11 ms·

Uncle Sam shouldn't own Intel stock

335 points by aspenmayer 1y ago

aspenmayer 1y ago
https://www.wsj.com/opinion/uncle-sam-shouldnt-own-intel-stock-ccd6986d?st=5YqsGK&reflink=desktopwebshare_permalink https://www.wsj.com/opinion/uncle-sam-shouldnt-own-intel-sto...
- aspenmayer 1y ago
  neonate's archive link doesn't include the actual article, just the lede. I don't know why I can't reply to them, but I suspect it's because their post is pinned by mods, but it doesn't work properly for that purpose, so this may help: https://pastebin.com/raw/vL07QfVi https://pastebin.com/raw/vL07QfVi
  - aspenmayer 1y ago
    neonate’s link has been updated since this post, so this thread is no longer timely.
Animats 1y ago
It's socialism, after all, for the Government to own an interest in a company. Covered yesterday on YC.[1] [1] https://news.ycombinator.com/item?id=44989773 https://news.ycombinator.com/item?id=44989773
- aspenmayer 1y ago
  > It's socialism, after all, for the Government to own an interest in a company. > Covered yesterday on YC.[1] > [1] https://news.ycombinator.com/item?id=44989773 https://news.ycombinator.com/item?id=44989773 The post from yesterday was news; this is commentary, as in, not a dupe. To your point, it's arguably closer to state capitalism, which may be a distinction without a difference if you paint it with the same brush as socialism, but it's one worth mentioning. https://en.wikipedia.org/wiki/State_capitalism https://en.wikipedia.org/wiki/State_capitalism The name of the (sub)site we're posting on is HN; YC is the host. :P
  - Animats 1y ago
    The phrase "lemon socialism" used to be applied to the UK. The Government had managed to acquire the steel industry, the railroad industry, and the auto industry - all dying industries in the UK. They became British Steel, British Rail, and British Leyland. The end result wasn't good. They turned into jobs programs. Eventually those were privatized. Now, the railroads are being socialized again.
    - aspenmayer 1y ago
      It's a pendulum effect, with nationalization on one end, and privatization on the other. If capitalism and money itself is the best organizing principle that works around the world, it does limit the opportunities for change and growth. Socialism doesn't have a counter to the market principle, so they can only incorporate it. The US has a branding problem; freedom ain't free, but nobody even votes, so we earned what we got.
  - crooked-v 1y ago
    "capitalism with American characteristics"
    - aspenmayer 1y ago
      > "capitalism with American characteristics" China is trying to beat US at its own game. US (or at least its current political leader) is trying to beat Russia at its own game. Russia is trying to remain relevant. Russia is the muscle, China is the finance. China needs Russia just like Google (Chrome) needs Firefox. Without Russia around, China would get all of the attention instead. Without Firefox existing, Google would have no counter to antitrust allegations in the web browser space. Anything you can do, I can do better. I can do anything better than you. No, not like that! It's like that Spider-Man meme where everyone is Spider-Man pointing their fingers at each other. All the power structures are mirroring each other. It's all kayfabe, all the time. Everything is wrestling. https://www.nytimes.com/2016/05/27/magazine/is-everything-wrestling.html https://www.nytimes.com/2016/05/27/magazine/is-everything-wr... | https://archive.is/muwUp https://archive.is/muwUp
- boredatoms 1y ago
  We can finally get that universal healthcare then
  - aspenmayer 1y ago
    The healthcare industry doesn't need a bailout, though, so the US has no leverage to demand 10% of healthcare companies' stocks.
    - bdangubic 1y ago
      The “US” you are referring to no longer exists. It has been replaced by a combo of North Korea and Venezuela :)
    - TehCorwiz 1y ago
      The healthcare industry as it is is dominated by parasitic middlemen sucking the money from both patient and provider.
    - vjvjvjvjghv 1y ago
      The healthcare industry is receiving perpetual bailouts through drug import restrictions, tax deductions, subsidies and favorable legislation.
      - aspenmayer 1y ago
        > The healthcare industry is receiving perpetual bailouts through drug import restrictions, tax deductions, subsidies and favorable legislation. The chip fab industry builds billion dollar bespoke superfund sites, and they're paid for the privilege. https://www.jstor.org/stable/j.ctv65swcp.5 https://www.jstor.org/stable/j.ctv65swcp.5 | https://doi.org/10.2307/j.ctv65swcp.5 https://doi.org/10.2307/j.ctv65swcp.5 https://en.wikipedia.org/wiki/Superfund https://en.wikipedia.org/wiki/Superfund
    - kelnos 1y ago
      > the US has no leverage to demand 10% of healthcare companies' stocks The US government doesn't need leverage. It just needs an act of Congress. Corporations are convenient fictions that exist at the pleasure of our legal system, which can be changed.
- krapp 1y ago
  Unless the workers own the means of production, it isn't socialism. The government is just another agent of capitalism here. Can we call this sparkling capitalism?
  - testrun 1y ago
    I think this war is lost. The word socialism means different things to different people. It all depends on where you stand and what you are looking at. If you are on the far right, most things the government does is socialism. If you are on the far left, everything the government does is to support capitalism. And in between the two everything goes.
    - johnecheck 1y ago
      I frequently say the same thing about the word Capitalism. (Communism too). They're second only to 'god' in terms of historical baggage. If you say 'I like Capitalism', a significant minority will hear 'I love US imperialism and hate nature', despite that almost certainly not being what you meant. Similarly, if you say 'I like Communism', many hear 'I love dictators, gulags, 5 year plans and famine'. A word of advice: if you actually want to have valuable political conversations with people, don't start by identifying yourself with ideology that's arguably responsible for various atrocities and millions of deaths.
      - krapp 1y ago
        > if you actually want to have valuable political conversations with people, don't start by identifying yourself with ideology that's arguably responsible for various atrocities and millions of deaths. So neither capitalism nor communism? What's left, anarchism? I guess they haven't killed that many people.
        kelnos 1y ago
        The point is to stop making economic systems a part of your identity. Talk about policies and their effects, not about what bucket you might put them (and yourself) in.
- petralithic 1y ago
  Minor state capitalism, nit socialism.
daft_pink 1y ago
I would agree with your approach if we were simply discussing whether the government should fund intel, but we’ve already committed to funding intel via the government. Pulling back would hurt intel and our interests. Now that intel has become reliant on our promised funding, it makes sense to attach conditions to the funding we need to do instead of just handing it out while getting nothing in return.
- Fade_Dance 1y ago
  The first thing that jumps out is that it is impossible to avoid the absurd juxtaposition of a republican led major national corporate stake, after a decade of the auto bailouts being used as a poster child of policy that the current party in charge doesn't agree with. Moving on from that, you make a good point that it may be the best compromise if the original deal is off the table. That said, in my eyes the implementation could be better. On both a practical and ideological level, I think it would behoove the dealmakers to lay out clear exit conditions. That could look something like anything from signing a covenant with Intel to freeze dividends and corporate buybacks and pay down debt (which is dangerously high for them currently), and then once the corporate balance sheet gets to a safer level, the US gov could run a public auction for the equity once that strike level is hit. I'm sure they could come up with something palatable. What's unexcusable is to apparently enter into a seemingly permanent zone of CCP-style state corporate capitalism without clearly laying out what that means for America going forwards. As an average citizen, I certainly have questions about the precedents being set, and to me it just looks haphazard and off-the-cuff.
  - mlinhares 1y ago
    > The first thing that jumps out is that it is impossible to avoid the absurd juxtaposition of a republican led major national corporate stake, after a decade of the auto bailouts being used as a poster child of policy that the current party in charge doesn't agree with. The only absurd here is to think republicans care about anything other than power . Doesn't matter what they did or said yesterday, what matters is what can they say and do today to remain in power and enable their deep pocketed donors to make more money and gain more power. People really have to stop thinking there's anything there, there's nothing, its all about acquiring and using power. Trying to come up with ideological reasons as to why they do this or that is useless.
paulbjensen 1y ago
[flagged]
bix6 1y ago
Are ARPA H, SBIR, NIH grants, etc. going to start taking equity stakes as well?
- bdangubic 1y ago
  if money can be funneled to DJT - yea. otherwise, nah
  - bix6 1y ago
    New NSF crypto grants incoming :p
- antonymoose 1y ago
  Why are we socializing risk and privatizing profit? Seems like a bad combination to me, a net positive tax payer.
  - bix6 1y ago
    I think you should research the programs a bit to understand why they have been setup this way. Everyone benefits from more medicine, weapons, food, etc.
    - deleted 1y ago
      [deleted]
    - aspenmayer 1y ago
