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US Intel

• muzylovolexandr 1y ago
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• dangus 1y ago
  > Government involvement in private business almost always ends badly. I don't say this to argue with the author or try to refute anything they are saying, but this bit toward the end is a very interesting position that I think displays the level of anti-regulation, anti-taxation, anti-government propaganda we are bombarded with by corporations. People just kind of assume that the government can't function or work with private enterprise in any way when it does that all the time. China is the elephant in the room of a counterexample. Who built the largest high speed rail network in the world and who owns them? Or how about the US military industrial complex? Or how about SpaceX? What about the time when the US government ordered factories to build Jeeps in WW2? I don't really agree with...well...anything that the current administration is doing, but owning part of Intel isn't really horrendous. The horrendous part is that it came out of nowhere with apparently no congressional appropriation of funds/approval of such an endeavor.
• rickdeckard 1y ago
  > "The single most important reason for the U.S. to own part of Intel, however, is the implicit promise that Intel Foundry is not going anywhere." If the last 8 Months of this year has shown something, it's that every decision the US takes could be considerate, but as likely also completely random and reversed and bent at any moment in the future. Accepting those risks in order to sell in the US-market (assuming it would be required) requires that the US-market also provides the commercial rewards. For now I don't see that this is secured in sufficient volume to justify such an investment, considering that it will take YEARS for Intel to actually become a viable foundry and have a customer product ready to be produced there. And I'm not even talking about the potential cost-increase vs. an established high-volume foundry...
  • 3D30497420 1y ago
    > every decision the US takes could be considerate, but as likely also completely random and reversed and bent at any moment in the future. This my main problem with this investment. I can certainly appreciate the benefit of US government investment to ensure "homegrown" production capabilities. However, this depends a lot on a level of understanding, intelligence, and planning from the US federal government which is monumentally lacking. If no one trusts Intel now, I cannot begin to imagine how anyone would view Intel plus the current US government as more trustworthy. Just look at the current approach to tariffs as a good example for how current "industrial policy" is being carried out. Unpredictable, vengeful, and declared with little plan or forethought. Why should we expect any differently from other policies?
    • rickdeckard 1y ago
      I frankly look forward to see whether the US will actually CARE how Intel will conduct its business, instead of simply trying to just reap benefits from it. Everything can for now be put under the umbrella of "US semiconductor sovereignty", but actually making this happen involves much more strategic planning and investment from the government. For example, I doubt that Intel has sufficient experience as a foundry to support design-finalization for ARM, they are JUST starting NOW with this. So who will pay for closing such gaps? Would they force e.g. Apple to use Intel as foundry and swallow all the associated cost, or would they rather accept Apple to source from a TSMC fab (which is built in US for the big customers like Apple and nVidia)
    • dpkirchner 1y ago
      Add to this the fact that given the government is now propping up a poor performing company there's no possible reason to try to create a new domestic competitor. If you do and you start becoming successful, the government can just increase their "investment" in your chief competitor and shut you down. It's ludicrous.
      • 201984 1y ago
        The point of the article was that there's never going to be a new domestic competitor. It would take hundreds of billions in investment to get off the ground and build a fab from scratch, and they'd be in an even worse position than Intel is currently. No external customer would want to risk using them, and they don't have the internal demand of x86 to keep going on their own.
• dr-detroit 1y ago
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• dwarksidle 1y ago
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  • 9dev 1y ago
    Icarus is flying high this time of year, it seems. Don't forget that some of these traditional business minds have seen the Soviet's planned economy crumble in real-time not too long ago. They may also have taken note how virtually all human-managed funds tend to do worse over time than market-driven index funds. Make of that what you will; the arrogance of some people to assume they know better than anyone else sure is stunning.
    • dwarksidle 1y ago
      > Make of that what you will; the arrogance of some people to assume they know better than anyone else sure is stunning. So you make this comment right after making a really reductive, ignorant comment on the Soviet planned economy collapse? Yeah I'm 49. I was there. Watched Soviet Union fall on live TV. Berlin wall too. After years of intentional outside effort to force it to fall. Market-driven has worked because media told everyone it has to work, and no other nations were strong enough to exert outside influence until modern China came along. Tell everyone the Soviet economy must work without outside influence to collapse it, does it still collapse? You're shipping propaganda of your culture.
      • 9dev 1y ago
        Since you felt the need to contact me with additional insights via email, I don’t want to withhold these from the wider HN community: On Tue, Aug 26, 2025 at 8:15 AM Michael E—— <m@——.xyz> wrote: https://news.ycombinator.com/item?id=45027006 https://news.ycombinator.com/item?id=45027006 I was old enough to live through the fall. What your reductive ignorance excludes is years of intentional effort by the US and allies to collapse the Soviet Union, while they censored their own media to sell capitalism and markets, while also behaving as awful as Soviets and China around the world with their military. > Make of that what you will; the arrogance of some people to assume they know better than anyone else sure is stunning. Oh, we agree on this. You of course no better because it worked for you. Survivorship and selection bias. Still at the end of the day, one of billions with no real obligation on the rest of us to provide you healthcare or give a shit if you end up in the ditch, broke. I for one appreciate the America not making me give a shit you exist. -- Michael E—— On Tue, Aug 26, 2025 at 17:17 Michael E—— <m@——.xyz> wrote: Without outside influence to collapse the Soviet union and Soviets maintaining control of their media telling their people their system must survive, does it still collapse? Rhetorical question, idgaf you even exist, ignorant ass. On Tue, Aug 26, 2025 at 18:31 Michael E—— <m@——.xyz> wrote: Won't know/show up if you end up broke in an alley eating ass to survive. That kind of not care. Thoughts and prayers but you're one of billions of meat suits, statistically irrelevant. -m Sent On Tue, Aug 26, 2025 at 19:22 Michael E—— <m@——.xyz> wrote: Aw blue language that does not venerate you. Points remain valid. -m Sent
• ModernMech 1y ago
  I don't understand how they can say Democrats are Communists while they do this. It's going to be interesting hearing everyone who spent decades spilling volumes about the evils of communism and the failure of the USSR quickly pivot to being champions of state capitalism.
