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They're throwing money away. Actually, I would be glad if this money was entirely used for research, because Intel and other US companies badly need it. But the

They're throwing money away. Actually, I would be glad if this money was entirely used for research, because Intel and other US companies badly need it. But they will waste it on plants that are already outdated in the best case scenario. The worst case scenario is Intel giving this money to investors directly or indirectly in the form of stock buy backs. And nothing of this would be necessary if Intel had invested their profits in research, instead of sending money to investors to keep the stock price high and, consequently, their executive compensation.

tbrownaw 2y ago
This isn't a "to big to fail" thing, it's a "we want you to do something, so we'll pay you to do it" thing.
porknubbins 2y ago
Intel had to agree not to buy back stock for 5 years when they accepted this money. They went from 50 to a low of around 20 during a huge bull run in semis too so whatever they are guilty of I don’t think they can be accused of “keeping the stock price high”. I believe they have smart people doing research but extremely poor incentives and siloing so no engineers can make any headway. I don’t think Gelsinger has gone hard enough in correcting this so maybe fresh leadership would help.
- hackernewds 2y ago
  And they'll run from 50 to 20 because they could barely me their obligations to cash in on this 100% margin-free government hand out to them
  - wbl 2y ago
    It's called bleeding edge for a reason. If execution was guaranteed it wouldn't be worth spending that money.
- coliveira 2y ago
  > Intel had to agree not to buy back stock for 5 years Sure, but have you heard of creative accounting? That's how they manage to move money from one place to another without breaking any contracts...
branko_d 2y ago
Intel invests ~4B per quarter on R&D. Source - Intel's income statement: https://www.intc.com/financial-info/income-statement https://www.intc.com/financial-info/income-statement So whatever their problems are, throwing more money at R&D is unlikely to solve them. Also, Intel has committed to not doing stock buybacks and has stopped the dividends completely. They may resume at some point, but it's unlikely to be soon.
- p1esk 2y ago
  They could try paying decent salaries, so people would actually want to work there.
  - discardedrefuse 2y ago
    They've opted to lay off 15,000 people instead. https://apnews.com/article/intel-chip-ai-job-cuts-layoffs-loss-e61781e9364b69af63481c34ca5dcd67 https://apnews.com/article/intel-chip-ai-job-cuts-layoffs-lo...
  - YetAnotherNick 2y ago
    Do they not pay decent salaries? Any source here?
    - yyuugg 2y ago
      150-200k for a mid career engineer, according to the internet, which does seem a little behind. It's a livable wage in Washington county, Oregon, so if the standard for decent salaries is "pays a livable wage", then it seems they do. But if decent implies more than just livable, then it's questionable.
      - eilefsen 2y ago
        Cost of living must be astronomical in the US for 200k to not be "more than liveable". If half your income was spent on rent that would be an insane 8,3k a month. and you would still have another 8.3k left. That left-over amount is more than twice what i earn, and i live fairly comfortably, alone, in the middle of Oslo.
ksec 2y ago
Intel doesn't have a problem with R&D at the moment. At least in terms of direction they are doing great. ( May be not GPU but that is another story ) And as others have said they cant buy back stock with this money grant. They need the money if they want to do foundry business competing against TSMC. And I would argue even $8B is too little. Latest Leading edge Giga Foundry in Taiwan is roughly $20B. You will probably need at least $30B in US. Very unfortunate Intel is still hanging on to its GPU unit which is burning money. I guess part of the AI hype meant Pat Gelsinger cant let that part go.
- spoaceman7777 2y ago
  Their consumer GPU segment def does look a bit shaky at the moment. The Arc gen 2 discrete GPUs will only compete current-gen to current-gen with mid tier Nvidia and AMD chips. However, gen 3 is on an accelerated release schedule, and will likely be arriving late next year (supposedly, with capabilities that will bring it closer to the top tier chips). I think where Intel really shows promise for GPUs and accelerators is in the price-point area. The Gaudi 3 accelerators that entered general availability two months ago manage to outdo Nvidia's hopper chips when comparing precision-to-precision, and retail for half as much. The overall success of that line really depends on whether work to overcome the lock in of CUDA will pan out sufficiently. Personally, I think it will, as AMD, Google, Amazon, and others are all making (and successfully rolling out) chips which depend on breaking the industry out of the walled garden of CUDA via direct integration with the most common higher level tools used by ML engineers. Given the availability bottleneck for Blackwell, there is a growing market for alternatives. And, again, half the price of Hopper chips, for better performance, for a product that's already on the market, is a pretty attractive proposition that will certainly see more orgs coming through the door. Might need to put one of these $14k 128GB intel hopper-peers in my workstation...
  - BeefWellington 2y ago
    Yeah I think Intel is a dark horse here in that AMD has kind of already stated they're pulling back from the extreme end of performance. If Intel's engineering work improves (and notably their driver staff do a good job) iteratively in short order as they've spoken about, I can see them capturing a good chunk of the GPU space and become the de facto discrete option on laptops. CUDA is definitely the biggest hurdle as you pointed out though. NVidia's bet there paid off big time.
wmf 2y ago
This seems too negative. Intel is building 18A ("2 nm") fabs that should be tied for the best in the world.
- eastbound 2y ago
  Isn’t it technically Intel buying from ASMR, Intel being more or less the hangar around those crowns of technology?