      So why aren't the shares being given to the public?
      - bix6 1y ago
        Nobody gets shares in the first place as they are non dilutive grants.
        aspenmayer 1y ago
seydor 1y ago
Apple offers gold Nvidia/AMD offer 15% profits Intel offers 10% share I think, as a TV star, Trump enjoys all the circus. And everyone else is playing along so it's fun.
- apples_oranges 1y ago
  I wonder if the libertarians and the socialists are already clashing behind the scenes. Trump struck me as the latter and his vice president as the former.
  - seydor 1y ago
    Vance has shown nothing other than authoritarian tendencies
dismalaf 1y ago
So should the government give bailouts without getting any equity back? Only deal in loans? Intel is strategically important. As nice as it is to pretend that the whole world plays by the same rules, that the free market exists everywhere and that we'll never to to war, there are bad actors and the US (rest of the collective West as well) need to ensure that we won't be completely crippled if China attacks a single island off their coast...
- justonceokay 1y ago
  Is there a difference between this and nationalization? Just a matter of degree?
  - dismalaf 1y ago
    > Just a matter of degree? That and when most governments "nationalise" corporations they seize them and don't give the owners/shareholders anything.
    - aspenmayer 1y ago
      > That and when most governments "nationalise" corporations they seize them and don't give the owners/shareholders anything. First you get the money, then you get the power. Money is fungible, but power isn't. Arguably, taking away my power is an affront to my human rights. Taking my money is an affront, but it never was my money to begin with, as I don't control the value or creation of it. My rights are inalienable.
    - Starman_Jones 1y ago
      What are the shareholders getting out of this?
      - dismalaf 1y ago
        Maybe their shares get bought, in this case it looks like Intel might have simply issued the shares. In this case, shareholders have equity in a company that just had $10 billion added to the balance sheet and which the government signalled can't fail. INTC was up over 5% on Friday, obviously shareholders think the government investment is good for them. Versus in most nationalisation events their shares simply get taken away or diluted to pennies.
mdgrech23 1y ago
typical tech bro - they don't want any government regulation and want all the federal dollars they can get for nothing in return. we shouldn't be giving tax payer money to any private or public profit driven corporation ever. Mind you that's also a libertarian principle but tech libertarians always leave that part off.
GeekyBear 1y ago
Didn't we already cross this particular Rubicon during the auto bailout a decade ago? Other examples: > Since the 1950s, the federal government has stepped in as a backstop for railroads, farm credit, airlines (twice), automotive companies, savings and loan companies, banks, and farmers. Every situation has its own idiosyncrasies, but in each, the federal government intervened to stabilize a critical industry, avoiding systemic collapse that surely would have left the average taxpayer much worse off. In some instances, the treasury guaranteed loans, meaning that creditors would not suffer if the relevant industry could not generate sufficient revenue to pay back the loans, leading to less onerous interest rates. A second option was that the government would provide loans at relatively low interest rates to ensure that industries remained solvent. In a third option, the United States Treasury would take an ownership stake in some of these companies in what amounts to an “at-the-market” offering, in which the companies involved issue more shares at their current market price to the government in exchange for cash to continue business operations. https://chicagopolicyreview.org/2022/08/23/piece-of-the-action-debt-vs-equity-for-bailouts/ https://chicagopolicyreview.org/2022/08/23/piece-of-the-acti...
- pton_xd 1y ago
  Yes and the scale was far larger, over $80 billion given to GM and Chrysler. GM was majority owned by the US government for a number of years after that too.
- AnimalMuppet 1y ago
  Yes, but no. The bailout was companies that were headed for bankruptcy. Is Intel? My impression is that they're a lot further from it than GM and Chrysler were.
  - fooker 1y ago
    Intel had been trading below its cumulative physical assets for a pretty long time. This means the market believes they have a path to bankruptcy. Since markets are forward looking, how close it is to bankruptcy does not matter too much. In this case they needed money and the government provided a relatively low amount for a pretty significant stake in the company.
like_any_other 1y ago
Sure. Now make the same argument for TSMC, SMIC, and Samsung, and see if their governments listen.
- AnimalMuppet 1y ago
  Their governments don't operate under the same legal limits that the US government does.
  - like_any_other 1y ago
    But they operate in the same global market.
    - AnimalMuppet 1y ago
      Yes. So there are two considerations. One is competitive balance internationally. That is a consideration. But you also have to consider whether the government has the legal authority to make the investment. For a country claiming a limited government and the rule of law, that is a serious consideration. You seem to be focused on the first consideration, but do not overlook the second one.
      - sieabahlpark 1y ago
        [dead]
      - like_any_other 1y ago
        > For a country claiming a limited government and the rule of law, that is a serious consideration. I'll be blunt - I don't think anyone takes either of those seriously, not since Wickard v. Filburn in 1942. GeekyBear gives a less blunt similar argument: https://news.ycombinator.com/item?id=45008439 https://news.ycombinator.com/item?id=45008439
- tokioyoyo 1y ago
  All those three, from what I can see, is a bit different though. Samsung is basically a part of the government, because of its history. TSMC is the market leader, so it’s in government’s best interest to protect its future. Chinese large scale investments are a bit different. It’s not just SMIC who gets a lot of funding, but others as well, so they can still compete with each other, until the winner is chosen and the others fade away. Similar to what is happening in EV market in China. Intel… there is a decent chance that company fails even after this investment. They basically need to force other companies to use Intel chips instead of competitors for them to be viable at some point.
monkaiju 1y ago
Of course the WSJ is against anything even vaguely gesturing towards nationalization, how could this possibly be considered a reputable source for info on this topic?
- WillPostForFood 1y ago
  The authors are Biden appointees who ran CHIPS Office. They are reputable sources on CHIPS policy.
  - impish9208 1y ago
    One day, HN will understand the difference between an opinion piece and a news article. One day.
godelski 1y ago
Governments owning stocks feels like double dipping with a touch of socialism. I get why the idea seems sane, you want to get returns on investments, right? But with governments the vehicle for returns is taxes and investments are often called "grants" (but also loans, credits, etc). The tax system means you can make investments and always get some return. FFS you could invest in a company going nowhere and you still recoup through taxes. The only way you lose in this system is by tanking the entire economy. Idk why this is so hard to understand. Why people think things like research grants is akin to tossing money into a pit and burning it. I know the current party is anti tax but aren't they also anti nationalization (Words, not actions)? Changing (or adding) your returns vehicle to be through stock only creates nationalization. It increases returns but also puts an additional thumb on the scale. It's very short sighted. Who knew socialism would come to America wrapped in an A̶m̶e̶r̶i̶c̶a̶n̶ capitalism flag?
- deleted 1y ago
  [deleted]
- LudwigNagasena 1y ago
  Governments make regulations that command how companies operate and take taxes from companies. Governments already own significant stocks of companies in all but name. If you make targeted grants, rebates, subsidies, etc, it even seems more fair to make taxing also targeted. And is giving Intel subsidies and making Intel pay for it more socialist than giving Intel subsidies and making everyone pay for it?
  - godelski 1y ago
    Yes
- petralithic 1y ago
  What about this situation is related to workers controlling the means of production at Intel?
  - godelski 1y ago
recursivedoubts 1y ago
this is the logical conclusion of outsourcing: we kept giving away the low end electronics and now we can't compete on the high end w/o government subsidy the supply chain moved to asia and the just so stories about ricardian free trade + an inflated stock market made everyone believe, while the ultra-rich got ultra-ultra-rich and now we sit down to our banquet of consequences
- x0x0 1y ago
  From my pov, it looks more like intel shit the bed repeatedly. Missed on: mobile, custom chips in the data center, graphics cards, ai, and building out fab services they can sell. Meanwhile, they took at least 5 years off of making their chips faster, and we're treated to the absurdity that the m-series chips are as performant in single core as anything Intel can build on a power budget 1/10th of Intel's. I'm not sure what that has to do with outsourcing? It looks more like a comprehensive lack of execution.
  - kevin_thibedeau 1y ago
    Intel was (is?) the largest sponsor of EE H-1Bs. Most such people coming from two countries where it's practically impossible to win the green card lottery. The upshot of that is a massive brain drain when these people have to leave.
