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I’d really rather we didn’t bail out these companies at all. It clearly creates moral hazard and makes it hard for better run companies to enter markets.
by ch4s3 1y ago
I’d really rather we didn’t bail out these companies at all. It clearly creates moral hazard and makes it hard for better run companies to enter markets.
- JustExAWS 1y agoChip manufacturing is too important for the US. We can’t be completely dependent on Taiwan. Nothing against Taiwan, it’s one attack away from being obliterated by China. No company is going to come out of someone’s garage and build a chip fab.
- charliea0 1y agoWe can definitely offer subsidies for manufacturing in the US - we've already gotten TSMC to open several fabs.
- scarface_74 1y agoAnd it’s still owned by a foreign country and Taiwan is restricting TSMC from manufacturing their most advanced processors from being manufactured in the US. https://www.tomshardware.com/tech-industry/semiconductors/taiwans-government-strengthens-silicon-shield-restricts-exports-of-tsmcs-most-advanced-process-technologies https://www.tomshardware.com/tech-industry/semiconductors/ta...
- gizajob 1y agoSame as the US is restricting sale of Nvidia chips to China.
- 8note 1y agothis is not to say that intel will be manufacturing competitive chips to what TSMC is. are you worried that china will invade taiwan, and then somehow taiwan will still be around to prevent the US fabs from making the best chips? its a bit far fetched
- raw_anon_1111 1y agoIf Intel isn’t manufacturing chips, what US manufacturer comes close? You can’t just build a close to leading edge manufacturing facility in a month
- Citizen8396 1y agoit's not like the technology to produce these chips are a drop-in replacement the threat Taiwan faces is existential, and one of the only things that the US has at stake are these chips
- re-thc 1y ago> We can definitely offer subsidies for manufacturing in the US The very subsidies Intel now has to pay with shares for? How is that a subsidy? Companies now and in the future would be very concerned before taking any US subsidies because the terms can always change after the fact.
- thayne 1y agoSo we give a bunch of money to a company with a history of mismanagement and out sourcing chip manufacturing?
- zombiwoof 1y ago[dead]
- andrewflnr 1y ago"Someone's garage" is a straw man. There must be people here who could, with adequate funding, build a smallish but viable chip manufacturing company.
- scarface_74 1y agoThere is no such thing as a “smallish” chip manufacturer that can manufacture leading edge chips. It’s about scale. If it were that easy, Apple, Amazon, Google AMD, Nvidia, etc who all design their own chips would have done it.
- alfiedotwtf 1y agoFlip side: why would Apple, Amazon, Google, AMD, NVIDIA etc build their own when they can outsource it cheaper? Companies are run to make a profit… they don’t care about sovereignty as long as the money is coming in.
- x2tyfi 1y agoBecause it’s extremely lucrative and strategically valuable to the US
- alfiedotwtf 1y ago… but the shareholders are global?! That’s not really a compelling argument unless you made it a requirement that all major/strategic companies must have 100% domestic ownership! BUT - all you then need to do is create a Delaware LLC that buys the strategic stock, which is owned by $SCARY_FOREIGNERS
- SJC_Hacker 1y ago> Because it’s extremely lucrative It could be extremely lucrative if they get it right. Simply trying to copy TSMC would also be a poor strategy. Companies have "core competencies" (or should). The manufacture (not design) of high-end silicon has never been one for any of these companies except Intel, and they have just lost big time. > strategically valuable to the US Yeah, they don't care.
- gizajob 1y agoNvidia has a market cap of 4.5 trillion dollars and everyone is committing hundreds of billions to AI CapEx in their direction - they can afford to organise chip fabs if it really came to it. Ok TSMC and ASML would need to be on board but it could be done. Should be done in fact because even a simple SWOT analysis would show the risk to their business.
- viraptor 1y agoIf Taiwan becomes practically inaccessible, is there any way another country can setup a competing fab (for the latest generation of chip sizes) without years of R&D? As far as I understand, the practical knowledge of how to do it doesn't exist right now. (Neither does the prerequisite tooling)
- gizajob 1y agoGiven there’s fabs doing essentially the same thing elsewhere then yes. Getting down to 3nm and the technology and secrets that involves would take a while though. TSMC can’t do it either without xUV lithography machines made by ASML in the Netherlands. Furthermore there isn’t anything magical about about the current generation of chips that couldn’t be replicated at at a scale of 12 or 15 or 20 nanometers - it’s just that scaling down to that small allows for a greater density of transistors per wafer and thus increased power efficiency. An AI supercomputer could be built with chips with bigger transistors than 3nm it would just run hotter. And investing in intel aside, one of Nvidias great competitive moats is CUDA and that’s software not hardware.