  - Iulioh 2y ago
    ASML* is the only company in the world who makes these machines. TSMC buys them from ASML and i still wonder why intel can't manage the same node, it's a thing i never understood. Anyway, no one is even close to doing what ASML is doing. Edit: From a rapid Google search seems line under 90nm there is only ASML. Canon and Nikon compete on older nodes.
  - high_na_euv 2y ago
    No, you cant just get machine from ASML and youre leader Semiconductors Engineering is modern equivalent of Rocket Science
spoaceman7777 2y ago
What do you mean by outdated? Companies are already designing chips for their 1.8nm process, in addition to Intel's mid-late 2025 chips switched back to Intel fabs, for 6 months from now. TSMC is still working on their 2nm process. The only players in that market are Samsung, TSMC, and Intel. It'd be crazy to let one of the three global EUV lithography manufacturers disappear because their R&D costs have lowered net revenue temporarily. People act like Intel has nothing to offer, when they're one of a low single-digits number of companies who are even capable of making modern microchips. Even China won't likely crack EUV for the next 5 years. Throwing all of the money on pure R&D would be madness. And the chips act is investing in a major R&D facility in upstate NY for next gen stuff anyway. Scrapping their last gen process to focus on 1.8nm was a long term play, and all signs point out to it working out well. Not to mention, it'll be nice to have at least this one US company making modern microchips, in case the many fabless US microchip companies ever need to switch to domestic production, due to economic or geopolitical reasons that are clearly on the short term horizon.
- Dalewyn 2y ago
  >and all signs point out to it working out well. Intel has always had great "signs" but fell completely apart once the time came for execution. Which is to say, I'll believe it when I see it. I say that as an Intel fanboi, too. If Trump/DOGE comes in and slashes Intel funding one way or another, even better.
  - FooBarBizBazz 2y ago
    I was about to write, "yeah, but Intel has good long-term-oriented leadership now in Pat Gelsinger, so while it'll take time, it'll eventually bounce back. Because, under him, it's finally been investing in R&D instead of coasting and doing stock buybacks." And then I Googled (to check the spelling of "Gelsinger"), and found this: https://www.cnbc.com/2024/12/02/intel-ceo-pat-gelsinger-is-out.html https://www.cnbc.com/2024/12/02/intel-ceo-pat-gelsinger-is-o... https://techcrunch.com/2024/12/02/intel-ceo-pat-gelsinger-retires/ https://techcrunch.com/2024/12/02/intel-ceo-pat-gelsinger-re... The man's retiring. Hm. Damn. So who are David Zinsner and Michelle Johnston Holthaus? They seem to be money and product people, not foundry people or architects? I'll need to look more closely, but to my mind this doesn't bode well for the long term. I see that the stock is up 5%, but I don't trust investors to think long-term enough. Investors are also happy when you Boeing the shit out of a company.
interludead 2y ago
But the goal of this program is to address a critical gap in domestic manufacturing capacity...
Yeul 2y ago
Who cares it's all just numbers on the infamous US national debt clock.
- lotsofpulp 2y ago
  Those numbers on the “debt clock” represent lost purchasing power for the numbers in your back account. I.e. a tax.
high_na_euv 2y ago
Outdated? They say they are on track to delivery 18A - leading node in next 7 months
- adrian_b 2y ago
  The problem is that if what they say were true it would be hard to believe that Gelsinger, the main supporter of 18A as the savior of the company, would have accepted to be retired before enjoying the success of his efforts. The forced retirement can be explained only in two ways, either the 18A is projected to be a failure and USA has lost any chances to become competitive with TSMC, or the retirement has been imposed by political forces that are completely incompetent and which do not understand anything about the semiconductor industry, and also in this case it seems likely that USA will fail to become great again in semiconductor IC manufacturing.
  - high_na_euv 2y ago
    It is business, the hard one. People aint gonna give you 2 3 quarters to enjoy stuff Once 18A is delivered the 5N4Y is completed
nimbius 2y ago
Much like with Boeing, they are out of options. the US has no other chipmaker but Intel. China has about half a dozen. the 8bn is more of a pointy stick at this stage to try and get your 56 year old failing chipmaker to do something besides profiteering (buybacks layoffs and mergers.) Its a wasted effort. short of nationalizing Intel, the US is going to lose a crown jewel of its technological advantage solely due to mismanagement.
- lupusreal 2y ago
  If China has half a dozen that count by whatever bar you're setting, then TI surely clears that bar.
- Workaccount2 2y ago
  China does not have a single cutting edge fab. The only players in the space globally are TSMC, Intel, and Samsung. The US has many fabs that are on par with Chinese fabs.
  - adrian_b 2y ago
    China does not have it because they are currently sabotaged by the US. Had they been allowed to buy from ASML and other leading manufacturers of manufacturing equipment, they would have had better chances to compete with TSMC than Intel. Even with the current sanctions, now when Gelsinger has been forcefully retired, which raises serious doubts about the viability of the Intel 18A CMOS process, which was the bet of Gelsinger for restoring the competitiveness of USA, this increases the chances for China to reach a point when they will have better semiconductor fabs than USA, which would not be good. The hope that nobody will be able to make photolithography equipment competitive with ASML is likely to be an illusion identical with the belief of Intel from 10 years ago that nobody can make CPUs competitive with theirs.
  - coliveira 2y ago
    While people believe this, SMIC is producing AI chips that are already competitive with NVDA. Considering that China is the top market for AI technology, the idea that SMIC is not competitive with other chip manufacturers will invalidate itself rather quickly.