  • empath75 1y ago
    I actually think the model here isn't communism, it's fascism/corporatism. They aren't nationalizing directly, they're intimidating private enterprises into compliance and cooperation.
    • baq 1y ago
      [flagged]
      • gausswho 1y ago
        The credit belongs to Laurence Britt. And this was for a poster briefly sold at the museum, not produced by it. Full text: https://secularhumanism.org/2003/03/fascism-anyone/ https://secularhumanism.org/2003/03/fascism-anyone/
        • baq 1y ago
          Thanks for the details, I was only aware of the museum bit.
      • 9dev 1y ago
        As a German with extensive exposition to the third Reich I can attest to the fact that the parallels start to become uncanny.
        • baq 1y ago
          I've been to Berlin this summer and I think every single citizen of any western democracy should see the still standing piece of the Berlin Wall and the museum bit that explains the 50 or so years that led to its construction. Even if only a quarter understood the message, we'd be better off as a civilization. Alas, I'm afraid some people would take it as an instruction manual instead of a warning.
• felipeerias 1y ago
  Is this the beginning of the US sovereign fund?
  • Telemakhos 1y ago
    That's what is being said. The Intel stake is a first step to a US sovereign fund that will include ownership stakes in many corporations.
    • slt2021 1y ago
      is merging interests of the state and corporations marks a return to good ole fascism ? or is it just an alternative way of taxing capital? instead of taxing wealth and capital, just take an equity stake in it ?
      • nyc_data_geek1 1y ago
        "Fascism should more properly be called Corporatism because it is the merger of state and corporate power.” — Benito Mussolini
        • wat10000 1y ago
          "Corporate" in that quote refers to groups consisting of something like entire industries, including employees and employers, like a guild. It doesn't refer to a business legally recognized by the state as the word is commonly used today.
        • Der_Einzige 1y ago
          But when you link evidence that hitler had secret meetings with capitalist business leaders to bankroll him, the entire mefo bill nonsense, etc to the "were nazis socialist?" argument you get downvoted.
          • qwytw 1y ago
            > "were nazis socialist?" argument you get downvoted Well it's complicated... Is China socialist? What about state capitalism in general?
• themgt 1y ago
  I’ll be honest: there is a very good chance this won’t work .... At the same time, the China concerns are real, Intel Foundry needs a guarantee of existence to even court customers, and there really is no coming back from an exit. There won’t be a startup to fill Intel’s place. The U.S. will be completely dependent on foreign companies for the most important products on earth, and while everything may seem fine for the next five, ten, or even fifteen years, the seeds of that failure will eventually sprout, just like those 2007 seeds sprouted for Intel over the last couple of years. The only difference is that the repercussions of this failure will be catastrophic not for the U.S.’s leading semiconductor company, but for the U.S. itself. Very well argued. It's such a stunning dereliction the US let things get to this point. We were doing the "pivot to Asia" over a decade ago but no one thought to find TSMC on a map and ask whether Intel was driving itself into the dirt? "For want of a nail the kingdom was lost" but in this case the nail is like your entire metallurgical industry outsourced to the territory you plan on fighting over.
  • Neywiny 1y ago
    This and everything else. We outsourced manufacturing of almost everything then are surprised when the people doing it for decades are better than we were.
    • marbro 1y ago
      We outsourced manufacturing because it's not very profitable. The Mag 7 make 50x as much money as TSMC. Apple and Microsoft are the most profitable businesses in history.
      • georgeecollins 1y ago
        Intel was very profitable until it was not. They spent over $800B on stock buybacks. That will buy you some fabs, some R&D. Its true they invested in R&D but not well. Maybe the answer was to fund an independent internal competitor to keep the org focused. Financialization is a dead end when you face a nation state determined to control steps in you value chain. How profitable will apple be if they can’t get chips?
• deleted 1y ago
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• xnx 1y ago
  Does the US need a domestic Intel more than domestic ASML (or Zeiss for that matter)?
  • jm4 1y ago
    Doubtful. It's also doubtful this is about national security, protecting strategic manufacturing or anything else to benefit American people. This is a mafia shakedown.
  • scrlk 1y ago
    The EUV light source in ASML’s lithography tools is designed and manufactured by Cymer, based on research funded by the DoE in the 1990s and conducted at various national labs.
  • klooney 1y ago
    US has ASML- lots of the patents are ultimately owned by US entities, a great deal of the research and development is done on US soil, and the Netherlands aren't rocking the boat on sanctions, etc.
  • trynumber9 1y ago
    ASML has a large factory in Wilton. & Zeiss is further away from missiles. So they're less concerned about that.
  • tick_tock_tick 1y ago
    The USA already owns the important part of ASML (the IP). ASML is a Dutch company purely at the USA's leisure.
    • ranguna 1y ago
      Care to elaborate?
• Insanity 1y ago
  To be honest, regardless of the government involvement or not, I have little hope for intel. Maybe they can, over time, have an AMD-esque comeback, but given their track record of the past few years I'm not hopeful. The Pentium -> Core2Duo was a great era for intel, but I feel like ever since then they've started a decline in both price/value proposition as well as just general hardware. The i-series was arguably pretty good for gaming, but then they started exploiting that position by having relatively poor price-to-performance, thinking they wouldn't have any competition.. and they kept the 'we are winning' mindset even while AMD was hot on their heels.
  • downrightmike 1y ago
    And Core was a lucky happenstance for Intel as they were not innovating at all and fell behind, thank goodness their isreal lab was doing something other than P4 work. Even recently, we've seen that all intel can do is increase cores and increase power consumption, and they still can't compete. This is itanium all over again, because that is how intel functions.
    • bornfreddy 1y ago
      Well, they do have N100 & co. which are very nice low power x86 devices... Not all is bad that carries their name. But the main question is can they succeed as foundry? We will see in a few years I guess.
    • Panzer04 1y ago
      This is just doomerism. Intel's current chips are "fine" and competitive with AMD chips. If anything, Intel is trying out more things than AMD is.
      • downrightmike 1y ago
        "Throw shit at the wall and see what sticks", isn't a top tier business strategy, it is desperate though.
