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U.S. government takes 10% stake in Intel

cnbc.com

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Re: U.S. government takes 10% stake in Intel

#81

Post by adastra22 »

bigyabai wrote: post #26
jen20 wrote: post #25

Earlier quoted context omitted.

> How does Govt picking winners and losers going to help? By ensuring that the US retains at least the ability to manufacture second tier CPUs vs complete reliance on Asia? This doesn't seem unreasonable.

The US can't employ poverty-tier labor to enable competitive margins, though. American businesses and global trade partners already largely reject Intel's foundry services.

Doesn't matter. All of the US's advanced weaponry systems now use "state of the art" electronic systems, which in the context of defense only means "not decades out of date." Two or three generations old is perfectly fine. The military does not need the latest and greatest CPUs and GPUs going into the iPhone 17 or whatever, but it does need the equivalent of the chip in the iPhone 12 or iPhone 8 or whatever for integration into next generation weapons systems.

But if all of our advanced weaponry used chips from Taiwan or Korea, for example, then the strategic implications for war in East Asia would be radically different. People are right to say that China could engage in war over Taiwan for chips, but for the wrong reasons. It's not that they want access to the fabs (they'd love it, but they're not stupid and they know the fabs and know-how would be destroyed in the war), but it would deny the US defense industry access to those fabs.

If US missiles or drones use chips from TSMC, and TSMC is in occupied territory or a war zone... the US can't make more missiles or drones. And no matter how powerful your starting position is, you can't wage war without the ability to replenish your stockpiles. It's the bitter lesson Germany learned in both world wars.

China wants hegemony in Asia, and to remove the influence of the US, Japan, and their allies within what they perceive as their exclusive sphere of influence. How to achieve that? Invade Taiwan, which eliminates western access to TSMC one way or another, effectively blockading western defense industry from the core things they need to resupply their militaries in a war. Like WW1 all over again, a "preemptive war" becomes the game-theoretic optimal outcome, and the world suffers.

How to counter that? The US and its allies need to make sure they have access to chip fabrication facilities that can produce near-state-of-the-art chips, even at inflated prices that are not commercially viable in peacetime, as well as the necessary strategic minerals like germanium and lithium. Only then does calculus swing the other way in favor of peace. Hence Biden's effort to get TSMC to build SOTA fabs in Arizona, and when that failed/stumbled, this investment in Intel.

Re: U.S. government takes 10% stake in Intel

#82

Post by tyg13 »

dmitrygr wrote: post #50

Why is this a surprise? Who do you expect to design and make chips for national security-level programs in the future wars when Taiwan is a deep crater? Every serious nation state has an arch design house and a fab. It need not be cutting edge (most militry stuff is a few gens old), but it needs to exist. Russia has Elbrus. China has Looonsoon and SMIC. Europe has ARM but is a bit behind here fab-wise. However, STMic…

The surprise is the federal government acting like an unfair negotiator, substantially altering the deal after it had already been struck. Equity in return for investment grants was never a part of CHIPS, and was only made part of it by Trump who seems to have originally wanted to kill the deal because it wasn't made by him.

Re: U.S. government takes 10% stake in Intel

#83

Post by tyg13 »

wedn3sday wrote: post #62
notepad0x90 wrote: post #42

I despite/abhor this administration and their politics, but this is a good move. There should be more privatization where national interests are involved. Instead of the ACA for example,the government could have taken a 51% stake in health insurers (forget subsidizing them, own them!) and we the voters would elect politicians to oversee health insurance instead of hoping and trusting CEOs. So many problems are caused…

I swear Im not trying to be glib or dismissive, but I honestly think you dont know what "privatization" means, this is the exact opposite.

Exactly. This amounts to a partial nationalization of Intel.

Re: U.S. government takes 10% stake in Intel

#84

Post by ac29 »

miohtama wrote: post #66
cuttothechase wrote: post #18

Genuine question- How does Govt picking winners and losers going to help? Intel is no Too big to fail Bank. Why save Intel of all chip manufacturers? Wouldnt it be like 25 years too late, with Intel and its heydays !? Would Govt now ensure parity by investing in "marquee" entities across different industrial domains?

There is only 1 winner and 1 loser: Intel. It's the only chip manufacturer "left" in the US. The argument is national security: the US expects China to invade Taiwan and this will kill TSMC in the process. Whether this will happen or not can be debated, but this is what the government expects.

> It's the only chip manufacturer "left" in the US

Global Foundries, Micron, and Texas Instruments all come to mind

Re: U.S. government takes 10% stake in Intel

#85

Post by edot »

bilsbie wrote: post #51

This sounds bad. Can someone steelman this for me so I can understand the good?

If you’re going to give taxpayer money to a for-profit company, taxpayers should receive a share of the company in return. I generally don’t like 90% of the policies we’ve got going on right now, but I actually feel okay about this one.

Re: U.S. government takes 10% stake in Intel

#86

Post by Yoofie »

miohtama wrote: post #66
cuttothechase wrote: post #18

Genuine question- How does Govt picking winners and losers going to help? Intel is no Too big to fail Bank. Why save Intel of all chip manufacturers? Wouldnt it be like 25 years too late, with Intel and its heydays !? Would Govt now ensure parity by investing in "marquee" entities across different industrial domains?

There is only 1 winner and 1 loser: Intel. It's the only chip manufacturer "left" in the US. The argument is national security: the US expects China to invade Taiwan and this will kill TSMC in the process. Whether this will happen or not can be debated, but this is what the government expects.

Texas Instruments and Microchip: Am I a joke to you?

Re: U.S. government takes 10% stake in Intel

#88

Post by eYrKEC2 »

j4hdufd8 wrote: post #67
wmf wrote: post #35

Earlier quoted context omitted.

That's extremely risky, like 100 to 1.

Sure tough business but, risky compared to what? Intel?

Yeah. Risky compared to Intel. Intel manufactures chips _right now_. They have lost their process edge, but if I have to put chips into a drone tomorrow, I'm betting on Intel rather than any bag of scrappy kids. The risk that they _can't_ produce chips is the same risk as that of Hillsboro Oregon getting carpet bombed -- which is of course not 0%.

Re: U.S. government takes 10% stake in Intel

#89

Post by foobarian »

wedn3sday wrote: post #62
notepad0x90 wrote: post #42

I despite/abhor this administration and their politics, but this is a good move. There should be more privatization where national interests are involved. Instead of the ACA for example,the government could have taken a 51% stake in health insurers (forget subsidizing them, own them!) and we the voters would elect politicians to oversee health insurance instead of hoping and trusting CEOs. So many problems are caused…

I swear Im not trying to be glib or dismissive, but I honestly think you dont know what "privatization" means, this is the exact opposite.

Maybe they mean "privately owned by the government". Which I guess is usually called nationalization

Re: U.S. government takes 10% stake in Intel

#90

Post by jongjong »

ac29 wrote: post #84
miohtama wrote: post #66

Earlier quoted context omitted.

There is only 1 winner and 1 loser: Intel. It's the only chip manufacturer "left" in the US. The argument is national security: the US expects China to invade Taiwan and this will kill TSMC in the process. Whether this will happen or not can be debated, but this is what the government expects.

> It's the only chip manufacturer "left" in the US Global Foundries, Micron, and Texas Instruments all come to mind

Yeah terrible position to be when your own government is investing in your competitors' company using your own tax dollars.

As a software engineer, this isn't an entirely new concept.

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