- viraptor 1y agoI meant specifically for a given small size. Sure larger ones can be and are produced elsewhere. But how many years behind is everyone else if they can't get any help at all from the current companies.
- pfannkuchen 1y agoAren’t the actual machines used in the fabs still made in Germany?
- TacticalCoder 1y ago[dead]
- freeopinion 1y agoNobody is going to swoop in and buy a distressed company that owns a bunch of fabs then turn it around if that company keeps getting bailed out.
- pfannkuchen 1y agoRight it would make a lot more sense to let this happen and then restrict that the buyers be American (or European, I guess).
- xyst 1y agoWhy is this so hard for people to understand? Intel for years had a massive lead in the market. Instead of investing in the business the clevel suite instead opted for idiotic stock buybacks. The only good news is that C-level suite can continue to do the same shit over and over again.
- bcrosby95 1y agoIf shareholders are losing ownership it's less a pure bailout and more a strategic investment and/or takeover. It also potentially lets the average taxpayer benefit rather than just those its directly propping up.
- Obscurity4340 1y agoHow does the average taxpayer ever actually end up benefitting point blank?
- whoisburbansky 1y agoProfits from the stake lower taxes that would otherwise be levied on you? Of course that’s moot if the deficit isn’t something being taken seriously.
- steveBK123 1y agoDeficits aren't real and 10% of $0 when they likely go bankrupt is $0
- bko 1y agoNot that I agree with bail-outs, but 2008 financial crisis that resulted in a number of bail outs actually netted the treasury a profit. > In total, U.S. government economic bailouts related to the 2008 financial crisis had federal outflows (expenditures, loans, and investments) of $633.6 billion and inflows (funds returned to the Treasury as interest, dividends, fees, or stock warrant repurchases) of $754.8 billion, for a net profit of $121 billion https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program
- gizajob 1y agoI don’t think that really counts if there has to be a giant campaign of quantitive easing by printing dollars alongside.
- bongodongobob 1y agoWell as much as you don't like it, companies this big failing is terrible for the economy and in this case, national security to a degree. I'm of the thinking that when your company gets to a certain size we'd be well off nationalizing. Apple has more money than some nation states. Something that huge has the potential to affect global politics. There's lots of other reasons too, but this isn't like letting the corner store fail. The repercussions are huge. If we're going to bail out, the people should own some of it.
- philistine 1y agoAs a non-American, a big part of the appeal of American companies was their independence from the American government. Was.
- UncleOxidant 1y ago> Apple has more money than some nation states. And Apple needs their chips fabbed, so why not have Apple invest $50B into Intel? Nvidia could afford to chip in too. These companies that face a huge amount of geopolitical risk because they've put all of their eggs in the TSMC basket should have to pay for this not US taxpayers.
- bongodongobob 1y agoI'd rather the citizens control the companies than the other way around.
- fach 1y agoBranding nationalizing companies as “citizens control” is quite the spin. Chinese citizens surely own the means of production, right?
- bongodongobob 1y agoNationalizing a company isn't communism and isn't intended to resemble it.
- user____name 1y agoI see two objections to this: The collateral damage to the surrounding economy (well ran companies might be dependent on Intel) and the loss of strategically important institutions and knowledge, especially in markets with a high barrier to entry. So I think bailing out can be justified, even if it is a clear moral hazard. The better solution I think is to prevent markets from becoming too oligopolistic and firms from becoming too big to fail. But this would require a government who isn't afraid of taking anti-trust measures to maintain market competition, but the US has been moving away from that model for decades.
- tw04 1y agoWhile that argument makes sense from a purely philosophical perspective, it doesn’t hold water in the reality of this situation. Nobody is entering the chip making business and growing to a size and scale to compete with Intel in 2025. If they collapse tomorrow there aren’t going to be startups filling in the gaps, there’s just going to be massive shortages of chips and chaos.
- woleium 1y agoYou are saying that if intel went under, Musk or some other wouldn’t buy the assets and have a go?
- tw04 1y ago...no? Did you see me say nobody would buy the assets in a scenario where Intel was actually going bankrupt? I said if by some magic Intel ceased to exist tomorrow, there wouldn't be some startup just filling the gap. So the idea that government investment in Intel somehow prevents a startup competitor is just nonsense. To compete with Intel would require trillions in investment and probably a decade+ of time to build the requisite organization and talent. The government investment to prevent the catastrophe that would result in them declaring bankruptcy and the subsequent breakup of their assets has no bearing on whether or not a startup could replace them.
- itsmorelike 1y agoIt's more like, large inefficient company covering 10% of the market shuts down, all other companies grow 10% on average.
- bmitc 1y agoHow is that not even worse?
- deleted 1y ago[deleted]
- SergeAx 1y agoIntel is the number one chip contractor for the US military. There's no scenario today where the US government allows Intel to go down.