  - recursivedoubts 1y ago
    Yeah if you are only gonna look at one tree it's gonna look like it's a bad tree.
  - marsten 1y ago
    Intel should have spun out their fab in 2009-2010 when the signs were clear: Mobile was taking off, AMD spun out their fab, Intel had missed the boat on mobile CPUs, and Apple had acquired PA Semi and was investing heavily in custom silicon. High-end fab is a volume game and that was the time frame when Intel was still process competitive and could have competed for Apple's business (and Nvidia's, ...). But that would never happen as a division of Intel, nobody wants to send their designs to a competitor.
vjvjvjvjghv 1y ago
When I read the comments I am getting the feeling that "socialism" is bad but nobody agrees what it is.
- NoahZuniga 1y ago
  It's more that one of the talking points of the political right in the us is that socialism is bad, while the state owning means of production is a key idea of socialism. So Trump making this happen is very ironic.
yahway 1y ago
TSMC was funded by government. The cost requirement for new fabs is beyond the funding private enterprises can muster. Perhaps through funding, years down the road, it may make sense. This isn't about Intel IP, it's about manufacturing high end chips on US soil.
- x0x0 1y ago
  it's less than ideal to have the sole company capable of making the best chips 81 miles off the coast of China.
- amelius 1y ago
  Yes, this is also about the non-existing level playing field. How can US win if countries like China don't play by the same rules?
  - Mountain_Skies 1y ago
    Tariffs
  - thrown-0825 1y ago
    what rules lol?
srvo 1y ago
The problem here isn't that the government gets involved in businesses. That has always been something they do. The problem is that these days they do it capriciously, without any sort of plan or intention. The government played a foundational role in supporting the early stage research that enabled companies like Intel to emerge. Underwriting that sort of long-term investment that wouldn't easily attract commercial capital is a great place for them to be. Meanwhile, is it even the case that the American chip industry is declining? Apple, Nvidia, and Google all have significant chip manufacturing operations. And this isn't an industry I even follow particularly closesly.
- xethos 1y ago
  > Apple, Nvidia, and Google all have significant chip manufacturing operations No, they all (as well as AMD) all have significant chip designing operations. Not one of them can actually fabricate their own chips. Every single one of them must speak to TSMC or Samsung if they want to take their designs from the whiteboard to the physical world.
  - anonfordays 1y ago
    Amazes me how many self-proclaimed "techies" don't know this simple fact.
    - jajko 1y ago
      You would be amazed how many seemingly basic things about this world and IT you don't know... a bit of humility goes much longer way than this.
      - anonfordays 1y ago
        If I don't know something, I don't make statements such as "Apple, Nvidia, and Google all have significant chip manufacturing operations..." a bit of humility goes much longer way than this.
lisbbb 1y ago
The handwringing over Trump continues and is completely unwarranted. Obama bailed out the entire banking industry to horrifying moral hazard. The US is bailing out Intel for national security reasons and taking a 10% stake is a better deal for US taxpayers than how typical bailouts like GM played out. Sheesh! It's like you can't even read a news story these days without seeing the anti-Trump bias programmed into the article.
- thatswrong0 1y ago
  Completely unwarranted? lol
  - lisbbb 1y ago
    Totally unwarranted--you allowed Biden to be US President and he was mentally impaired the ENTIRE TIME and you were just fine with that, probably. So get over it! I had to. The absurdity of modern life is unbelievable.
    - thatswrong0 1y ago
      I wasn’t fine with that but also Trump is way more unhinged, openly advocates for and implements unconstitutional policies, has damaged the US’s reputation on a global level, has been pretty openly corrupt, and idk has been found liable for sexual assault (basically rape) and is probably a pedophile at that via Epstein, not to mention other felonies. If you’re fine with that rap sheet, more power to you. I’d rather our president be old than be an old rapist wannabe dictator criminal who has, literally said on a recording, “grab em by the pussy” in reference to women.
- miffy900 1y ago
  So, the one bad thing that sticks out about what Trump is doing now, is that he's adding more conditions to the money that has already been legally disbursed by Congress. Under the CHIPS act, Intel is already eligible to receive the money; Trump is illegally adding more conditions for Intel to receive the money, after the fact. To do this legally, the act needs to be amended. As simple as that. Anything more than that is illegal.
qbxk 1y ago
whoops! we accidentally democratic socialismed
neonate 1y ago
https://www.wsj.com/opinion/uncle-sam-shouldnt-own-intel-stock-ccd6986d?st=5YqsGK&reflink=desktopwebshare_permalink https://www.wsj.com/opinion/uncle-sam-shouldnt-own-intel-sto...
deleted 1y ago
[deleted]
gkanai 1y ago
Why didnt the USGov/US military force their suppliers (Boeing, Lockheed, etc.) to buy from Intel? That would create some demand for 18A or 14A.
- aspenmayer 1y ago
  Maybe those are cost-plus contracts, so they would be able to claim hardship and incompatibility and send you a bill for even considering it, with an attached estimate for compliance at 10-1000x the last quote.
- trenchpilgrim 1y ago
  I don't think Intel makes anything suitable for their products...
  - mrheosuper 1y ago
    Intel has FPGA, which is used a lot in their products
- wmf 1y ago
  They are sort of doing this under the Secure Enclave program. "National security" chips will be fabbed by Intel.
beefnugs 1y ago
So maybe 50/50 that the top of the pyramid doesnt just take the free printed money and keep running the company into the ground. If they pass that hurdle, its more like 70/30 Dump says put backdoors into all processors, and says it loud and proud. Assuming intel is smart enough to be able to fuse that functionality out entirely (not that anyone would believe they disabled the functionality)... That leaves somewhere about 15% chance that Intel survives 5 more years
pjjpo 1y ago
> Unlike grants, equity comes at a steep cost to Intel. Transferring grants into equity therefore risks putting Intel at a cost disadvantage relative to other chip makers A lot of this article seems to rely on this point but the possible cost isn't clarified. I can understand equity arrangements affecting shareholders but how would it reduce the product's competitiveness, notably the unit cost which seems to be the point regards to other chipmakers. If it's about stock price going down, employee comp going down and product effects from that, it seems too speculative? On the flip side, it sounds like instead of cash over time it becomes a lump cash infusion, which seems like it could result in benefits of its own such as bringing forward timelines.
- A4ET8a8uTh0_v2 1y ago
  << how would it reduce the product's competitiveness It wouldn't. It is an opinion piece. On that basis alone, knowing what we know about media landscape, it exists as a means of forming opinion and allowable argumentation for the issue at hand. If that premise is accepted then the piece is there to protect the poor shareholders, who until now were thinking Intel will be getting 'free' government money, but suddenly found the cost of government involvement may be higher. Suddenly, that is a bridge too far. You can grant them money, but, good heavens, think of what you will do if you demand that we give you equity of said money.. I mean.. sure WSJ intended audience, who is bound to nod on 'productivity' line of argumentation, but people with a sense of Intel history ( or most US industries that offshored and now talk reshoring for that matter ) might chuckle at the hutzpah.
dijit 1y ago
What's the old saying? It's capitalism when you're winning, and socialism if you're losing. Or: "Privatised profits, socialised losses". I understand why in this case, Intel is very much in bed with the US Government and likely makes a strong case for being a national security interest, but it feels icky.. especially as AMD is an American company too. If the issue is the node fabrication then why wasn't their an investment in Fabs before now? Intel got its big start on government grants iirc.
- jimt1234 1y ago
  > If capitalism is so great, then why does it need to be rescued by socialism every ten years? Not sure where I read that (I think it was some dude's Tweet), but it seems relevant here.
  - fransje26 1y ago
    > Then why does it need to be rescued by socialism every ten years? Please think of the poor, poor shareholders.
  - runeks 1y ago
    So the logic here is that if I take a strawberry cake and sprinkle some chocolate on it then that's proof that a chocolate cake is better than a strawberry cake?
    - barbazoo 1y ago
      Not quite I think. The logic would be that everyone says strawberry cake is the best cake there is, yet every ten years we have to dump a ton of chocolate on it to make it edible so they're asking, was it really that good to begin with?
    - gilbetron 1y ago
      No, it's proof that chocolate can be a tasty addition. Left: Capitalism isn't always perfect, sometimes social policies make a better society. Right: Capitalism is always perfect, socialism is evil even in the smallest amounts.
atoav 1y ago
I think this is one of the smaller problems the US might have right now.
miffy900 1y ago