      • simoncion 1y ago
• throw2432234 1y ago
  >ntel making decisions for political rather than commercial considerations > Intel’s board prioritizing government interests over their fiduciary duties How about Disney, Mozilla and every major corporation? You must hire right people (including this lame CEO and board), or no loans and contract for you!!! US government pushed really really hard their agenda onto ALL industries without any lube for past 40 years! If US gov actually directly express what they want, and just buy 10% of strategic company on open market, it is super refreshing!!
• keepamovin 1y ago
  Standard Silicon is a nice name. Maybe they should use it. Other possibilities: - Standard Circuit - Standard Semiconductor - Standard Microchip
  • ragazzina 1y ago
    Standard Silicon sounds really great, would be shortened to SS or StaSi..
    • keepamovin 1y ago
      I hereby appoint you National Secretary of Child Naming
• jmyeet 1y ago
  The short version is: this can work but it won't. Let me just say, for those of us who remember the 1990s and 2000s, Intel's drop off has been something nobody would've predicted. It's hard to overstate just how dominant they were (other than the fairly brief but significant Athlon64 era). And even when they were behind on consumer CPUs, which they were until the Core Duo/Centrino platform (which was really the Pentium 3) saved them from the Pentium 4 disaster, their fab ability was second to none. So what happened? Capitalism happened. More specifically, financialization happened. Everything US companies does comes down to simply cutting costs and increasing profits for short-term financial performance. There is (now) absolutely no long term thinking. CEOs get parachuted in and stay just long enough to collect a huge golden parachute before the merry-go-round continues. And who are approving these massive CEO pay packets? Other CEOs who sit on the board. We've seen this exact same thing happen with Boeing. The only things holding Boeing together are the inertia from earlier successes, the 737 type rating monopoly for budget airlines and defense contracting. Just look at the Starliner project to see Boeing actually try to build anything. An example of this financialization is the likes of Dell, Gateway, IBM, HP, Compaq, etc all started to cut costs by offshoring parts of their operations to Taiwan. At first it was just assembly and then it was certain parts (eg motherboards) and at some point they had completely funded the Taiwan PC industry and created Asus, Acer, MSI, etc. US computer manufacturers completely paid for the Taiwan PC industry by short-term profit seeking. There are multiple ways to describe China's economy but the most accurate and relevant for this topic is that it's a command economy and the coming years will show just how much more devastatingly effective this will be. Really the only thing stopping Chinese companies from destroying Western competitors is trade barriers (eg BYD). So I think the US government should take equity interests in companies they bail out rather than just giving them gifts or even loans. The government should (IMHO) also take equity stakes in any extraction companies (eg oil and gas). China shows this can work. So why won't it work here? Because the administration is both corrupt and incompetent. Everything done by the administration is to line the pockets of politicians and the wealthy on a very short-term basis. You see it in Congressional stock trades (eg buying up Intel ahead of the announcement). As for the author, I suspect he represents the American corporate view that any kind of government intervention (beyond bail outs) cannot work because they don't want that long term. It would reduce profits and/or make a few people slightly less wealthy. They spend a lot of money on propaganda to convince ordinary people that corporatism is good and collectivisim of any kind is bad, that governments aren't capable of anything, etc. All Western companies and billionaires want is public-private partnerships because they're a massive wealth transfer from the government to the wealthy. They don't want the government taking away profits from private hands.
• Xplan 1y ago
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• rich_sasha 1y ago
  I am torn on this. On the one hand, I strongly agree with this article. This kind of state ownership never brings anyhing good. I don't see how this is different. On the other, it is hard to deny how impressive the new wave of Chinese manufacturing is. No longer are they just making knock offs of Western products with stolen IP. BYD for example seems genuinely innovative, a top product. There are many other examples. Now, these are clearly not state-ran enterprises, but equally the state is heavily involved. Or, Nvidia is concerned because China can mandate that the whole country pivots to using Chinese GPUs, seemingly with no deteiment to their AI research, while amazingly benefitting their own chip production ability. I'm not sure how I reconcile these two.
  • margalabargala 1y ago
    > On the one hand, I strongly agree with this article. This kind of state ownership never brings anyhing good. I don't see how this is different. There's short term stable and long term stable. Having a BDFL can, when the BDFL is genuinely concerned with the welfare of whatever they are managing, result in something much better than what would be created if designed by committee. This is equally true for software projects and nation-states. China, Singapore, Linux, Python, etc. In the long term, having a BDFL really relies on that "B" being there, and especially when a nation state is involved, the tendency of human nature to corrupt will likely eventually take over. Basically, while China is acting with great coordination from the now with good results, they are doomed to eventually either fall to pieces when the diktat is bad, a la "Great Leap Forward", or else transition to a more stable (less authoritarian) system. They can only do things like: > China can mandate that the whole country pivots to using Chinese GPUs so many times before getting it wrong disastrously, and the longer it goes the more likely someone will get it wrong.
    • woooooo 1y ago
      They've lifted a literal billion people out of third world, no-indoor-plumbing poverty in the last 30 years. And, to the point of the article, SMIC is already doing 5nm manufacturing. Political systems are more complex than dictator/freedom, there are lots of stakeholders. The USA stakeholders tend to be short-term focused financial engineers, this is separate from whether we have checks and balances or what color tie the President wears.
• deleted 1y ago
  [deleted]
• Diog 1y ago
  To be honest, for most Chinese people, the reason we haven't taken action regarding Taiwan is not because of TSMC, but rather our patience with the current will of the Taiwan people. However, this patience has its limits. Even if TSMC has better chips now, China mainland will surpass them next 10 years. You can compare the gap in chip technology between Chinese companies in 2015 and that projected for 2025 to see this trend. As for Intel, we don't really care about it.
  • aurareturn 1y ago
    I think western media overstate TSMC's importance in China/Taiwan relationship. China doesn't care. It's a nice bonus. But ultimately, TSMC doesn't matter to China. Taiwan is ideological for China way before TSMC became important.
  • kneegerm 1y ago
    [flagged]
  • nonethewiser 1y ago
    Do you think an invasion of Taiwan brings risk of a new, worse status quo? I think that's primarily why China doesn't invade. If it were possible to just achieve an easy, total victory then there is no reason to wait for Taiwanese people to change their mind about joining China. Im also confused why you say China's inaction on Taiwan isnt about TSMC its about patience, but patience is running out because China wont need TSMC in 10 years. That seems to contradict itself.