tbrownaw 2y ago

This isn't a "to big to fail" thing, it's a "we want you to do something, so we'll pay you to do it" thing.

porknubbins 2y ago

Intel had to agree not to buy back stock for 5 years when they accepted this money. They went from 50 to a low of around 20 during a huge bull run in semis too so whatever they are guilty of I don’t think they can be accused of “keeping the stock price high”. I believe they have smart people doing research but extremely poor incentives and siloing so no engineers can make any headway. I don’t think Gelsinger has gone hard enough in correcting this so maybe fresh leadership would help.

hackernewds 2y ago
And they'll run from 50 to 20 because they could barely me their obligations to cash in on this 100% margin-free government hand out to them
- wbl 2y ago
  It's called bleeding edge for a reason. If execution was guaranteed it wouldn't be worth spending that money.
coliveira 2y ago
> Intel had to agree not to buy back stock for 5 years Sure, but have you heard of creative accounting? That's how they manage to move money from one place to another without breaking any contracts...

branko_d 2y ago

Intel invests ~4B per quarter on R&D. Source - Intel's income statement: https://www.intc.com/financial-info/income-statement https://www.intc.com/financial-info/income-statement So whatever their problems are, throwing more money at R&D is unlikely to solve them. Also, Intel has committed to not doing stock buybacks and has stopped the dividends completely. They may resume at some point, but it's unlikely to be soon.