Anyone here arguing that we should just let Intel fail in the market needs to understand that Intel is struggling right now partly because Asian nations like South Korea and Taiwan have for years subsidized their own chip making companies because they knew that in the long term, it was going to be an important strategic industry that would eventually be worth the effort and trouble. Now look where we are. Their long term strategy has paid off. Only TSMC is at the cutting edge, and Samsung is a fairly distant, but still reasonably close, secondary player. Maybe there are better ways to prop up Intel besides the government taking a stake, but losing Intel would be a huge blow to American manufacturing interests. There's been a failure of strategic vision, both at Intel and in the American government. I think as a short term measure, taking a stake isn't the worst thing the government could do at this time. Also to go off on a tangent a bit: this is one of the benefits of having a Trump-like character as President; he's clearly not beholden to any ideology and is extremely flexible when it comes to making policy decisions, even when a certain policy might be more at home with the opposing party or side of politics.
DrNosferatu 1y ago
Bernie Sanders is right: The state should get equity for the money it spent on bailouts (or other purposes). And this money should be put to work on social programs ;)
- dangus 1y ago
  I’m pretty sure that many of the state’s bailouts have returned equity? E.g., the government made money on the GM bailout.
th0ma5 1y ago
Socialism for corporations and the rich, kleptocracy for everyone else.
- mettamage 1y ago
  > Socialism for corporations and the rich Aka late stage capitalism.
- petralithic 1y ago
  There is nothing socialist about buying shares in a company. Workers do not control the means of production at Intel.
JimmyBuckets 1y ago
https://archive.is/hTITI https://archive.is/hTITI
ffsm8 1y ago
[flagged]
- epolanski 1y ago
  This level of commentary would be low level even for Reddit.
  - ffsm8 1y ago
    Haha, that's true. Honestly, I wasn't expecting anyone to actually read this comment, as there were some quiet large discussions going on. I was pretty much just joking around
paulvnickerson 1y ago
You guys would love it if Obama or Biden had done it.
- krapp 1y ago
  Meh. You would have called it communism if Obama or Biden had done it.
  - paulvnickerson 1y ago
    That's probably true lol. More specifically socialism.
- mettamage 1y ago
  I'm neutral in both cases actually. And last election I voted for the most left party I could find in my country.
darig 1y ago
[dead]
CyanLite2 1y ago
We have a $37 trillion dollar deficit. I think traditional government isn’t working and we need to find ways to raise revenue sooner rather than later before this spirals out of control.
- throwaway173738 1y ago
  We could raise corporate taxes. That would raise a lot of revenue.
- ChrisLTD 1y ago
  We have taxes, but the current governing coalition is opposed to raising them.
  - petralithic 1y ago
    Tariffs are taxes, they are not opposed to raising them, they just won't call them "taxes." It's honestly remarkable how effective they are in reaching their policy goals, because they understand their voter base extremely clearly. They know that their voters largely go off of key words, so by changing those words, one can make them support whatever policy one wants. It is amazing to witness, really.
KingLancelot 1y ago
[dead]
SebFender 1y ago
I'm not against governments helping out companies per se in different forms but the question remains "Why are they there and what's the impact if they fall?" It's been done many times in the past decades from financial institutions, manufacturing, others and in different ways. Remember Harley-Davidson and tarifs on imported motorcycles? I think the real question becomes how will get done and for how long.
freen 1y ago
I always that the GOP was against public ownership of the Means of production? Seems awfully… communist?
phkahler 1y ago
IMHO Let Intel fail. Their fabs can be bought in bankruptcy by other chip companies that may be better run. Granted, a lot of those companies are currently fabless, but how many would change that with equipment bought at a fraction of the cost? TI, Micron, GF all have fabs. Qualcomm strikes me as a fabless that might give it a shot. I'm assuming the people and know-how would come with the fabs of course.
- Night_Thastus 1y ago
  There are a lot of times where I'd say a business should be allowed to fail - but this is a poor choice to do so. * You can't just spin up leading edge semiconductor manufacturing on a dime. It takes decades and hundreds of billions to reach where companies like Intel and TSMC are now. It's so hard that it's essentially impossible for new entrants to catch up. * The US has a strong interest in having local manufacturing, that no other power could take away in a time where it's needed. >a lot of those companies are currently fabless, but how many would change that with equipment bought at a fraction of the cost? Zero. Dumping the fabs on them would not help them. They're expensive and complicated to run. They don't have the knowledge to run the fab side of design (it's a joint effort on both sides to design a chip), nor the money or knowledge to improve those fabs and keep them up with the leading edge.
  - florbnit 1y ago
    > You can't just spin up leading edge semiconductor manufacturing on a dime. It takes decades and hundreds of billions to reach where companies like Intel and TSMC are now. It's so hard that it's essentially impossible for new entrants to catch up. You can if intel goes bankrupt. Why do people act like a bankruptcy consists of taking all the employees out back and putting them down then setting all the buildings on fire.
    - Night_Thastus 1y ago
      It's hard to retain knowledge and processes in a bankruptcy. Even if you manage to get ALL the equipment and the people back (far, far from guaranteed) sometimes you've broken the systems that let it work in the first place. (Not that Intel's has been working particularly well, as of late)
iamleppert 1y ago
It's not as easy as "nudging, cajoling and creating incentives for major customers to diversify their supply chains and use Intel capacity". Changing out process tech isn't like changing the tires on your car for another brand. It requires, in many cases, a substantial redesign....and directly working with Intel. Why would a company support two different chip designs, for the luxury of deployment on an inferior technology platform, coupled to a troubled company that has a history of not being able to keep up or consistently deliver the latest process tech? It's a substantial, long-term investment that has wide reaching implications on the performance of your own products you are building. Who pays for that and sets up their company for failure like that? If you build on Intel, you are making a decision that exempts you from competing in the top of market for your products. Your designs will run hotter, consume more energy, have less yield, and lower clock. The design will be more complex and costly and have very little shared between other vendors. You'll need to maintain and inventory two different BOMs for a critical component, and you'll likely have subtle hardware differences or completely missing features that will require further software customization, creating even more complexity and headache to delivering a modern tech product. Hardware designs are hard enough as it is and companies don't have infinite resources or capacity. And don't count on Intel taking the lead from one of the others, giving your product a boost -- anticipate them further falling behind, or lagging behind at best. Like always, the government doesn't understand any of this and the outcome of this latest missive is going to be completely predictable.
- mlyle 1y ago
  > If you build on Intel, you are making a decision that exempts you from competing in the top of market for your products. Your designs will run hotter, consume more energy, have less yield, and lower clock. Most of semiconductor production is not on the leading edge. Most big SoC production is not even on the leading edge. There's a lot of room for older fabs. And the customer can demand a lower price as a result of lower yield and performance. > You'll need to maintain and inventory two different BOMs for a critical component Most of this stuff that is not on the leading edge doesn't have a "leading edge variant". Of course, I wouldn't build on Intel for other reasons: they've been terrible as a foundry and they have been changing directions seemingly weekly. That is the hurdle that you can't get over: you can't rely upon them as a partner.
caycep 1y ago
Jared Bernstein takes: https://econjared.substack.com/p/us-capitalism-with-chinese-characteristics https://econjared.substack.com/p/us-capitalism-with-chinese-... https://econjared.substack.com/p/the-usgs-intel-stakes-part-2 https://econjared.substack.com/p/the-usgs-intel-stakes-part-...
solardev 1y ago
What if we went the other direction and nationalized 100% of Intel? What would happen?
davesque 1y ago
Why wouldn't the Intel stock purchase just be effectively throwing away $9 billion? Do they think Intel is suddenly going to start running their business in a drastically different way?
thrown-0825 1y ago
America is drowning and reaching for anything to keep it afloat. I can’t wait for the AI bubble to burst, its going to be hilarious.
floppiplopp 1y ago
The US is trying CCP-style state-capitalism? Also, the glorious leader and great GOP chairman Trump gave his owners a great opportunity for insider trade. Last time be publicly bragged about it, too.
foo70 1y ago
if Intel takes government money, they will need to take a Trump family member onto the board, right?
sharts 1y ago
Let Intel fail. On a side note, though, the gov absolutely should take a stake in the entire market to and use it to both create sovereign wealth fund and a means for citizens to exercise their rights as stakeholders.