    • roody15 1y ago
      China has no reason nor any incentive to invade Taiwan. They are moving ahead with a strategy of overwhelming force and patience. In short China will simply continue to greatly expand its Navy and overall military size. It will do so until its so overwhelming that Taiwan will simply end up voting to join back with China as it will be in its own interest. China has no need to speed this process up and can simply do exactly what it is doing now.. and just watch how things will change in the next 5-10-15 years.
• webdevver 1y ago
  for all this talk about intel struggling, they seem to be quite capable to continue producing very competitive CPUs and other IP. my understanding is that they are still doing well in the datacentre world, unless that has changed? its worth keeping in mind Intel is quite a big company... and naturally, the parts that are chugging along just fine are not going to be making headlines (or much noise at all really.)
  • etempleton 1y ago
    There is a lot of doom and gloom regarding Intel, but there are also signs of life. Intel is starting to show off products made on 18a and is slated to ship at least one product on that process this calendar year. Meanwhile TSMC has been stuck on 3nm for quite some time and it appears that there will not be a product with TSMC 2nm this year. If both of these prove true, Intel will have roughly caught up in terms of process. There is a lot more work to be done, but do not underestimate how quickly Intel's fortune can change if they manage to start hitting their mark and TSMC falters even slightly.
  • roody15 1y ago
    In my experience over the last 5 years the vast majority of companies I have worked with have moved to AMD for server purchases. Intel is not competing well on the home PC or server market in recent times at least that is what I am seeing.
    • reilly3000 1y ago
      100%. I’m seeing all of the new capacity in public clouds shift towards AMD. It’s hard to beat faster for cheaper. ARM has an even stronger value proposition, albeit with the requirement of compatibility. The switch would happen faster if there were enough equipment to go around… we switched all of our CI fleet to the latest AMD generation C4D‘s and got 36% faster builds, but had to go back a generation because GCP kept running out of boxes for us.
• bawana 1y ago
  How is this ‘equity stake’ different than nationalization? (The thing that soviet socialism did to russian property and business a hundred years ago). After all the government prints the money. So instead of just taking control of a company the govt prints the money to buy it. Isnt it the same thing? And where is the example of a successful govt run business? Why dont we encourage businesses here w free trade zones?
  • nonethewiser 1y ago
    All of these questions seem more like claims. And I largely agree in spirit. Im not a fan of the government buying stock with the money that would have been given as grants. However, >How is this ‘equity stake’ different than nationalization? Ownership scope and control. A nationalized company is owned and run by the government. This equity stake is the US buying stock in Intel instead of issuing the money as grants. I would agree this creates conflicts of interests for both parties. And that it shouldnt happen. But this is wildly different than nationalization.
  • webdevver 1y ago
    I wouldn't read too much into it. I think this is just the Trump administration buying the dip. they're gonna invest heavily into Intel to reduce TSMCs political leverage, the stock will go up 1000%, and Trumps friends & co. (& everyone who 'got the signal') get rich off it, US semiconductor industry is revived (maybe?), and everybody(?) wins. This isn't unprecedented - I think Trump really set the tone with TRUMPcoin saga, which was very wild-west. a lot of people lost money, and others got awfully wealthy in a flash. but ultimately, it was legal: both winning, and losing. Then you had Trump dipping the S&P and telling everyone "nows a great time to buy!", which IMO was even more diabolical than the trumpcoin stuff. I think the signal is clear: the concept of "securities fraud" has become the financial equivalent of arranged marriage & dowries, and in its place we welcome the "free & open market", double edged and all. hold it carefully or you'll cut yourself! like it or not it seems to be working. the wealth disparity between the US and everyone else is growing (to the US favour). I think if the US starts arguing 'youre either with us or against us', most people today will go full FOMO into the US - even the most ardent patriots will quietly shift all their assets into the US side. now we hear that Trump will allow 600k Chinese students to study in the US - has there ever been a greater inditement against the CCP? What does it say about the "Chinese Century", when their brightest minds are clamouring to get into Stanford or MIT? Pax Americana for yet another century, I'm all in.
• debo_ 1y ago
  As an aside, this guy really feels out of his depth post-pandemic. I get a lot more value out of folks writing more generally about macroeconomics.
  • evertedsphere 1y ago
    could you expand upon this?
• MangoToupe 1y ago
  Note that all our issues with china would be solved if we stopped pretending like they're our enemy.
  • Herring 1y ago
    They are a threat to American supremacy, and almost all Americans - republicans and democrats - think that supremacy is good for them. It's nearly impossible to convince them otherwise, USA#1.
  • 9cb14c1ec0 1y ago
    Oh yes, that nice warm fuzzy China that definitely doesn't speak regularly about war and conflict with the West.
    • snapcaster 1y ago
      Look the united states is incredibly bloodthirsty and in my relatively short lifetime has killed absurd quantities of people in wars of choice. China hasn't invaded anyone as far as I know. I'm not saying they won't or don't want dominance but idk why we pretend that somehow China are the warmongers
      • MangoToupe 1y ago
        I mean, to claim china isn't expansionist overlooks their extremely violent formation. That said, they haven't been very expansionist for many many hundreds of years.
  • Stephen_0xFF 1y ago
    China wants to be number one and they have a good chance of doing it. Every nation’s leaders and people want that. It affords luxury and influence. The US understandably doesn’t want to lose their spot. It also helps making this an issue to give it a sense of urgency so things can get done — be it policy or innovation. There’s some game theory in there — e.g Prisoners Dilemma. Treating them as the enemy won’t lead to the optimal result, but if the US doesn’t and they do, it will lead to the worst result for the US. History is not filled with nations singing Kumbaya. I wish it was.
