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I 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 mo

by 34679 3y ago

I 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 ago
Israel 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 ago
This isn't really a startup kinda business. It costs something like $10b to build a new fab.
- uptownfunk 3y ago
  Isn’t that what they said about rockets?
  - bhhaskin 3y ago
    The 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?
  - qaq 3y ago
    The equipment to manufacture rockets costs many orders of magnitude less than equipment for a FAB. It also does not get obsolete quickly.
  - p1esk 3y ago
    Musk should have spent 44B on a chip company.
  - dotnet00 3y ago
    Rockets turned out to be expensive not because the technology demanded it, but because the companies were intentionally inefficient, e.g. it was actually fine to build a rocket in a tent with simple tools than to setup a massive clean room facility. This was fine because the government would hand them a blank check with a guaranteed profit percentage, and the handful of commercial customers would just swallow the cost. However, it isn't as clear if the same applies to semiconductors, since even a bit of dust is indeed a serious problem for producing a chip where the transistors are much smaller than most dust. Until very recently there were no blank checks, every improvement required mostly private investment, so it's less likely that the inefficiencies are intentional.
- mrd3v0 3y ago
  Any industry wouldn't be "really a startup kinda business" if only a few players are pumped more than everyone else combined by orders of magnitude. Having to scale to everyone's demand is a lot more costly than if the market was fragmented.
  - Aloisius 3y ago
    It's not just scale. Even Intel's development fabs cost billions to build. The equipment and facilities required for cutting edge fabs are very expensive.
- 34679 3y ago
  That's where the innovation comes in.
lupusreal 3y ago
> Intel has had the resources to build out fabs in the US for decades. Instead, they've chosen to build elsewhere Almost all of Intel's fabs are in America.
deleted 3y ago
[deleted]
xil3 3y ago
It's called payoffs. Not much we can do when the system is corrupt. I don't think we'll ever have a perfect system, unfortunately. Just makes it that much harder for startups.
Goronmon 3y ago
I 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. Which startups would be harmed by this type of investment? as a relatively casual observer, I didn't think there was much in way of startups that were looking to go head-to-head with a company like Intel or AMD in chip fabrication.
no_wizard 3y ago
>They recently announced their $20b facility in Ohio is being "put on hold" I have a friend who lives in Ohio who was very excited about this, and I told him not to hold his breathe, its likely they will do everything they can to get subsidies to pay for it, rather than pay for the majority of it out of their own pocket and re-coup some via subsidy, therefore I suspect they will delay opening until they get more subsidies. It looks like I was right, unfortunately
Salgat 3y ago
CHIPS isn't a handout; it's the only way to get them to build these expensive fabs domestically in a way that makes economic sense.
- aylmao 3y ago
  As much as I agree, and I really do, this is also a company that mentions they have $7.24 billion available for sock buybacks [1]. Sure, maybe they don't actually make any buybacks. This is what's left from $110.0 billion they approved for stock buybacks in the past, not a quantity that's been approved or seemingly needs to be used this year. They haven't bought back any stock since 2021 [1]. One just wishes they'd invested in fab-building earlier. They've spent $152.05 billion in buybacks since 1990 [1], a fab apparently costs anywhere from $3-20 billion [2]. That's say ~10 potential fabs that instead became just checks for investors. [1]: https://www.intc.com/stock-info/dividends-and-buybacks https://www.intc.com/stock-info/dividends-and-buybacks [2]: https://en.wikipedia.org/wiki/Semiconductor_fabrication_plant https://en.wikipedia.org/wiki/Semiconductor_fabrication_plan...
pbiggar 3y ago
Imagine announcing you're going to build a plant in Israel in the middle of Israel committing a genocide of the Palestinians in Gaza. Evil company https://bdsmovement.net/Press-Release-BDS-Launches-Boycott-Intel-Global-Campaign https://bdsmovement.net/Press-Release-BDS-Launches-Boycott-I...
- Qem 3y ago
  apartheid aboard is the new intel inside. They will need updated stickers.