335 points by aspenmayer 1y ago

https://www.wsj.com/opinion/uncle-sam-shouldnt-own-intel-stock-ccd6986d?st=5YqsGK&reflink=desktopwebshare_permalink https://www.wsj.com/opinion/uncle-sam-shouldnt-own-intel-sto...

aspenmayer 1y ago
neonate's archive link doesn't include the actual article, just the lede. I don't know why I can't reply to them, but I suspect it's because their post is pinned by mods, but it doesn't work properly for that purpose, so this may help: https://pastebin.com/raw/vL07QfVi https://pastebin.com/raw/vL07QfVi
- aspenmayer 1y ago
  neonate’s link has been updated since this post, so this thread is no longer timely.

Animats 1y ago

It's socialism, after all, for the Government to own an interest in a company. Covered yesterday on YC.[1] [1] https://news.ycombinator.com/item?id=44989773 https://news.ycombinator.com/item?id=44989773

aspenmayer 1y ago
> It's socialism, after all, for the Government to own an interest in a company. > Covered yesterday on YC.[1] > [1] https://news.ycombinator.com/item?id=44989773 https://news.ycombinator.com/item?id=44989773 The post from yesterday was news; this is commentary, as in, not a dupe. To your point, it's arguably closer to state capitalism, which may be a distinction without a difference if you paint it with the same brush as socialism, but it's one worth mentioning. https://en.wikipedia.org/wiki/State_capitalism https://en.wikipedia.org/wiki/State_capitalism The name of the (sub)site we're posting on is HN; YC is the host. :P
- Animats 1y ago
  The phrase "lemon socialism" used to be applied to the UK. The Government had managed to acquire the steel industry, the railroad industry, and the auto industry - all dying industries in the UK. They became British Steel, British Rail, and British Leyland. The end result wasn't good. They turned into jobs programs. Eventually those were privatized. Now, the railroads are being socialized again.
  - aspenmayer 1y ago
    It's a pendulum effect, with nationalization on one end, and privatization on the other. If capitalism and money itself is the best organizing principle that works around the world, it does limit the opportunities for change and growth. Socialism doesn't have a counter to the market principle, so they can only incorporate it. The US has a branding problem; freedom ain't free, but nobody even votes, so we earned what we got.
- crooked-v 1y ago
  "capitalism with American characteristics"
  - aspenmayer 1y ago
    > "capitalism with American characteristics" China is trying to beat US at its own game. US (or at least its current political leader) is trying to beat Russia at its own game. Russia is trying to remain relevant. Russia is the muscle, China is the finance. China needs Russia just like Google (Chrome) needs Firefox. Without Russia around, China would get all of the attention instead. Without Firefox existing, Google would have no counter to antitrust allegations in the web browser space. Anything you can do, I can do better. I can do anything better than you. No, not like that! It's like that Spider-Man meme where everyone is Spider-Man pointing their fingers at each other. All the power structures are mirroring each other. It's all kayfabe, all the time. Everything is wrestling. https://www.nytimes.com/2016/05/27/magazine/is-everything-wrestling.html https://www.nytimes.com/2016/05/27/magazine/is-everything-wr... | https://archive.is/muwUp https://archive.is/muwUp
boredatoms 1y ago
We can finally get that universal healthcare then
- aspenmayer 1y ago
  The healthcare industry doesn't need a bailout, though, so the US has no leverage to demand 10% of healthcare companies' stocks.
  - bdangubic 1y ago
    The “US” you are referring to no longer exists. It has been replaced by a combo of North Korea and Venezuela :)
  - TehCorwiz 1y ago
    The healthcare industry as it is is dominated by parasitic middlemen sucking the money from both patient and provider.
  - vjvjvjvjghv 1y ago
    The healthcare industry is receiving perpetual bailouts through drug import restrictions, tax deductions, subsidies and favorable legislation.
    - aspenmayer 1y ago
      > The healthcare industry is receiving perpetual bailouts through drug import restrictions, tax deductions, subsidies and favorable legislation. The chip fab industry builds billion dollar bespoke superfund sites, and they're paid for the privilege. https://www.jstor.org/stable/j.ctv65swcp.5 https://www.jstor.org/stable/j.ctv65swcp.5 | https://doi.org/10.2307/j.ctv65swcp.5 https://doi.org/10.2307/j.ctv65swcp.5 https://en.wikipedia.org/wiki/Superfund https://en.wikipedia.org/wiki/Superfund
  - kelnos 1y ago
    > the US has no leverage to demand 10% of healthcare companies' stocks The US government doesn't need leverage. It just needs an act of Congress. Corporations are convenient fictions that exist at the pleasure of our legal system, which can be changed.
krapp 1y ago
Unless the workers own the means of production, it isn't socialism. The government is just another agent of capitalism here. Can we call this sparkling capitalism?
- testrun 1y ago
  I think this war is lost. The word socialism means different things to different people. It all depends on where you stand and what you are looking at. If you are on the far right, most things the government does is socialism. If you are on the far left, everything the government does is to support capitalism. And in between the two everything goes.
  - johnecheck 1y ago
    I frequently say the same thing about the word Capitalism. (Communism too). They're second only to 'god' in terms of historical baggage. If you say 'I like Capitalism', a significant minority will hear 'I love US imperialism and hate nature', despite that almost certainly not being what you meant. Similarly, if you say 'I like Communism', many hear 'I love dictators, gulags, 5 year plans and famine'. A word of advice: if you actually want to have valuable political conversations with people, don't start by identifying yourself with ideology that's arguably responsible for various atrocities and millions of deaths.
    - krapp 1y ago
      > if you actually want to have valuable political conversations with people, don't start by identifying yourself with ideology that's arguably responsible for various atrocities and millions of deaths. So neither capitalism nor communism? What's left, anarchism? I guess they haven't killed that many people.
      - kelnos 1y ago
        The point is to stop making economic systems a part of your identity. Talk about policies and their effects, not about what bucket you might put them (and yourself) in.
petralithic 1y ago
Minor state capitalism, nit socialism.

daft_pink 1y ago

I would agree with your approach if we were simply discussing whether the government should fund intel, but we’ve already committed to funding intel via the government. Pulling back would hurt intel and our interests. Now that intel has become reliant on our promised funding, it makes sense to attach conditions to the funding we need to do instead of just handing it out while getting nothing in return.

Fade_Dance 1y ago
The first thing that jumps out is that it is impossible to avoid the absurd juxtaposition of a republican led major national corporate stake, after a decade of the auto bailouts being used as a poster child of policy that the current party in charge doesn't agree with. Moving on from that, you make a good point that it may be the best compromise if the original deal is off the table. That said, in my eyes the implementation could be better. On both a practical and ideological level, I think it would behoove the dealmakers to lay out clear exit conditions. That could look something like anything from signing a covenant with Intel to freeze dividends and corporate buybacks and pay down debt (which is dangerously high for them currently), and then once the corporate balance sheet gets to a safer level, the US gov could run a public auction for the equity once that strike level is hit. I'm sure they could come up with something palatable. What's unexcusable is to apparently enter into a seemingly permanent zone of CCP-style state corporate capitalism without clearly laying out what that means for America going forwards. As an average citizen, I certainly have questions about the precedents being set, and to me it just looks haphazard and off-the-cuff.
- mlinhares 1y ago
  > The first thing that jumps out is that it is impossible to avoid the absurd juxtaposition of a republican led major national corporate stake, after a decade of the auto bailouts being used as a poster child of policy that the current party in charge doesn't agree with. The only absurd here is to think republicans care about anything other than power . Doesn't matter what they did or said yesterday, what matters is what can they say and do today to remain in power and enable their deep pocketed donors to make more money and gain more power. People really have to stop thinking there's anything there, there's nothing, its all about acquiring and using power. Trying to come up with ideological reasons as to why they do this or that is useless.

paulbjensen 1y ago

[flagged]

bix6 1y ago

Are ARPA H, SBIR, NIH grants, etc. going to start taking equity stakes as well?