• cubefox 1y ago
  Maybe it's worth noting that the new CEO's explosive statement, Intel would give up development of leading edge nodes (14A and beyond) unless they find a large external customer in advance, hardly got any attention on Hacker News or other websites. But that was almost certainly the reason the US administration got involved. This blog post thankfully makes this point clear. In the past, most people (including myself) just assumed the worst case was merely Intel selling its chip manufacturing division to some other US company which would then continue to develop new advanced nodes like 14A. But that was not at all what Lip Bu-Tan (the new Intel CEO) suggested at the earnings call. He said Intel would simply stop developing new nodes and just use the existing 18A fabs as long as there is demand. And then, presumably, closing all the fabs and fully switching to TSMC, becoming another AMD.
  • qwytw 1y ago
    > But that was almost certainly the reason the US administration got involved Now the US government can coerce Nvidia, Apple or someone to use Intel's fabs with no real political repercussions...
    • cubefox 1y ago
      They already could do that previously (with tariffs).
  • Panzer04 1y ago
    The problem with leading edge fabs is they require obscene amounts of capital to develop and are apparently (based on Intel's experience) extraordinarily risky to build. That's a hard thing to sell in any environment.
    • cubefox 1y ago
      Well it's easy to sell if you are the one currently ahead of the competition (TSMC) and very hard to sell if you are behind (Samsung, Intel).
• avidphantasm 1y ago
  Foundries aren’t the only special case. The test should be, if we can’t afford for it to fail, it shouldn’t be left to the market. Another example? Farms. Also healthcare (expect to hear more on this front in the next few years as more and more hospitals go under, especially in rural areas).
  • Gormo 1y ago
    Well, "the market" is just a descriptive model that represents the aggregated pattern of economic activity within society -- there is no "outside" of the market, and everyone, including political states, are just market participants. Arguing against things being "left to the market" in the abstract is not sufficient to address the particular incentives that are producing undesirable outcomes, and does not offer any viable mechanism for shifting those incentives. Specific proposals that attempt to operationalize what you're arguing here always seem to gravitate toward giving monopolistic power to a specific institution that invariably demonstrates that its own incentive structures are riskier than those in the broader market, and its failure modalities far more destructive.
    • aesh2Xa1 1y ago
      To add on, the fundamental question is which risk is more palatable for something we "can't afford to fail?" Is the risk of a hospital closing for purely financial reasons more or less acceptable than the risk of a state-run hospital being inefficient but guaranteed to exist? For critical infrastructure, I think that's a conversation worth having, and it's one that hand-waving about an all-encompassing 'market' obscures; dismissing a legitimate critique by framing the market as an all-encompassing force is just a rhetorical move. Your comment seems to suggest that any attempt to change the market results in unfavorable results, but this doesn't hold up to scrutiny. I think you replied with a valid philosophical point, but you leaned too much on using it to challenge that anything could be done (when you yourself presented the idea that a mechanism was needed). There is no such unmanipulated free market anywhere: Perfect Competition: In reality, we have monopolies, oligopolies, and immense barriers to entry. Perfect Rationality: Behavioral economics has thoroughly demonstrated that people do not act like perfectly rational, self-interested computers. Perfect Information: There is almost always a significant knowledge gap between a seller and a buyer. Since no truly free market exists, every economy is already a managed one. The real debate isn't whether we should intervene, but how we intervene and whose interests those interventions serve. I read selimnairb's point as that, for essential services, the rules should serve the public interest of stability and access, not just the private interest of profit. We can examine the risks case-by-case. Here, the government is investing in a foundry. We could view the leverage this gains the US government as increasing the risk for political engineering above the previous risk of financial engineering. In financial engineering, Intel might prioritize its obligation to shareholders. In political engineering (if Intel were nationalized), Intel might keep an inefficient fab open to save jobs or just to win votes. In the category of financial engineering as a risk, you might lump activity like stock buybacks put above R&D as exemplar of Intel. In fact, a criticism of CHIPS and this new government intervention often centers around the idea that Intel's leadership should not be rewarded. Finally, a related case on the topic of Intel and national security: China's state-directed economy prioritizes national goals over private profit. After entering "the market," part of its core strategy has been to compel service to national interests rather than shareholders, and it seems that strategy has arguably driven its recent economic rise.
• itissid 1y ago
  The book "Apple in China" by Patrick McGee focuses on this point in early 2000 top 5 contract manufacturers were in north america. By around 2010 the top one was foxconn which was larger than the next 4 combined. This is going to play out everywhere and result in extreme circumstances. I think the issue is not just that that its capitalism causing wage issues, its the fact that people think they can control the painless socioeconomic transition that comes with incomes increasing with matching productivity gains, or worst halt and try and reverse it. One or more things will eventually cause a pop/crash/revolution: - Endless high returns on capital: Wealth accumumlation for < top 50% of the people causes high enough inflation as these highly capitalized groups look to buy every single asset (think blank street day care and paying 200$ per month for trash disposal) to turn them into rent seeking ones. - Large debt countries moment of reckoning: At some point a black swan event leading to higher inflation with no leg room for more borrowing like 2008. Bond markets will dictate fiscal tightening and politicians will likely take control of monetary and fiscal policy ending capitalistic bedrocks for them. This will feed into the Endless high return on capital cycle. Government will bow out of every service to service the debt through taxes. - People not seeing any upward progress in their economic status or careers: Large populations find high upfront cost/headwind to enter into new economies. Failure to adapt, political choices become extreme. - Deflationary effects due to progress of china, korea, japan etc due to cost of innovation crashing: At some point large economies become advanced enough that cost of highly specialized goods exported by private companies in highly indebted countries will fall causing non dollar currencies to experience deflation and undermine reserve currencies. The only countries with leverage left would be the ones the ones with technology that is highly integrated into the society at a level that its people can rapidly change behaviors and adapt without losing wealth/landing on the street. After all you can convince a person he wasn't cheated by God/Demagogue, but you cannot convince them that they are not hungry. Some of this is already happening in fits-and-jerks motion relative to pace of progress since industrialization. Add things like climate change to the mix and you might not be able to ask "how fast?".
• sailfast 1y ago
  I’m confused. Why is equity required when the current loan guarantees were perfectly adequate? The only answer is that the USG wanted more control and leverage than was required to achieve national security objectives. Kinda negates the whole approach to the article in my opinion.
