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Intel to Receive $8.5B in Grants to Build Chip Plants

nytimes.com

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Re: Intel to Receive $8.5B in Grants to Build Chip Plants

#321

Post by dheera »

JonChesterfield wrote: post #311
xyst wrote: post #292

Something about giving a multibillion dollar company government grants rubs me the wrong way. Most of the money probably goes into hiring useless consulting firms to “do the leg work”.

Nah, this is intel. They'll spend it on a dividend.

Dividends don't make you any money because the rest of the passive-aggressive investors downvote the stock price by exactly the dividend amount when dividends are given.

If everyone agreed to maintain the stock price when dividends were issued, the dividends would be useful.

Re: Intel to Receive $8.5B in Grants to Build Chip Plants

#322

Post by chiefalchemist »

rhelz wrote: post #269
chiefalchemist wrote: post #254

Earlier quoted context omitted.

Fair enough. But then the question is: How did this happen in the first place? If the Pentagon is playing out scenerio after scenerio after scenerio, how did we allow ourselves to be so embarrassingly venerable? And now the taxpayer is on the hook for $8.5B and growing? There's a certain smell to all this.

> How did this happen in the first place? By not pursuing protectionist public policies. > the taxpayer is on the hook for $8.5B $8.5B is a big price tag, but whether the government should spend it or not depends on whether or not the investment pays off.

> By not pursuing protectionist public policies.

Perhaps. But the more likely correct answer is: The MIC doesn't make chips. They couldn't and wouldn't push for something that didn't deepen their pockets.

Re: Intel to Receive $8.5B in Grants to Build Chip Plants

#323

Post by chiefalchemist »

HarHarVeryFunny wrote: post #308
rhelz wrote: post #299

Earlier quoted context omitted.

> Intel at the time wasn't interested in fabing ARM chips, and the rest is history. Fun fact, in the late 90's, Intel was the biggest manufacturer of ARM chips. I was there at the time, and I wrote lots of software to aid in their design. What happened to Intel was twofold: The first problem was that Robert Noyce, Andy Grove, And Gordon Moore died. Each one was a once-in-century intellect, and it took Intel a while t…

It seems that what happened to Intel was a lot worse than just missing Andy Grove's paranoia... - They missed the mobile market - They missed the gaming market - They missed the AI/ML market - They got multiple generations behind TSMC and Samsung in the fab business - They lost a whole bunch of market share to AMD, including datacenter The NY Times article is paywalled, so I can't read it, but I have to wonder what k…

When you connect those dots this feels more like a pseudo bailout in disguise.

Re: Intel to Receive $8.5B in Grants to Build Chip Plants

#324

Post by randerson »

timmg wrote: post #259
btbuildem wrote: post #244

Earlier quoted context omitted.

I ask again, who are these "shareholders" and why do we continue to play along with this monumental scam?

How do you think companies should work? If they all re-invested all their earnings into growth, wouldn't that mean that every company is growing un-sustainably? And what is the incentive for investors to fund these companies that never return anything to the investors?

Reinvesting in growth seems more sustainable than extracting all value until the company can't even keep up with its newer competitors.

There's surely a middle ground where a company should return _excess_ profits to shareholders when they're doing well. Intel was too busy paying out hundreds of billions to notice that Apple/TSMC/ARM/AMD/NVIDIA were eating their lunch.

Re: Intel to Receive $8.5B in Grants to Build Chip Plants

#325

Post by Raydovsky »

rhelz wrote: post #132

WRT to lack of a skilled workforce, here is an interesting anecdote. I remember back in the late 90's, Intel had to fire most line workers in their FABS, and hire people with Ph.D.'s in solid-state physics. I actually knew one of these people who were fired: She was our housecleaner. And--like the supper-smart garbage man of the Dilbert Cartoons, she was very smart. Smarter than me. I know because she helped me solve…

IIRC The original chips act had a provision that companies would have to train and hire X% of non-white/non-asian engineers.

Re: Intel to Receive $8.5B in Grants to Build Chip Plants

#328

Post by ramblenode »

gamepsys wrote: post #224
lenerdenator wrote: post #154

Earlier quoted context omitted.

The goal of a corporation is to generate value for shareholders, and we don't give any incentives for them to do otherwise.

Corporations should only return cash to investors (via dividend or stock buyback) if they do not have a high yield way to invest the money internally. A large stock buyback is the corporation admitting they do not have good uses for the cash. If Intel would take these grants, tax credits, and low interest loans and turn around and increase their dividend or do a large stock buyback then this would be a simple wealth…

> Corporations should only return cash to investors (via dividend or stock buyback) if they do not have a high yield way to invest the money internally.

*It should be noted that this is true due to the tax code rather than some underlying economic principle. Dividends are taxable whereas reinvesting is a tax deduction.

Re: Intel to Receive $8.5B in Grants to Build Chip Plants

#329

Post by randerson »

tgma wrote: post #270
randerson wrote: post #115

Intel could have funded this themselves many times over if they'd reinvested their profits instead of paying huge buybacks and dividends.

Intel could have (and has) funded building fabs themselves, but if we are advocating for a free market solution, why would they build it in the US vs somewhere cheaper? Forcing their hand to do it inside the US does not seem like a fair free market solution either. There has to be either a carrot (subsidy), or a stick (tarriffs and embargoes) to nudge them to bring it back home; neither is a clean free-market solutio…

I just question whether the government is backing the right horse. Intel has been losing market share in every segment for years despite once having everything in their favor: a head start, a strong brand, mountains of cash. They failed to capture the mobile phone and tablet market altogether. And the govt thinks Intel can make AI chips that compete with Nvidia?

Re: Intel to Receive $8.5B in Grants to Build Chip Plants

#330

Post by BeetleB »

shortsunblack wrote: post #291
BeetleB wrote: post #56

Earlier quoted context omitted.

The new CEO banned buybacks. I never understood the anti-dividend and anti-buyback mindset. I've given quite a bit of money to partially own a business (and I don't mean publicly traded shares, but literally buy a portion of a business). I have an agreement with the operator that I'll get N% of proceeds (as long as the business can handle that percentage). Are you saying that I, as an owner, am not entitled to it? Th…

Buybacks and dividends are not the same thing. Buybacks get preferential tax treatment and are in their entirety manipulative (that's why they were banned under SEC rules until Reagan deregulated capital markets) to the market it serves. Dividends are predictable, have a consistent rate across the years and are pretty much impossible to game the market with, as they return value to shareholders over a longer time per…

> Buybacks and dividends are not the same thing. Buybacks get preferential tax treatment and are in their entirety manipulative

OK - answer me this. How can a publicly traded company buy more of its own shares (i.e. to get a higher ownership stake)? Or even buy them because they believe they are undervalued?

> Dividends are predictable, have a consistent rate across the years

Except this is not true. A company decides each quarter how much dividend to pay out. There's usually nothing preventing them from saying "Nah, sorry."

We all know plenty of companies that simply don't pay dividends, no matter how profitable.

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