bdangubic 1y ago
if money can be funneled to DJT - yea. otherwise, nah
- bix6 1y ago
  New NSF crypto grants incoming :p
antonymoose 1y ago
Why are we socializing risk and privatizing profit? Seems like a bad combination to me, a net positive tax payer.
- bix6 1y ago
  I think you should research the programs a bit to understand why they have been setup this way. Everyone benefits from more medicine, weapons, food, etc.
  - deleted 1y ago
    [deleted]
  - aspenmayer 1y ago
    So why aren't the shares being given to the public?
    - bix6 1y ago
      Nobody gets shares in the first place as they are non dilutive grants.
      - aspenmayer 1y ago

seydor 1y ago

Apple offers gold Nvidia/AMD offer 15% profits Intel offers 10% share I think, as a TV star, Trump enjoys all the circus. And everyone else is playing along so it's fun.

apples_oranges 1y ago
I wonder if the libertarians and the socialists are already clashing behind the scenes. Trump struck me as the latter and his vice president as the former.
- seydor 1y ago
  Vance has shown nothing other than authoritarian tendencies

dismalaf 1y ago

So should the government give bailouts without getting any equity back? Only deal in loans? Intel is strategically important. As nice as it is to pretend that the whole world plays by the same rules, that the free market exists everywhere and that we'll never to to war, there are bad actors and the US (rest of the collective West as well) need to ensure that we won't be completely crippled if China attacks a single island off their coast...

justonceokay 1y ago
Is there a difference between this and nationalization? Just a matter of degree?
- dismalaf 1y ago
  > Just a matter of degree? That and when most governments "nationalise" corporations they seize them and don't give the owners/shareholders anything.
  - aspenmayer 1y ago
    > That and when most governments "nationalise" corporations they seize them and don't give the owners/shareholders anything. First you get the money, then you get the power. Money is fungible, but power isn't. Arguably, taking away my power is an affront to my human rights. Taking my money is an affront, but it never was my money to begin with, as I don't control the value or creation of it. My rights are inalienable.
  - Starman_Jones 1y ago
    What are the shareholders getting out of this?
    - dismalaf 1y ago
      Maybe their shares get bought, in this case it looks like Intel might have simply issued the shares. In this case, shareholders have equity in a company that just had $10 billion added to the balance sheet and which the government signalled can't fail. INTC was up over 5% on Friday, obviously shareholders think the government investment is good for them. Versus in most nationalisation events their shares simply get taken away or diluted to pennies.

mdgrech23 1y ago

typical tech bro - they don't want any government regulation and want all the federal dollars they can get for nothing in return. we shouldn't be giving tax payer money to any private or public profit driven corporation ever. Mind you that's also a libertarian principle but tech libertarians always leave that part off.

GeekyBear 1y ago

Didn't we already cross this particular Rubicon during the auto bailout a decade ago? Other examples: > Since the 1950s, the federal government has stepped in as a backstop for railroads, farm credit, airlines (twice), automotive companies, savings and loan companies, banks, and farmers. Every situation has its own idiosyncrasies, but in each, the federal government intervened to stabilize a critical industry, avoiding systemic collapse that surely would have left the average taxpayer much worse off. In some instances, the treasury guaranteed loans, meaning that creditors would not suffer if the relevant industry could not generate sufficient revenue to pay back the loans, leading to less onerous interest rates. A second option was that the government would provide loans at relatively low interest rates to ensure that industries remained solvent. In a third option, the United States Treasury would take an ownership stake in some of these companies in what amounts to an “at-the-market” offering, in which the companies involved issue more shares at their current market price to the government in exchange for cash to continue business operations. https://chicagopolicyreview.org/2022/08/23/piece-of-the-action-debt-vs-equity-for-bailouts/ https://chicagopolicyreview.org/2022/08/23/piece-of-the-acti...

pton_xd 1y ago
Yes and the scale was far larger, over $80 billion given to GM and Chrysler. GM was majority owned by the US government for a number of years after that too.
AnimalMuppet 1y ago
Yes, but no. The bailout was companies that were headed for bankruptcy. Is Intel? My impression is that they're a lot further from it than GM and Chrysler were.
- fooker 1y ago
  Intel had been trading below its cumulative physical assets for a pretty long time. This means the market believes they have a path to bankruptcy. Since markets are forward looking, how close it is to bankruptcy does not matter too much. In this case they needed money and the government provided a relatively low amount for a pretty significant stake in the company.

like_any_other 1y ago

Sure. Now make the same argument for TSMC, SMIC, and Samsung, and see if their governments listen.

AnimalMuppet 1y ago
Their governments don't operate under the same legal limits that the US government does.
- like_any_other 1y ago
  But they operate in the same global market.
  - AnimalMuppet 1y ago
    Yes. So there are two considerations. One is competitive balance internationally. That is a consideration. But you also have to consider whether the government has the legal authority to make the investment. For a country claiming a limited government and the rule of law, that is a serious consideration. You seem to be focused on the first consideration, but do not overlook the second one.
    - sieabahlpark 1y ago
      [dead]
    - like_any_other 1y ago
      > For a country claiming a limited government and the rule of law, that is a serious consideration. I'll be blunt - I don't think anyone takes either of those seriously, not since Wickard v. Filburn in 1942. GeekyBear gives a less blunt similar argument: https://news.ycombinator.com/item?id=45008439 https://news.ycombinator.com/item?id=45008439
tokioyoyo 1y ago
All those three, from what I can see, is a bit different though. Samsung is basically a part of the government, because of its history. TSMC is the market leader, so it’s in government’s best interest to protect its future. Chinese large scale investments are a bit different. It’s not just SMIC who gets a lot of funding, but others as well, so they can still compete with each other, until the winner is chosen and the others fade away. Similar to what is happening in EV market in China. Intel… there is a decent chance that company fails even after this investment. They basically need to force other companies to use Intel chips instead of competitors for them to be viable at some point.

monkaiju 1y ago

Of course the WSJ is against anything even vaguely gesturing towards nationalization, how could this possibly be considered a reputable source for info on this topic?

WillPostForFood 1y ago
The authors are Biden appointees who ran CHIPS Office. They are reputable sources on CHIPS policy.
- impish9208 1y ago
  One day, HN will understand the difference between an opinion piece and a news article. One day.

godelski 1y ago

Governments owning stocks feels like double dipping with a touch of socialism. I get why the idea seems sane, you want to get returns on investments, right? But with governments the vehicle for returns is taxes and investments are often called "grants" (but also loans, credits, etc). The tax system means you can make investments and always get some return. FFS you could invest in a company going nowhere and you still recoup through taxes. The only way you lose in this system is by tanking the entire economy. Idk why this is so hard to understand. Why people think things like research grants is akin to tossing money into a pit and burning it. I know the current party is anti tax but aren't they also anti nationalization (Words, not actions)? Changing (or adding) your returns vehicle to be through stock only creates nationalization. It increases returns but also puts an additional thumb on the scale. It's very short sighted. Who knew socialism would come to America wrapped in an A̶m̶e̶r̶i̶c̶a̶n̶ capitalism flag?

deleted 1y ago
[deleted]
LudwigNagasena 1y ago
Governments make regulations that command how companies operate and take taxes from companies. Governments already own significant stocks of companies in all but name. If you make targeted grants, rebates, subsidies, etc, it even seems more fair to make taxing also targeted. And is giving Intel subsidies and making Intel pay for it more socialist than giving Intel subsidies and making everyone pay for it?
- godelski 1y ago
  Yes
petralithic 1y ago
What about this situation is related to workers controlling the means of production at Intel?
- godelski 1y ago

recursivedoubts 1y ago

this is the logical conclusion of outsourcing: we kept giving away the low end electronics and now we can't compete on the high end w/o government subsidy the supply chain moved to asia and the just so stories about ricardian free trade + an inflated stock market made everyone believe, while the ultra-rich got ultra-ultra-rich and now we sit down to our banquet of consequences

x0x0 1y ago
From my pov, it looks more like intel shit the bed repeatedly. Missed on: mobile, custom chips in the data center, graphics cards, ai, and building out fab services they can sell. Meanwhile, they took at least 5 years off of making their chips faster, and we're treated to the absurdity that the m-series chips are as performant in single core as anything Intel can build on a power budget 1/10th of Intel's. I'm not sure what that has to do with outsourcing? It looks more like a comprehensive lack of execution.
- kevin_thibedeau 1y ago
  Intel was (is?) the largest sponsor of EE H-1Bs. Most such people coming from two countries where it's practically impossible to win the green card lottery. The upshot of that is a massive brain drain when these people have to leave.
- recursivedoubts 1y ago
  Yeah if you are only gonna look at one tree it's gonna look like it's a bad tree.
- marsten 1y ago
  Intel should have spun out their fab in 2009-2010 when the signs were clear: Mobile was taking off, AMD spun out their fab, Intel had missed the boat on mobile CPUs, and Apple had acquired PA Semi and was investing heavily in custom silicon. High-end fab is a volume game and that was the time frame when Intel was still process competitive and could have competed for Apple's business (and Nvidia's, ...). But that would never happen as a division of Intel, nobody wants to send their designs to a competitor.

vjvjvjvjghv 1y ago

When I read the comments I am getting the feeling that "socialism" is bad but nobody agrees what it is.