  • blueplanet200 1y ago
    Were the current loan (and grant) guarantees perfectly adequate? Citation needed. In some investors view they were not. > "The deal certainly has the appearance of the government clawing back the remaining portion of the previous grant, as the government is getting equity not previously contemplated for dollars already committed," Morgan Stanley analysts "The trade-off, in our view, is that the company will have the flexibility to optimize its own business model without commitment to public service objectives, which may or may not include foundry services at 14A as articulated on the last earnings call https://www.investopedia.com/intel-stock-keeps-getting-a-boost-from-us-investment-11796661 https://www.investopedia.com/intel-stock-keeps-getting-a-boo...
    • sailfast 1y ago
      Fair enough. In reality though they have absolutely committed to “public service objectives” which is a weird way to say “doing whatever the administration asks otherwise they rapidly liquidate their stake” Not sure how many times people will keep repeating this mistake assuming they won’t be hit up for protection money again later…
  • etempleton 1y ago
    Don't underestimate the pettiness of the current administration. They didn't like the old deal because they didn't make it. It is really as simple as that.
• jimmydoe 1y ago
  So the gist is to make Intel the Huawei but for US&A
  • snapcaster 1y ago
    The problem with that is that Huawei makes world leading products in a lot of categories and Intel's remaining dominance is slipping. I don't see how this stake impacts any of that
    • jimmydoe 1y ago
      My understanding is the piece argued state support as investor and customer might turn intel around. Huawei started with much worse product and foundation than intel, but the state sponsorship kept it going, plus they have ultra hard working people and occasionally some shameless thieves, which made them where they are.
• kube-system 1y ago
  > President Donald Trump’s announcement on Friday that the U.S. government will take a 10 percent stake in long-struggling Intel marks a dangerous turn in American industrial policy. Decades of market-oriented principles have been abandoned in favor of unprecedented government ownership of private enterprise. Really? A decade and a half ago the US government owned a 60.8% of GM and none less than Barack Obama was directing management changes. The US has a long and well established history of being a mixed-market economy to varying degrees.
  • cheema33 1y ago
    > Really? A decade and a half ago the US government owned a 60.8% of GM and none less than Barack Obama was directing management changes. Did US govt. actually had an ownership stake in GM? Please provide some links to this effect.
    • kube-system 1y ago
      Yes, along with a number of other US companies. This was done to stabilize the economy in the wake of the 2008 economic crisis. It was a very hot political topic at the time. https://www.politico.com/story/2009/05/obama-reluctant-shareholder-in-gm-023165 https://www.politico.com/story/2009/05/obama-reluctant-share... https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program
    • BeetleB 1y ago
      They also owned AIG insurance. Probably some other companies as well.
• monknomo 1y ago
  the president unilaterally extorting 10% ownership out of a company isn't going to build the kind of system that competes with anyone. Big business can't really thrive under this kind of thing any more than corner stores can thrive under a protection racket.
  • AnimalMuppet 1y ago
    Didn't the US pay $9.8 billion? Intel's market cap is $106 billion, so $9.8 billion for 10% is buying at a slight discount. If that data is correct, how did the US "extort" ownership? Look, I'm as terrified of Trump's overreach as the next guy. I could easily see him extorting partial ownership of companies. But I don't see this as being that. Can you make a convincing argument otherwise?
    • AnIrishDuck 1y ago
      What was the legal basis for this "purchase"? Because as I understand it, Trump came in, saw a law he didn't like (CHIPS), and unilaterally "altered the deal" I don't think it's fair to characterize this as some kind of standard stock sale, as the terms were never set out as such from the start. (And to be fair, there are lots of valid criticisms of CHIPS) Instead, funding was voted for by Congress... and then a third party came in, threatened to kill it on a dubious legal basis, and extracted protection money (well, shares). That's textbook extortion.
    • davedx 1y ago
      It was a grant (free money). Then the terms were (mostly) unilaterally changed to be an equity investment. Right?
      • BeetleB 1y ago
        It was because Intel likely wasn't going to get the rest of the grant money, because Lip-Bu Tan openly told the world he won't develop 14A without commitments from customers. If Intel is going to cease semiconductor development, then why should they get the rest of the taxpayer money? Even under Biden and Pat Gelsinger, the government was signaling to Intel that they may not get the full money if they don't make progress.
• nonethewiser 1y ago
  This article says its steel-manning the equity stake but its actually an argument for Intel being "too big to fail" and then conflating that with an equity stake. I do find his argument for Intel being "too big to fail" compelling, for whatever it's worth. But it was kind of surprising to only see 1 sentence at the end claiming the equity stake is necessary. I thought we were actually going to get an analysis on the deal and the dynamic it would create.
• skmurphy 1y ago
  Key graf: "The problem facing the U.S. is not simply the short-term: the real problems will arise in the 2030s and beyond. Semiconductor manufacturing decision-making does not require nimbleness; it requires gravity and the knowledge that abandoning the leading edge entails never regaining it."
• yndoendo 1y ago
  Intel is dead to me for capitulating to narcissistic, authoritarian, inhuman, apathetical Donald Trump. There is no one in the Trump administrator that has the balls to tell Donald Trump he is and idiot and doesn't know what he is talking about. Intel will bend over backwards and fail because of this mentality. Donald Trump knows better than all the engineers at Intel according to his followers. Just like when stated he knows more about dish washers than anyone else in the world. Intel will need to hide the actual course their are taking to actual product a viable solution. This scenario seems to mirror the development of the MP43/MP44. Government was against it because the administration was too dumb to understand it. Government will also like short versus long term gains because the short gains allow for quick propaganda usage.
• dehrmann 1y ago
  It would have been more effective to pay Micron to build up the capabilities to be a general-purpose fab to compete with TSMC.
