4 ms·

Intel has $29B cash on hand. Their new fabs are being subsidized. Sure, American labor is more expensive than APAC, but I don't see that being a huge differen

Intel has $29B cash on hand. Their new fabs are being subsidized. Sure, American labor is more expensive than APAC, but I don't see that being a huge differentiator in such an automated manufacturing segment. My personal rabbit-hole conspiracy is that AI is driving a fire under the national security apparatus, and we're going to see a restriction on AI-chip technology being exported or manufactured overseas. Intel will be in prime position to onshore that manufacturing.

crowcroft 2y ago
$29b cash and about $50b in debt. They have a valid business still, but I think you're under appreciating how much of a hole they need to dig themselves out of. Their current foundries can't just make other chips, and they certainly can't make GPUs for AI (TSMC make Intel GPUs). They are making a new foundry in Ohio, but in Intel's current state and comments they've made to the market it's not guaranteed the foundry will be built. Intel might make it out of the hole, but it's going to get worse before it gets better. At their current trajectory their is not valid reason for the company to have 100,000 employees. I expect the recent layoffs are the first of a few.
- rstuart4133 2y ago
  > $29b cash and about $50b in debt. I know nothing about finance, but I have trouble figuring out how they got themselves into this situation given this https://www.intc.com/stock-info/dividends-and-buybacks https://www.intc.com/stock-info/dividends-and-buybacks : As of June 29th, 2024, we were authorized to repurchase up to $110.0 billion, of which $7.24 billion remain available. We have repurchased 5.77 billion shares at a cost of $152.05 billion since the program began in 1990. Had they not bought there own shares they would be sitting on $70B cash and no debt.
  - happycube 2y ago
    Ouuuuch. There oughta (still) be a law.
  - mnau 2y ago
    > I have trouble figuring out how they got themselves into this situation That's easy. This is the thinking process: By buying shared at that time, we increase the stock price and please Wall Street. I get a bonus. Not investing into R&D might cause some problems in the future, but we are Intel. We are #1. When there is a competition, we will just redirect money to R&D and zoom right past it. Plus I will likely be gone by that time anyway.
  - Panzer04 2y ago
    Because debt was cheap. Easy to keep it on balance sheet a few % rather than give it to shareholders. Remember, for the decade before this point INTC was throwing off 20B+ profits every year. They've had a couple of bad results recently, and everyone is ready to throw them off a cliff. People are, in general, very sensitive to the most recent news when it comes to stocks. They will extrapolate what happened over the last year out into the next decade and say X is dead or X is going to rule the world (Intel, Nvidia respectively).
    - lotsofpulp 2y ago
      How often do business reclaim the top spot? The pessimism is because Intel is behind by tens of billions of dollars, and more importantly, years. Many years. Effecting management change and developing the right workforce with the right expertise is not a given, even if they were previously earning $20B net income per year. One could easily say this is the business with the highest barriers to entry in the world (hence the highest profit margins and profits in the world).
      - crowcroft 2y ago
        Yea, Intel is more than 50 years old, they’re a mature player in decline. They look more like IBM than Apple.
  - crowcroft 2y ago
    Yea, and all that debt did was delay the pain that they are experiencing now, while putting the company in a far worse position to try fix itself.

crowcroft 2y ago

$29b cash and about $50b in debt. They have a valid business still, but I think you're under appreciating how much of a hole they need to dig themselves out of. Their current foundries can't just make other chips, and they certainly can't make GPUs for AI (TSMC make Intel GPUs). They are making a new foundry in Ohio, but in Intel's current state and comments they've made to the market it's not guaranteed the foundry will be built. Intel might make it out of the hole, but it's going to get worse before it gets better. At their current trajectory their is not valid reason for the company to have 100,000 employees. I expect the recent layoffs are the first of a few.

rstuart4133 2y ago
> $29b cash and about $50b in debt. I know nothing about finance, but I have trouble figuring out how they got themselves into this situation given this https://www.intc.com/stock-info/dividends-and-buybacks https://www.intc.com/stock-info/dividends-and-buybacks : As of June 29th, 2024, we were authorized to repurchase up to $110.0 billion, of which $7.24 billion remain available. We have repurchased 5.77 billion shares at a cost of $152.05 billion since the program began in 1990. Had they not bought there own shares they would be sitting on $70B cash and no debt.
- happycube 2y ago
  Ouuuuch. There oughta (still) be a law.
- mnau 2y ago
  > I have trouble figuring out how they got themselves into this situation That's easy. This is the thinking process: By buying shared at that time, we increase the stock price and please Wall Street. I get a bonus. Not investing into R&D might cause some problems in the future, but we are Intel. We are #1. When there is a competition, we will just redirect money to R&D and zoom right past it. Plus I will likely be gone by that time anyway.
- Panzer04 2y ago
  Because debt was cheap. Easy to keep it on balance sheet a few % rather than give it to shareholders. Remember, for the decade before this point INTC was throwing off 20B+ profits every year. They've had a couple of bad results recently, and everyone is ready to throw them off a cliff. People are, in general, very sensitive to the most recent news when it comes to stocks. They will extrapolate what happened over the last year out into the next decade and say X is dead or X is going to rule the world (Intel, Nvidia respectively).
  - lotsofpulp 2y ago
    How often do business reclaim the top spot? The pessimism is because Intel is behind by tens of billions of dollars, and more importantly, years. Many years. Effecting management change and developing the right workforce with the right expertise is not a given, even if they were previously earning $20B net income per year. One could easily say this is the business with the highest barriers to entry in the world (hence the highest profit margins and profits in the world).
    - crowcroft 2y ago
      Yea, Intel is more than 50 years old, they’re a mature player in decline. They look more like IBM than Apple.
- crowcroft 2y ago
  Yea, and all that debt did was delay the pain that they are experiencing now, while putting the company in a far worse position to try fix itself.