposal_, not a done deal. U.S. Department of Commerce Proposes up to $8.5 Billion in Potential Direct Funding for Intel Under President Biden’s Investing in America Agenda to Support Multiple Projects in Arizona, New Mexico, Ohio, and Oregon
- exabrial 3y agoOh good, another bunch of board members can now afford their yacht club memberships for 2024. These handouts need to stop.
- lenerdenator 3y agoThe alternative is to be dependent on the rest of the world for chips. The market decided that the most efficient transaction is to offshore all of this infrastructure to geopolitically-compromised areas and pray that China never does what every other emerging power in the history of geopolitics has done. The market chose wrong.
- aylmao 3y ago> pray that China never does what every other emerging power in the history of geopolitics has done. I am curious what you mean by this precisely. What other emerging powers have done what?
- lenerdenator 3y agoThey throw their weight around to influence geopolitics. EDIT: There really does seem to have been this mindset in the 80s and 90s regarding China that they were going to liberalize once we shipped them a bunch of our industry and IP. You can only really believe that would happen if two things are true: 1) You have a woeful misunderstanding of Chinese politics 2) You think that the West, and the US in particular, have some sort of magic that will invariably keep us ahead of the Chinese. Maybe it was racism, maybe it was underestimating the power of collectivism, but there were people who really saw China as nothing more than a workforce that would happily do whatever Western companies wanted them to do, while providing absolutely no competition, forever and ever.
- mortify 3y agoThe market chose what it could based on the conditions that exist. Make is easier to people to open new businesses and expand existing ones, and people will do so. Creating hostile environments and then choosing who gets free money to overcome those difficulties is not much of a market.
- ChrisArchitect 3y agoMore discussion: https://news.ycombinator.com/item?id=39764821 https://news.ycombinator.com/item?id=39764821
- WhereIsTheTruth 3y agoCapitalism 101, get tax payer money to fund your big projects!
- TradingPlaces 3y agoNow all they have to do is compete with TSM, which is widely known to be a very simple thing.
- maerF0x0 3y ago> The Biden administration, equipped with $39 billion in subsidies to distribute, IMO this is the major problem in American politics (maybe world too)- That we have the government picking and choosing winners before the game is even played. IMO we should be rewarding the winners in a after a fair game with rules tailored to what we want to incentivize. Eg: A per chip, per TFLOP or other intelligent metric reward AFTER the item is produced and sold on the free market. IMO The government should not be financing or changing the capital structure of any corporation, instead investors should take the risk and use financial structures available to chase the rewards.
- thunkshift1 3y ago> “fair game” : are you certain tsmc has not received handouts from their government
- maerF0x0 3y agoI'm not. But what I'm referring to here is the goal of having American produced chips. If TMSC wants to produce in America, and a foreign government wants to foot the bill, then what would be the issue?
- tester756 3y agoThis was happening all the time in semiconductor industry consider reading Chip War
- roody15 3y agoOften politics and fine print gets in the way. It’s hard to find qualified talented people to build and run a fab Now imagine all the DEI requirements that are added into this grant. If it is really a national security issue to get onshore fans here in the US they really need to drop all the social equity attachments.
- Gerlo 3y agoMy employer spent hundreds of millions of dollars on Intel hardware for a major system, and it still hasn't seen the light of day due to complete incompetence on Intel's part. I look forward to seeing how they mismanage this money.
- andy_ppp 3y agoI said this about China trying to make chip investments but it applies to the US too. It’s extremely difficult for government to pick who should be winners with investments like this, and then the question of what is next, x-ray lithography, photonics or something else. I suppose this is quite far into the future and a moot point as the AGI will have moved the humans into a simulation by then to avoid any problems with them.
- aylmao 3y agoI'm a foreigner native to one of the many nations where American influence led to the sale of sate enterprises, free trade, market liberalization, and overall loss of local companies to the hands of USA firms It's wild to see the same thing happen to the USA now, and to see their government be the ones handing out taxpayer money and caring about national sovereignty over liberalization and "market efficiency".
- cmrdporcupine 3y agoIt's been happening for decades in other industries. Especially automotive. Same (worse) here in Canada. To me it's a sign of a sector in decline.