  • deleted 1y ago
    [deleted]
• onetimeusename 1y ago
  The other day when the US's stake in Intel was announced, people assumed it was a political stunt. I suspected it was because of national security interests. The CHIPS act probably didn't get the result US Defense wanted quickly enough. Some details that were glossed over include that there was a chip shortage a few years ago as a result of COVID and TSMC supply chain disruptions that led to a shortage in electronics and automobiles even. This started to look like a national security interest back then. Second, there is an AI race going on. US intelligence is taking it very seriously and views supremacy of our AI as very important. Recently, the US was pushing NVDA to start using Intel's foundry. I assume it's for national security reasons. Finally, a couple of details from the Intel deal that were not widely discussed is that the US is taking a passive seat[1] The government’s investment in Intel will be a passive ownership, with no Board representation or other governance or information rights. The government also agrees to vote with the Company’s Board of Directors on matters requiring shareholder approval, with limited exceptions. There are also warrants being given whose status is based on Intel's foundry. That suggests the foundry was the interest all along. [1]: https://www.intc.com/news-events/press-releases/detail/1748/intel-and-trump-administration-reach-historic-agreement-to https://www.intc.com/news-events/press-releases/detail/1748/...
  • bigyabai 1y ago
    > Recently, the US was pushing NVDA to start using Intel's foundry. I assume it's for national security reasons. The real reason is simple, if you've been following IFS: Intel's foundry has no large customers. The free market has spoken and almost every single customer prefers TSMC or Samsung silicon. America was boxed-out of serious world-class chip manufacturing ever since Intel swerved on EULV. If it was for natsec reasons then I doubt the fed would waste their time taking a passive seat when they could claim Intel as eminent domain. It's not about national security whatsoever; this is part of a last-ditch effort to force Apple and Nvidia to buy American silicon.
    • nine_k 1y ago
      But NVidia chips are now part of national security, I suppose.
• cameldrv 1y ago
  I think that the difficulty for Intel is that they don't seem to attract the best talent anymore like they did 20 years ago. A big part of the job of running a leading edge fab is solving a lot of very tricky technical problems, and a lot less of those people work at Intel than used to. There are feedback loops in these things. The top people want to work with other top people. To some degree you can try to find those people and just offer them tons of money, which is what seemingly happened with Jim Keller (on the logic rather than the fab side, but still), but then he went and quit shortly thereafter. Without the right people at the company, you can dump almost infinite money at a problem and still not solve it.
• neves 1y ago
  Mariana Mazzucato has been doing a good case for it: https://www.ted.com/talks/mariana_mazzucato_government_investor_risk_taker_innovator https://www.ted.com/talks/mariana_mazzucato_government_inves...
• BenFranklin100 1y ago
  You know, we can just provide critical industries with direct assistance in the form of subsidies. There’s no need for the US government to take an equity stake. Nationalizing companies - and that is essentially what we’re starting with Intel - worked out horribly for the Brits last century.
• rdw 1y ago
  "We should do something to preserve leading-edge chip manufacturing in the US. This is Something, therefore we should do it."
• deleted 1y ago
  [deleted]
• Agingcoder 1y ago
  I’m not sure why what he's saying is so outlandish to many ( at least to some of the papers he’s quoting ): we’re in a world which looks increasingly like the cold war all over again, and my immediate reaction when I saw the headline was ‘ah yes China this makes sense’. We’re not talking private capital - it’s national interests being pushed, for long term reasons, and probably a bit late. Now I’m European so this seems obvious to me, coming from a culture of high government intervention but I might be very wrong!
  • jajko 1y ago
    The underlying logic is flawed though, there is no deeper action plan since they will still have 0 control over the company and any of its bigger decisions. Also nobody buys from Intel foundries, and for good reasons, this won't change any of that. We have already seen some pretty blatant insider trading moves from current government, so I wouldn't rule that one out. But its probably way more petty - chips and manufactured war with China is all the rage in media, we all still remember covid situation, so its an easy area to get some political points, while spending other's money. Most European government interventions, like French literally taking ownership of their common car manufacturers aren't considered any sort of success story to emulate after.
• simne 1y ago
  I really wonder, why so much noise about this case. I agree, semiconductors are extremely important in current world, but did you know, Volkswagen AG is partially owned by State of Lower Saxony (~ 11.8%)? Also worth to remember cases of Rolls-Royce, Ericsson, and some other unfortunate Western companies, important for many humans, but once became unable to stay economically viable. (BTW it make me laugh, when I got info, Bentley now under WAG, when RR under BMW, as technically, they many decades was one entity) WAG case is different from Intel case (and other I mention), but there are also many similarities, because of which I think, Intel case may be special for US, but is not too special for West. And I think, such cases are bad, they are great shame, but also they are signs, we must do something, to make Western produced semiconductors more competitive. https://en.wikipedia.org/wiki/Volkswagen_Group https://en.wikipedia.org/wiki/Volkswagen_Group
  • kingkongjaffa 1y ago
    I'm confused why you mentioned Rolls-Royce and then in relation to BMW. The government intervention of RR was nothing to do with the cars. The original Rolls-Royce company, which included the car division, was nationalized by the British government in 1971 due to financial issues with its aerospace business. The car division was separated in 1973. The parent company, Rolls-Royce plc (nothing to do with cars), was sold to the public in a share offering in 1987, meaning it was no longer government-owned. In 1998, BMW purchased Rolls-Royce Motor Cars.
    • simne 1y ago
      > I'm confused ... > The original Rolls-Royce company ...due to financial issues with its aerospace business. Well, it is because you do not understand economy of business. Unfortunately, main goal of any business is to be viable, not mean profitable, just be good enough to pay expenses need to run things defined as goals. By definition, ALL old automotive companies started as hybrids - car division to make profits and motors division to make use of outstanding knowledge gathered when making consumer cars (as highest technology of that time). There are nearly no exceptions - Daimler began as Daimler plus Maybach; BMW began as motorized vehicles garages production plus motors business; Renault began as aviation motors business, made automobiles to make additional cash. When Rolls-Royce divided to aerospace motors and cars, it was already semi-dead business, because their aerospace behavior was non-viable without donations from car division. To be exact, I don't mean, aerospace impossible to be viable, just RR was. And returning to our ontopic, Intel was caught in same hole - they lost their superiority and cannot survive without external help, absolutely as RR business.
• Liwink 1y ago
  The investment from Nvidia, instead of the government, would give Intel a better chance to survive.
• epolanski 1y ago
  If semiconductors are so vital to US military, the US military should invest in research to build them on their own.
• epolanski 1y ago
  OT: am I the only one who thinks booting Gelsinger was a huge mistake? Semiconductor business is not one you steer in few years, everything is planned years ahead and he had the right ideas imho.