NoahZuniga 1y ago
It's more that one of the talking points of the political right in the us is that socialism is bad, while the state owning means of production is a key idea of socialism. So Trump making this happen is very ironic.

yahway 1y ago

TSMC was funded by government. The cost requirement for new fabs is beyond the funding private enterprises can muster. Perhaps through funding, years down the road, it may make sense. This isn't about Intel IP, it's about manufacturing high end chips on US soil.

x0x0 1y ago
it's less than ideal to have the sole company capable of making the best chips 81 miles off the coast of China.
amelius 1y ago
Yes, this is also about the non-existing level playing field. How can US win if countries like China don't play by the same rules?
- Mountain_Skies 1y ago
  Tariffs
- thrown-0825 1y ago
  what rules lol?

srvo 1y ago

The problem here isn't that the government gets involved in businesses. That has always been something they do. The problem is that these days they do it capriciously, without any sort of plan or intention. The government played a foundational role in supporting the early stage research that enabled companies like Intel to emerge. Underwriting that sort of long-term investment that wouldn't easily attract commercial capital is a great place for them to be. Meanwhile, is it even the case that the American chip industry is declining? Apple, Nvidia, and Google all have significant chip manufacturing operations. And this isn't an industry I even follow particularly closesly.

xethos 1y ago
> Apple, Nvidia, and Google all have significant chip manufacturing operations No, they all (as well as AMD) all have significant chip designing operations. Not one of them can actually fabricate their own chips. Every single one of them must speak to TSMC or Samsung if they want to take their designs from the whiteboard to the physical world.
- anonfordays 1y ago
  Amazes me how many self-proclaimed "techies" don't know this simple fact.
  - jajko 1y ago
    You would be amazed how many seemingly basic things about this world and IT you don't know... a bit of humility goes much longer way than this.
    - anonfordays 1y ago
      If I don't know something, I don't make statements such as "Apple, Nvidia, and Google all have significant chip manufacturing operations..." a bit of humility goes much longer way than this.

lisbbb 1y ago

The handwringing over Trump continues and is completely unwarranted. Obama bailed out the entire banking industry to horrifying moral hazard. The US is bailing out Intel for national security reasons and taking a 10% stake is a better deal for US taxpayers than how typical bailouts like GM played out. Sheesh! It's like you can't even read a news story these days without seeing the anti-Trump bias programmed into the article.

thatswrong0 1y ago
Completely unwarranted? lol
- lisbbb 1y ago
  Totally unwarranted--you allowed Biden to be US President and he was mentally impaired the ENTIRE TIME and you were just fine with that, probably. So get over it! I had to. The absurdity of modern life is unbelievable.
  - thatswrong0 1y ago
    I wasn’t fine with that but also Trump is way more unhinged, openly advocates for and implements unconstitutional policies, has damaged the US’s reputation on a global level, has been pretty openly corrupt, and idk has been found liable for sexual assault (basically rape) and is probably a pedophile at that via Epstein, not to mention other felonies. If you’re fine with that rap sheet, more power to you. I’d rather our president be old than be an old rapist wannabe dictator criminal who has, literally said on a recording, “grab em by the pussy” in reference to women.
miffy900 1y ago
So, the one bad thing that sticks out about what Trump is doing now, is that he's adding more conditions to the money that has already been legally disbursed by Congress. Under the CHIPS act, Intel is already eligible to receive the money; Trump is illegally adding more conditions for Intel to receive the money, after the fact. To do this legally, the act needs to be amended. As simple as that. Anything more than that is illegal.

qbxk 1y ago

whoops! we accidentally democratic socialismed

neonate 1y ago

https://www.wsj.com/opinion/uncle-sam-shouldnt-own-intel-stock-ccd6986d?st=5YqsGK&reflink=desktopwebshare_permalink https://www.wsj.com/opinion/uncle-sam-shouldnt-own-intel-sto...

deleted 1y ago

[deleted]

gkanai 1y ago

Why didnt the USGov/US military force their suppliers (Boeing, Lockheed, etc.) to buy from Intel? That would create some demand for 18A or 14A.

aspenmayer 1y ago
Maybe those are cost-plus contracts, so they would be able to claim hardship and incompatibility and send you a bill for even considering it, with an attached estimate for compliance at 10-1000x the last quote.
trenchpilgrim 1y ago
I don't think Intel makes anything suitable for their products...
- mrheosuper 1y ago
  Intel has FPGA, which is used a lot in their products
wmf 1y ago
They are sort of doing this under the Secure Enclave program. "National security" chips will be fabbed by Intel.

beefnugs 1y ago

So maybe 50/50 that the top of the pyramid doesnt just take the free printed money and keep running the company into the ground. If they pass that hurdle, its more like 70/30 Dump says put backdoors into all processors, and says it loud and proud. Assuming intel is smart enough to be able to fuse that functionality out entirely (not that anyone would believe they disabled the functionality)... That leaves somewhere about 15% chance that Intel survives 5 more years

pjjpo 1y ago

> Unlike grants, equity comes at a steep cost to Intel. Transferring grants into equity therefore risks putting Intel at a cost disadvantage relative to other chip makers A lot of this article seems to rely on this point but the possible cost isn't clarified. I can understand equity arrangements affecting shareholders but how would it reduce the product's competitiveness, notably the unit cost which seems to be the point regards to other chipmakers. If it's about stock price going down, employee comp going down and product effects from that, it seems too speculative? On the flip side, it sounds like instead of cash over time it becomes a lump cash infusion, which seems like it could result in benefits of its own such as bringing forward timelines.

A4ET8a8uTh0_v2 1y ago
<< how would it reduce the product's competitiveness It wouldn't. It is an opinion piece. On that basis alone, knowing what we know about media landscape, it exists as a means of forming opinion and allowable argumentation for the issue at hand. If that premise is accepted then the piece is there to protect the poor shareholders, who until now were thinking Intel will be getting 'free' government money, but suddenly found the cost of government involvement may be higher. Suddenly, that is a bridge too far. You can grant them money, but, good heavens, think of what you will do if you demand that we give you equity of said money.. I mean.. sure WSJ intended audience, who is bound to nod on 'productivity' line of argumentation, but people with a sense of Intel history ( or most US industries that offshored and now talk reshoring for that matter ) might chuckle at the hutzpah.

dijit 1y ago

What's the old saying? It's capitalism when you're winning, and socialism if you're losing. Or: "Privatised profits, socialised losses". I understand why in this case, Intel is very much in bed with the US Government and likely makes a strong case for being a national security interest, but it feels icky.. especially as AMD is an American company too. If the issue is the node fabrication then why wasn't their an investment in Fabs before now? Intel got its big start on government grants iirc.

jimt1234 1y ago
> If capitalism is so great, then why does it need to be rescued by socialism every ten years? Not sure where I read that (I think it was some dude's Tweet), but it seems relevant here.
- fransje26 1y ago
  > Then why does it need to be rescued by socialism every ten years? Please think of the poor, poor shareholders.
- runeks 1y ago
  So the logic here is that if I take a strawberry cake and sprinkle some chocolate on it then that's proof that a chocolate cake is better than a strawberry cake?
  - barbazoo 1y ago
    Not quite I think. The logic would be that everyone says strawberry cake is the best cake there is, yet every ten years we have to dump a ton of chocolate on it to make it edible so they're asking, was it really that good to begin with?
  - gilbetron 1y ago
    No, it's proof that chocolate can be a tasty addition. Left: Capitalism isn't always perfect, sometimes social policies make a better society. Right: Capitalism is always perfect, socialism is evil even in the smallest amounts.

atoav 1y ago

I think this is one of the smaller problems the US might have right now.

miffy900 1y ago

Anyone here arguing that we should just let Intel fail in the market needs to understand that Intel is struggling right now partly because Asian nations like South Korea and Taiwan have for years subsidized their own chip making companies because they knew that in the long term, it was going to be an important strategic industry that would eventually be worth the effort and trouble. Now look where we are. Their long term strategy has paid off. Only TSMC is at the cutting edge, and Samsung is a fairly distant, but still reasonably close, secondary player. Maybe there are better ways to prop up Intel besides the government taking a stake, but losing Intel would be a huge blow to American manufacturing interests. There's been a failure of strategic vision, both at Intel and in the American government. I think as a short term measure, taking a stake isn't the worst thing the government could do at this time. Also to go off on a tangent a bit: this is one of the benefits of having a Trump-like character as President; he's clearly not beholden to any ideology and is extremely flexible when it comes to making policy decisions, even when a certain policy might be more at home with the opposing party or side of politics.