p1esk 2y ago
They could try paying decent salaries, so people would actually want to work there.
- discardedrefuse 2y ago
  They've opted to lay off 15,000 people instead. https://apnews.com/article/intel-chip-ai-job-cuts-layoffs-loss-e61781e9364b69af63481c34ca5dcd67 https://apnews.com/article/intel-chip-ai-job-cuts-layoffs-lo...
- YetAnotherNick 2y ago
  Do they not pay decent salaries? Any source here?
  - yyuugg 2y ago
    150-200k for a mid career engineer, according to the internet, which does seem a little behind. It's a livable wage in Washington county, Oregon, so if the standard for decent salaries is "pays a livable wage", then it seems they do. But if decent implies more than just livable, then it's questionable.
    - eilefsen 2y ago
      Cost of living must be astronomical in the US for 200k to not be "more than liveable". If half your income was spent on rent that would be an insane 8,3k a month. and you would still have another 8.3k left. That left-over amount is more than twice what i earn, and i live fairly comfortably, alone, in the middle of Oslo.

ksec 2y ago

Intel doesn't have a problem with R&D at the moment. At least in terms of direction they are doing great. ( May be not GPU but that is another story ) And as others have said they cant buy back stock with this money grant. They need the money if they want to do foundry business competing against TSMC. And I would argue even $8B is too little. Latest Leading edge Giga Foundry in Taiwan is roughly $20B. You will probably need at least $30B in US. Very unfortunate Intel is still hanging on to its GPU unit which is burning money. I guess part of the AI hype meant Pat Gelsinger cant let that part go.

spoaceman7777 2y ago
Their consumer GPU segment def does look a bit shaky at the moment. The Arc gen 2 discrete GPUs will only compete current-gen to current-gen with mid tier Nvidia and AMD chips. However, gen 3 is on an accelerated release schedule, and will likely be arriving late next year (supposedly, with capabilities that will bring it closer to the top tier chips). I think where Intel really shows promise for GPUs and accelerators is in the price-point area. The Gaudi 3 accelerators that entered general availability two months ago manage to outdo Nvidia's hopper chips when comparing precision-to-precision, and retail for half as much. The overall success of that line really depends on whether work to overcome the lock in of CUDA will pan out sufficiently. Personally, I think it will, as AMD, Google, Amazon, and others are all making (and successfully rolling out) chips which depend on breaking the industry out of the walled garden of CUDA via direct integration with the most common higher level tools used by ML engineers. Given the availability bottleneck for Blackwell, there is a growing market for alternatives. And, again, half the price of Hopper chips, for better performance, for a product that's already on the market, is a pretty attractive proposition that will certainly see more orgs coming through the door. Might need to put one of these $14k 128GB intel hopper-peers in my workstation...
- BeefWellington 2y ago
  Yeah I think Intel is a dark horse here in that AMD has kind of already stated they're pulling back from the extreme end of performance. If Intel's engineering work improves (and notably their driver staff do a good job) iteratively in short order as they've spoken about, I can see them capturing a good chunk of the GPU space and become the de facto discrete option on laptops. CUDA is definitely the biggest hurdle as you pointed out though. NVidia's bet there paid off big time.

wmf 2y ago

This seems too negative. Intel is building 18A ("2 nm") fabs that should be tied for the best in the world.

eastbound 2y ago
Isn’t it technically Intel buying from ASMR, Intel being more or less the hangar around those crowns of technology?
- Iulioh 2y ago
  ASML* is the only company in the world who makes these machines. TSMC buys them from ASML and i still wonder why intel can't manage the same node, it's a thing i never understood. Anyway, no one is even close to doing what ASML is doing. Edit: From a rapid Google search seems line under 90nm there is only ASML. Canon and Nikon compete on older nodes.
- high_na_euv 2y ago
  No, you cant just get machine from ASML and youre leader Semiconductors Engineering is modern equivalent of Rocket Science

spoaceman7777 2y ago

What do you mean by outdated? Companies are already designing chips for their 1.8nm process, in addition to Intel's mid-late 2025 chips switched back to Intel fabs, for 6 months from now. TSMC is still working on their 2nm process. The only players in that market are Samsung, TSMC, and Intel. It'd be crazy to let one of the three global EUV lithography manufacturers disappear because their R&D costs have lowered net revenue temporarily. People act like Intel has nothing to offer, when they're one of a low single-digits number of companies who are even capable of making modern microchips. Even China won't likely crack EUV for the next 5 years. Throwing all of the money on pure R&D would be madness. And the chips act is investing in a major R&D facility in upstate NY for next gen stuff anyway. Scrapping their last gen process to focus on 1.8nm was a long term play, and all signs point out to it working out well. Not to mention, it'll be nice to have at least this one US company making modern microchips, in case the many fabless US microchip companies ever need to switch to domestic production, due to economic or geopolitical reasons that are clearly on the short term horizon.