by 34679 3y ago

deleted 3y ago

[deleted]

zitterbewegung 3y ago

Israel 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 ago

This isn't really a startup kinda business. It costs something like $10b to build a new fab.

uptownfunk 3y ago
Isn’t that what they said about rockets?
- bhhaskin 3y ago
  The 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?
- qaq 3y ago
  The equipment to manufacture rockets costs many orders of magnitude less than equipment for a FAB. It also does not get obsolete quickly.
- p1esk 3y ago
  Musk should have spent 44B on a chip company.
- dotnet00 3y ago
  Rockets turned out to be expensive not because the technology demanded it, but because the companies were intentionally inefficient, e.g. it was actually fine to build a rocket in a tent with simple tools than to setup a massive clean room facility. This was fine because the government would hand them a blank check with a guaranteed profit percentage, and the handful of commercial customers would just swallow the cost. However, it isn't as clear if the same applies to semiconductors, since even a bit of dust is indeed a serious problem for producing a chip where the transistors are much smaller than most dust. Until very recently there were no blank checks, every improvement required mostly private investment, so it's less likely that the inefficiencies are intentional.
mrd3v0 3y ago
Any industry wouldn't be "really a startup kinda business" if only a few players are pumped more than everyone else combined by orders of magnitude. Having to scale to everyone's demand is a lot more costly than if the market was fragmented.
- Aloisius 3y ago
  It's not just scale. Even Intel's development fabs cost billions to build. The equipment and facilities required for cutting edge fabs are very expensive.
34679 3y ago
That's where the innovation comes in.

lupusreal 3y ago

> Intel has had the resources to build out fabs in the US for decades. Instead, they've chosen to build elsewhere Almost all of Intel's fabs are in America.

deleted 3y ago

[deleted]

xil3 3y ago

It's called payoffs. Not much we can do when the system is corrupt. I don't think we'll ever have a perfect system, unfortunately. Just makes it that much harder for startups.

Goronmon 3y ago

I 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. Which startups would be harmed by this type of investment? as a relatively casual observer, I didn't think there was much in way of startups that were looking to go head-to-head with a company like Intel or AMD in chip fabrication.

no_wizard 3y ago

>They recently announced their $20b facility in Ohio is being "put on hold" I have a friend who lives in Ohio who was very excited about this, and I told him not to hold his breathe, its likely they will do everything they can to get subsidies to pay for it, rather than pay for the majority of it out of their own pocket and re-coup some via subsidy, therefore I suspect they will delay opening until they get more subsidies. It looks like I was right, unfortunately

Salgat 3y ago

CHIPS isn't a handout; it's the only way to get them to build these expensive fabs domestically in a way that makes economic sense.

aylmao 3y ago
As much as I agree, and I really do, this is also a company that mentions they have $7.24 billion available for sock buybacks [1]. Sure, maybe they don't actually make any buybacks. This is what's left from $110.0 billion they approved for stock buybacks in the past, not a quantity that's been approved or seemingly needs to be used this year. They haven't bought back any stock since 2021 [1]. One just wishes they'd invested in fab-building earlier. They've spent $152.05 billion in buybacks since 1990 [1], a fab apparently costs anywhere from $3-20 billion [2]. That's say ~10 potential fabs that instead became just checks for investors. [1]: https://www.intc.com/stock-info/dividends-and-buybacks https://www.intc.com/stock-info/dividends-and-buybacks [2]: https://en.wikipedia.org/wiki/Semiconductor_fabrication_plant https://en.wikipedia.org/wiki/Semiconductor_fabrication_plan...

pbiggar 3y ago

Imagine announcing you're going to build a plant in Israel in the middle of Israel committing a genocide of the Palestinians in Gaza. Evil company https://bdsmovement.net/Press-Release-BDS-Launches-Boycott-Intel-Global-Campaign https://bdsmovement.net/Press-Release-BDS-Launches-Boycott-I...

Qem 3y ago
apartheid aboard is the new intel inside. They will need updated stickers.