DrNosferatu 1y ago

Bernie Sanders is right: The state should get equity for the money it spent on bailouts (or other purposes). And this money should be put to work on social programs ;)

dangus 1y ago
I’m pretty sure that many of the state’s bailouts have returned equity? E.g., the government made money on the GM bailout.

th0ma5 1y ago

Socialism for corporations and the rich, kleptocracy for everyone else.

mettamage 1y ago
> Socialism for corporations and the rich Aka late stage capitalism.
petralithic 1y ago
There is nothing socialist about buying shares in a company. Workers do not control the means of production at Intel.

JimmyBuckets 1y ago

https://archive.is/hTITI https://archive.is/hTITI

ffsm8 1y ago

[flagged]

epolanski 1y ago
This level of commentary would be low level even for Reddit.
- ffsm8 1y ago
  Haha, that's true. Honestly, I wasn't expecting anyone to actually read this comment, as there were some quiet large discussions going on. I was pretty much just joking around

paulvnickerson 1y ago

You guys would love it if Obama or Biden had done it.

krapp 1y ago
Meh. You would have called it communism if Obama or Biden had done it.
- paulvnickerson 1y ago
  That's probably true lol. More specifically socialism.
mettamage 1y ago
I'm neutral in both cases actually. And last election I voted for the most left party I could find in my country.

darig 1y ago

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CyanLite2 1y ago

We have a $37 trillion dollar deficit. I think traditional government isn’t working and we need to find ways to raise revenue sooner rather than later before this spirals out of control.

throwaway173738 1y ago
We could raise corporate taxes. That would raise a lot of revenue.
ChrisLTD 1y ago
We have taxes, but the current governing coalition is opposed to raising them.
- petralithic 1y ago
  Tariffs are taxes, they are not opposed to raising them, they just won't call them "taxes." It's honestly remarkable how effective they are in reaching their policy goals, because they understand their voter base extremely clearly. They know that their voters largely go off of key words, so by changing those words, one can make them support whatever policy one wants. It is amazing to witness, really.

KingLancelot 1y ago

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SebFender 1y ago

I'm not against governments helping out companies per se in different forms but the question remains "Why are they there and what's the impact if they fall?" It's been done many times in the past decades from financial institutions, manufacturing, others and in different ways. Remember Harley-Davidson and tarifs on imported motorcycles? I think the real question becomes how will get done and for how long.

freen 1y ago

I always that the GOP was against public ownership of the Means of production? Seems awfully… communist?

phkahler 1y ago

IMHO Let Intel fail. Their fabs can be bought in bankruptcy by other chip companies that may be better run. Granted, a lot of those companies are currently fabless, but how many would change that with equipment bought at a fraction of the cost? TI, Micron, GF all have fabs. Qualcomm strikes me as a fabless that might give it a shot. I'm assuming the people and know-how would come with the fabs of course.

Night_Thastus 1y ago
There are a lot of times where I'd say a business should be allowed to fail - but this is a poor choice to do so. * You can't just spin up leading edge semiconductor manufacturing on a dime. It takes decades and hundreds of billions to reach where companies like Intel and TSMC are now. It's so hard that it's essentially impossible for new entrants to catch up. * The US has a strong interest in having local manufacturing, that no other power could take away in a time where it's needed. >a lot of those companies are currently fabless, but how many would change that with equipment bought at a fraction of the cost? Zero. Dumping the fabs on them would not help them. They're expensive and complicated to run. They don't have the knowledge to run the fab side of design (it's a joint effort on both sides to design a chip), nor the money or knowledge to improve those fabs and keep them up with the leading edge.
- florbnit 1y ago
  > You can't just spin up leading edge semiconductor manufacturing on a dime. It takes decades and hundreds of billions to reach where companies like Intel and TSMC are now. It's so hard that it's essentially impossible for new entrants to catch up. You can if intel goes bankrupt. Why do people act like a bankruptcy consists of taking all the employees out back and putting them down then setting all the buildings on fire.
  - Night_Thastus 1y ago
    It's hard to retain knowledge and processes in a bankruptcy. Even if you manage to get ALL the equipment and the people back (far, far from guaranteed) sometimes you've broken the systems that let it work in the first place. (Not that Intel's has been working particularly well, as of late)

iamleppert 1y ago

It's not as easy as "nudging, cajoling and creating incentives for major customers to diversify their supply chains and use Intel capacity". Changing out process tech isn't like changing the tires on your car for another brand. It requires, in many cases, a substantial redesign....and directly working with Intel. Why would a company support two different chip designs, for the luxury of deployment on an inferior technology platform, coupled to a troubled company that has a history of not being able to keep up or consistently deliver the latest process tech? It's a substantial, long-term investment that has wide reaching implications on the performance of your own products you are building. Who pays for that and sets up their company for failure like that? If you build on Intel, you are making a decision that exempts you from competing in the top of market for your products. Your designs will run hotter, consume more energy, have less yield, and lower clock. The design will be more complex and costly and have very little shared between other vendors. You'll need to maintain and inventory two different BOMs for a critical component, and you'll likely have subtle hardware differences or completely missing features that will require further software customization, creating even more complexity and headache to delivering a modern tech product. Hardware designs are hard enough as it is and companies don't have infinite resources or capacity. And don't count on Intel taking the lead from one of the others, giving your product a boost -- anticipate them further falling behind, or lagging behind at best. Like always, the government doesn't understand any of this and the outcome of this latest missive is going to be completely predictable.

mlyle 1y ago
> If you build on Intel, you are making a decision that exempts you from competing in the top of market for your products. Your designs will run hotter, consume more energy, have less yield, and lower clock. Most of semiconductor production is not on the leading edge. Most big SoC production is not even on the leading edge. There's a lot of room for older fabs. And the customer can demand a lower price as a result of lower yield and performance. > You'll need to maintain and inventory two different BOMs for a critical component Most of this stuff that is not on the leading edge doesn't have a "leading edge variant". Of course, I wouldn't build on Intel for other reasons: they've been terrible as a foundry and they have been changing directions seemingly weekly. That is the hurdle that you can't get over: you can't rely upon them as a partner.

caycep 1y ago

Jared Bernstein takes: https://econjared.substack.com/p/us-capitalism-with-chinese-characteristics https://econjared.substack.com/p/us-capitalism-with-chinese-... https://econjared.substack.com/p/the-usgs-intel-stakes-part-2 https://econjared.substack.com/p/the-usgs-intel-stakes-part-...

solardev 1y ago

What if we went the other direction and nationalized 100% of Intel? What would happen?

davesque 1y ago

Why wouldn't the Intel stock purchase just be effectively throwing away $9 billion? Do they think Intel is suddenly going to start running their business in a drastically different way?

thrown-0825 1y ago

America is drowning and reaching for anything to keep it afloat. I can’t wait for the AI bubble to burst, its going to be hilarious.

floppiplopp 1y ago

The US is trying CCP-style state-capitalism? Also, the glorious leader and great GOP chairman Trump gave his owners a great opportunity for insider trade. Last time be publicly bragged about it, too.

foo70 1y ago

if Intel takes government money, they will need to take a Trump family member onto the board, right?

sharts 1y ago

Let Intel fail. On a side note, though, the gov absolutely should take a stake in the entire market to and use it to both create sovereign wealth fund and a means for citizens to exercise their rights as stakeholders.