Dalewyn 2y ago
>and all signs point out to it working out well. Intel has always had great "signs" but fell completely apart once the time came for execution. Which is to say, I'll believe it when I see it. I say that as an Intel fanboi, too. If Trump/DOGE comes in and slashes Intel funding one way or another, even better.
- FooBarBizBazz 2y ago
  I was about to write, "yeah, but Intel has good long-term-oriented leadership now in Pat Gelsinger, so while it'll take time, it'll eventually bounce back. Because, under him, it's finally been investing in R&D instead of coasting and doing stock buybacks." And then I Googled (to check the spelling of "Gelsinger"), and found this: https://www.cnbc.com/2024/12/02/intel-ceo-pat-gelsinger-is-out.html https://www.cnbc.com/2024/12/02/intel-ceo-pat-gelsinger-is-o... https://techcrunch.com/2024/12/02/intel-ceo-pat-gelsinger-retires/ https://techcrunch.com/2024/12/02/intel-ceo-pat-gelsinger-re... The man's retiring. Hm. Damn. So who are David Zinsner and Michelle Johnston Holthaus? They seem to be money and product people, not foundry people or architects? I'll need to look more closely, but to my mind this doesn't bode well for the long term. I see that the stock is up 5%, but I don't trust investors to think long-term enough. Investors are also happy when you Boeing the shit out of a company.

interludead 2y ago

But the goal of this program is to address a critical gap in domestic manufacturing capacity...

Yeul 2y ago

Who cares it's all just numbers on the infamous US national debt clock.

lotsofpulp 2y ago
Those numbers on the “debt clock” represent lost purchasing power for the numbers in your back account. I.e. a tax.

high_na_euv 2y ago

Outdated? They say they are on track to delivery 18A - leading node in next 7 months

adrian_b 2y ago
The problem is that if what they say were true it would be hard to believe that Gelsinger, the main supporter of 18A as the savior of the company, would have accepted to be retired before enjoying the success of his efforts. The forced retirement can be explained only in two ways, either the 18A is projected to be a failure and USA has lost any chances to become competitive with TSMC, or the retirement has been imposed by political forces that are completely incompetent and which do not understand anything about the semiconductor industry, and also in this case it seems likely that USA will fail to become great again in semiconductor IC manufacturing.
- high_na_euv 2y ago
  It is business, the hard one. People aint gonna give you 2 3 quarters to enjoy stuff Once 18A is delivered the 5N4Y is completed

nimbius 2y ago

Much like with Boeing, they are out of options. the US has no other chipmaker but Intel. China has about half a dozen. the 8bn is more of a pointy stick at this stage to try and get your 56 year old failing chipmaker to do something besides profiteering (buybacks layoffs and mergers.) Its a wasted effort. short of nationalizing Intel, the US is going to lose a crown jewel of its technological advantage solely due to mismanagement.

lupusreal 2y ago
If China has half a dozen that count by whatever bar you're setting, then TI surely clears that bar.
Workaccount2 2y ago
China does not have a single cutting edge fab. The only players in the space globally are TSMC, Intel, and Samsung. The US has many fabs that are on par with Chinese fabs.
- adrian_b 2y ago
  China does not have it because they are currently sabotaged by the US. Had they been allowed to buy from ASML and other leading manufacturers of manufacturing equipment, they would have had better chances to compete with TSMC than Intel. Even with the current sanctions, now when Gelsinger has been forcefully retired, which raises serious doubts about the viability of the Intel 18A CMOS process, which was the bet of Gelsinger for restoring the competitiveness of USA, this increases the chances for China to reach a point when they will have better semiconductor fabs than USA, which would not be good. The hope that nobody will be able to make photolithography equipment competitive with ASML is likely to be an illusion identical with the belief of Intel from 10 years ago that nobody can make CPUs competitive with theirs.
- coliveira 2y ago
  While people believe this, SMIC is producing AI chips that are already competitive with NVDA. Considering that China is the top market for AI technology, the idea that SMIC is not competitive with other chip manufacturers will invalidate itself rather quickly.