- dietmtnview 3y agoAs a US citizen, it's pretty wild to live through. Socialism for the rich, rugged individualism for the rest of us.
- Nifty3929 3y agoUnfortunately no, it's socialism for us too - just the wrong end of it. The government and their friends are the socialism winners, the rest of us are the socialism losers. But we do it to ourselves at the ballot box every time, and very reliably.
- yard2010 3y agoI don't know what the heck you are talking about. Socialism is not the kind of bs like capitalism or communism, it has no winners nor losers everyone is in the same boat. Anything else is just some crooked politicians, could be billionaires but don't have to, getting more rich and powerful and say whatever they have to say to keep it this way.
- s1artibartfast 3y agoI don't see how socialism is any different. It is still the state taking from one person to give to another. How is anyone in the same boat with Socialism? Unless your metaphor is that some paddle and some don't, but everyone goes the same speed
- faktory 3y agoThis is such a horrible approach to succeeding and will not do anything good for anyone. Those factories will be mostly automated and so the idea that they will come with lots of jobs is misguided. On top of that to the extent this is a good idea the private market have no problem finding the money for that themselves. The real issue is in the actual materials i.e. rare earth etc which is where the government completely dropped the ball the last 20 years. 8.5B going to the mining industry would make sense not to Intel.
- Nifty3929 3y ago$8.5 in corporate welfare, out of a total of $39B that "Biden has to spend." - That's about $100 per person in the US. How about just give us each $100 instead, and we can vote with those Dollars for what we want? Maybe we'd rather invest it in food, clothes, shelter, transportation, etc.
- tgma 3y agoI suppose at least the theory is $100/person invested in chips will collectively benefit us more as we will not lose the strategic advantage in chipmaking. Surgical planned economy to cover the gaps in market economy and tragedy of the commons situations.
- amateuring 3y agoplanned economies only enrich the planners
- tgma 3y agoStrictly speaking that is manifestly false (the "only" part). At the very least, in practice they usually enable a bunch of unnatural markets/behaviors (usually falling under "corruption") that enrich many ancillary parties in addition to the planners, even if they don't enrich the general population (last I checked the west was filled with plenty of Marxist-adjacents who make arguments of such sort, so I suppose it it is not a given for everyone). To be clear, I am not advocating for the grant per se; just describing a theory the other side might be operating under.
- xyst 3y agoSomething about giving a multibillion dollar company government grants rubs me the wrong way. Most of the money probably goes into hiring useless consulting firms to “do the leg work”.
- JonChesterfield 3y agoNah, this is intel. They'll spend it on a dividend.
- dheera 3y agoDividends don't make you any money because the rest of the passive-aggressive investors downvote the stock price by exactly the dividend amount when dividends are given. If everyone agreed to maintain the stock price when dividends were issued, the dividends would be useful.
- orangecat 3y agothe rest of the passive-aggressive investors downvote the stock price by exactly the dividend amount when dividends are given This is the expected result if markets are correctly pricing stocks. The value of a company is its assets plus its future income streams. When a company pays a dividend, its cash assets decrease, so the value of its stock should decrease by that same amount.
- s1artibartfast 3y agoI don't know what to make of all these strange objections to completely normal and rational business processes. People describe them as if they are somehow a bad thing. The only thing your description is missing is that while the total market cap goes down, the individual share price should go up because the number of outstanding shares is smaller. This is how the company transfers value to the shareholder that has not sold their stock.
- dheera 3y agoBut that way dividends are useless though. I'd much rather dividends be issued on random dates to random shareholders so that the market cannot predict when they happen, just a bunch of random people anonymously get dividends deposited each time, and as long as you stay invested for a long time you get dividends at the same average rate as everyone else.
- alexnewman 3y agoCall me hopeful and sceptical that you can do this in the USA. The employees are just ganna flip jobs
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- stalfosknight 3y agoIt's frustrating that Intel is being given truckloads of taxpayer money after spending decades falling behind their competitors due to arrogance and complacency.
- huytersd 3y agoI hope these have stringent, result based conditions applied to them.