• tonymet 1y ago
  I guess we just forgot about the US bailout of the big-3 auto manufacturers
• 2OEH8eoCRo0 1y ago
  > Intel fell behind TSMC, who was powered by massive orders from Apple in particular > the China concerns are real, Intel Foundry needs a guarantee of existence to even court customers, and there really is no coming back from an exit. There won’t be a startup to fill Intel’s place. The U.S. will be completely dependent on foreign companies for the most important products on earth, and while everything may seem fine for the next five, ten, or even fifteen years, the seeds of that failure will eventually sprout, just like those 2007 seeds sprouted for Intel over the last couple of years. The only difference is that the repercussions of this failure will be catastrophic not for the U.S.’s leading semiconductor company, but for the U.S. itself.
• hshdhdhj4444 1y ago
  I didn’t realize steelmanning requires strawmanning the opposing view. A 10% stake does what? Nothing. The U.S. doesn’t even get decision making capabilities. OTOH, the CHIPS Act created an incredible amount of semiconductor manufacturing capacity from a wide variety of manufacturers including both TSMC and Intel. So the real question is what does getting a 10% stake do, that the CHIPS act which Trump is trying to retroactively destroy, isn’t doing much better?
• kjkjadksj 1y ago
  If the US did go all the way with 100% ownership, would that even be a bad thing? American companies would have access to cutting edge chips which would presumably be able to be sold near cost at least on the domestic vs export market. No where on earth would be able to offer as competitive a margin. Innovation in so many categories would be spurred and would happen stateside.
• throw67 1y ago
  Another reason not to buy Intel chips
• superb-owl 1y ago
  Honestly the fact that we don’t have a sovereign wealth fund invested in US equities is just silly. I get that you don’t want too much central interference in the economy but it feels like leaving money on the table
  • ipnon 1y ago
    It's pretty funny to talk about central interference when the federal government already has a monopoly on monetary policy.
  • blitzar 1y ago
    Its silly I don't have a multi billion dollar trust fund. Unfortunately you need wealth to have a wealth fund.
• 999900000999 1y ago
  I'm not an expert, but I would of vastly preferred a fund to start a bunch of smaller fab companies. Most systems don't need start of the art processors. Get some minimal fabs set up for RISC V chips. If we removed the profit motive, how much does this cost ? Alternatively... Even a refurbished GameCube can probably run a basic rest API server. If anything we have enough EWaste that we can probably just recycle what we have. At least for most applications.
  • high_na_euv 1y ago
    But what's the point of that? There are smaller fabs already
  • ronsor 1y ago
    My ideal situation is one where anyone can fab simple processors at home the same way you can 3D print almost any small object with under $5000 in total expenses. Unfortunately that seems far away.
    • 999900000999 1y ago
      I imagine if you could get it under a million, it enters the extreme higher end of the hobbyist range. Not like everyone can personally design a chip anyway, but if a small city has at least one fab it can be something in an emergency situation. Recycling is probably a better solution here thought.
    • reilly3000 1y ago
      Try watching DYI CPU videos on YouTube. It’s VERY far away.
• diddid 1y ago
  [flagged]
  • samuraijack 1y ago
    [flagged]
    • tomhow 1y ago
      Please don't reply to a bad comment with another bad comment. You can just flag comments like this and move on.
  • tomhow 1y ago
    Eschew flamebait. Avoid generic tangents. Omit internet tropes. Please don't use Hacker News for political or ideological battle. It tramples curiosity. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
    • diddid 1y ago
      To have a conversation about the US government buying a stake in Intel, and the threats of China in that space, requires one to have a conversation about both politics and ideology. It’s disingenuous to claim anything else. And to point out the irony of the passing fad on straws but deep love of fast fashion highlights the hypocrisy of US society in general and why we are incapable of having nice things or getting anything meaningful done at a scale of other countries such as China, Taiwan or even South Korea. And love or hate DEI you also can’t say companies like Target jump on and off that band wagon at shareholder will, when they aren’t ever jumping on the “we should invest in R&D and the next generation” because why would they, we haven’t asked them to so why would any other company Intel included.
      • tomhow 1y ago
        The purpose of HN is to discuss things in the spirit of intellectual curiosity. To respond to an article about chip manufacturing with such a generic ideological flamebait line as "You can’t build a foundry on DEI, but you can feel good about yourself as you virtue signal about straws as you buy fast fashion" is the opposite of intellectual curious discussion. If the topics of DEI, straws and fast fashion are mentioned in the article or are relevant to the content of the article, sure, write them into the comment in a way that is relevant to the content of the article. The way you've invoked these themes, without any clear relevance to the article's content, is just what we're trying to avoid on HN. This is not new or difficult; the guidelines have been in place for many years and make it clear what we're trying for here.
• silverliver 1y ago
  This was always going to be the logical conclusion to US hostile policy regarding the the proliferation of IC fabrication. The US, not cost, was the primary factor that discouraged many countries from pursuing their own IC fabrication capabilities. Had they not been so hostile, many countries would have had enough capacity to cover for the US until it rebooted its own industry. This is also the same trap that China is barrelling into right now and they will absolutely find themselves in the same position eventually.
• grues-dinner 1y ago
  > TSMC’s foundries — and Samsung’s — are within easy reach... To be honest, every foundry is in easy reach of something that can take it out. If there's a conflict that results in missiles hitting Korean factories, someone will be drone-bombing the power interconnects or driving trucks into water purifiers or whatever and taking out foundries in Texas. It doesn't take much to ruin semiconductor foundry throughput. Wafers spend weeks or even months progressing from stage to stage. If you can cause a power failure, for example, you can scrap the whole content of the line and there will be no output until the pipeline refills: https://www.forbes.com/sites/tomcoughlin/2019/07/05/nand-fab-power-loss-and-1-tb-tlc-128-layer-flash/ https://www.forbes.com/sites/tomcoughlin/2019/07/05/nand-fab... Perhaps process robustness is better now, but in the constant scrambling state of semiconductor manufacturing, I doubt it is better enough to be able to shrug off concerted, deliberate attacks rather than just accidents, fuckups and bad luck.
• TacticalCoder 1y ago
  [dead]