- elihu 3y agoThere's one condition in particular that I think should absolutely be part of this: a requirement that Intel offers foundry services on an ongoing basis and giving equivalent access and prices to foundry customers as they give to their own internal customers. Foundry services are a small part of Intel's business currently, but in the event TSMC is disrupted then Intel would have a near-monopoly on high-end chip manufacturing. Whether Intel is obligated to work with Nvidia, Apple, AMD, etc... could make the difference between those companies surviving or not. It's in the interests of the American public that money ostensibly spent to mitigate the economic and technological fallout of something potentially happening to TSMC is actually effective at mitigating that risk in a sensible way, or if it's just a huge handout to Intel that they can happily use to dig a deeper moat around their business.
- deleted 3y ago[deleted]
- alex_young 3y agohttp://web.archive.org/web/20240320153008/https://www.nytimes.com/2024/03/20/us/politics/chips-act-grant-intel.html http://web.archive.org/web/20240320153008/https://www.nytime...
- pbiggar 3y agoMeanwhile, BDS just announced a boycott of Intel > “Ethical responsibility and international law aside, by insisting on investing tens of billions of dollars in Israel, a ‘war zone,’ only miles away from occupied Gaza, Intel is putting its leaders’ fanatic ideological commitment to Israel over financial and fiduciary responsibility. Why else would Intel freeze plans to expand its chipmaking manufacturing in Ohio while throwing those billions into Israel, a state committing genocide? https://bdsmovement.net/Press-Release-BDS-Launches-Boycott-Intel-Global-Campaign https://bdsmovement.net/Press-Release-BDS-Launches-Boycott-I...
- machinekob 3y agolol who cares about that? they can boycott like 95% of US big corporations cause all of them do business in Isreal
- osigurdson 3y agoI guess the trick is to convince governments that your industry is vital for national security.
- BobbyTables2 3y agoI think HPE spent about this much for Autonomy! Just imagine if they had invested in domestic semiconductor manufacturing instead of a shady analytics company!!!
- whatshisface 3y agoDoes the government get shares as a result of this, or is this investment a gift? Are they really just handing money to a giant corporation?
- SmellTheGlove 3y agoSo Intel will be buying back $8.5B of its own stock starting when?
- ufocia 3y agoI've noticed a trend of pay-walled articles lately on HN. Nothing wrong with journalists being paid, but I'm beginning to think that they are self-promoting rather than bubbling up organically.
- deleted 3y ago[deleted]
- synergy20 3y agoWe spent trillions on the war not so long ago, who knows how many billions just spent in Europe, and hundreds of billions on various programs that do not really produce anything, so when I saw numbers like $8.5B from the government these days it's like nothing to me, why is this even a headline? I just can not make sense of it myself anymore.
- perryizgr8 3y agoWhy does Intel need grants to invest into expanding their own business? They have more than enough cash. Just a way to waste taxpayer dollars IMO.
- nojvek 3y agoI liked that US govt approved the Chips ACT, but I'm skeptic whether that will actually meaningfully change the manufacturing ability in-house. The problem with US corporations is they are run by MBA management who are experts in stock price manipulation instead of manufacturing and engineering. So you could spend 100s of Billions and they don't materialize into much. We see the same troubles at Boeing. US has over-optimized for finance shenanigans at the cost of hard engineering. SpaceX is perhaps something that truly stands out in terms of radical engineering mindset. If the same funding was applied to NASA they wouldn't have achieved a 10th of what SpaceX did. Some corporations are just very inefficient. Intel being one of them. I am for public funds being invested into companies only if they meet certain milestones, and new funding is only done if previous milestones are met. Otherwise it goes from tax payers to some exec's pocket.
- sargun 3y agoI think that this will be a good case study in the future of whether or not you can de-MBA an organization. I can’t remember too many cases of organizations fixing themselves in this context. Microsoft is the largest example I can think of.
- oglop 3y agoCool. So, where you getting that labor you smothered out for shareholder value all those years ago? I both hate this but support this. I hate it because no one will learn their lesson and Chicago economics will go on being a theory from autists imposed on the rest of us with constant “externality” costs. Supportive because any fool not indoctrinated into the Chicago school could have seen what happens on a long enough timeline in such a fragile situation and this technology will make or break a nation in the current zeitgeist.
- 0xedd 3y ago[flagged]
- typon 3y agoGood to see capitalism and the free market are alive and well in the US.