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Intel might be too big to fail

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Re: Intel might be too big to fail

#161

Post by talldayo »

toast0 wrote: post #115
talldayo wrote: post #28

Earlier quoted context omitted.

At least in Intel's case, I can see why the US government wouldn't want to get rid of them. For one, Intel is a defense asset and there will generally be apprehension of letting them slip under without the feds gutting what they want out of it. For two, I kinda think Intel did everything right from a US nationalism perspective even if their customers ditched them for it. Intel was never going to keep their Apple cont…

> Intel was never going to keep their Apple contract unless they outsourced to TSMC, abandoned any form of profitable margins and gave up on domestic chipmaking. Intel switching to TSMC probably would have sidestepped their 10nm fab failures, and the resulting design pipeline bubble that meant a lot of stagnation after Kaby Lake instead of the tick/tock(/tock) cycle of sort of annual improvements. But, even if Intel…

> Intel switching to TSMC probably would have sidestepped their 10nm fab failures

It would, but it would also drain a lot of investor confidence. Intel pulling the TSMC card in 2024 is acceptable, or even desirable, from a shareholder perspective. Doing it in 2017 would have been jaw-dropping, even if it came with the advantages of TSMC 7nm that AMD's mobile chipsets boasted. It might have been the right call, but it would be a kick in the pants to their fab business and a terrible omen of things to come.

> But, even if Intel was still doing its thing right, Apple prefers to vertically integrate

100% agree, and I feel like it's more to my point. Intel was a holdover from an era where Apple had to ditch their reliance on PowerPC. Buying pre-designed chips was an opportunistic success story on a high-margin product like the Mac, and it worked both ways until Apple started designing their own cores. Once Apple could ship an SOC that outperformed Intel, it didn't matter how much it cost to make because there was no middleman to pay. By any means necessary, undercutting Intel was a business imperative for Apple.

I guess the ultimate irony of this is how I hear people begging OEMs to license ARM tech for PCs now. Intel failed as a rent-seeking middleman for high-performance core designs, so now they will be supplanted by Arm, a rent-seeking middleman for low-performance core designs. All Arm Holdings has to do now is buy a fab and they'll be a dead ringer.

Re: Intel might be too big to fail

#162

Post by disgruntledphd2 »

matwood wrote: post #147
toast0 wrote: post #122

Earlier quoted context omitted.

Buybacks are just dividends with better tax implications that somehow make people angry. Companies historically are expected to pay dividends, at least when their business is doing well. Business at Intel was doing well for most of 1990-2017. There was some time after the Pentium 4 stopped scaling before the Pentium 4M offered a recovery, and the Itanium mess; but overall pretty good until 2017.

> Buybacks are just dividends with better tax implications that somehow make people angry. Yeah, buybacks are the new boogieman. Let me decide when to take the tax hit on an investment and not be forced.

Ok so I prefer dividends as I think that they encourage better behavior on the part of both investors and companies.

I think that buybacks definitely create a massive conflict of interest for C levels remunerated based on share price or EPS, and I dislike that I must sell to realize any gains. But perhaps this is a niche position .

Re: Intel might be too big to fail

#163

Post by paulddraper »

commandar wrote: post #79
stego-tech wrote: post #19

Earlier quoted context omitted.

Literally my same conclusion since 2008. Hundreds of thousands of people without jobs? Let it fail. No more domestic semiconductor company? Let it fail. No more domestic aerospace company? LET IT FAIL. We keep avoiding making the hard policy decisions by funneling taxpayer money into the hands of the already-wealthy who promise that this time it’ll be different, this time they won’t give it to shareholders and payout…

The option is not a binary between "let it fail" and "no strings attached bailout." If things get bad enough for Intel, the precedent that makes the most sense is to follow the model that was used with GM: the company enters bankruptcy, existing investors and creditors are wiped out, and a new corporate entity backed by the fed.gov steps in and assumes the assets and operations of the company. Once things have suffic…

Are using GM as a SUCCESS story?

Haven't seen that before.

Re: Intel might be too big to fail

#164

Post by asnerdian »

exabrial wrote: post #9

Awesome, I can't wait for me the taxpayer to breathe life into the smoldering shell of a company where the executives and unlimited layers of useless middle management used financial engineering to fool investors about the internal situation while extracting as much money as possible and then bailing out on golden parachutes and landing in soft thick piles of bonuses. Remember when we did this in 2008 under the Obama…

[dead]

Re: Intel might be too big to fail

#165

Post by ninetyninenine »

undersuit wrote: post #151
ninetyninenine wrote: post #75

Earlier quoted context omitted.

Look at the military industrial complex. Nationalizing intel will turn it into the semiconductor industrial complex.

The US military industrial complex isn't nationalized.

It is.

But if you want to be pedantic it’s both nationalized and private. It depends on whether you’re referring to the military or industry.

When you create these hybrids of business and government, corruption is inevitable.

Re: Intel might be too big to fail

#166

Post by _boffin_ »

weebull wrote: post #160
stego-tech wrote: post #19

Earlier quoted context omitted.

Literally my same conclusion since 2008. Hundreds of thousands of people without jobs? Let it fail. No more domestic semiconductor company? Let it fail. No more domestic aerospace company? LET IT FAIL. We keep avoiding making the hard policy decisions by funneling taxpayer money into the hands of the already-wealthy who promise that this time it’ll be different, this time they won’t give it to shareholders and payout…

If it dies, hundreds of companies will rise from it's ashes. One of the big problems America has is the tech giants hoovering up all competition. The 70s,80s and 90s weren't boom times because of the fact these tech giants got their break at that time. It's because the market still had 5-7 major semiconductor companies. Fairchild, Motorola, TI, Intel, Zilog, and that's without really thinking about it.

My following question isn’t meant to be snarky or anything besides inquisitive.

Question: what about if the thing they’re worried about isn’t about letting it fail, but rather geopolitical and military risk? Could the lead time to get the new companies up and running to fill In the gap be too long for them to not consider it too big of a risk of letting them fail?

Re: Intel might be too big to fail

#167

Post by undersuit »

ninetyninenine wrote: post #165
undersuit wrote: post #151

Earlier quoted context omitted.

The US military industrial complex isn't nationalized.

It is. But if you want to be pedantic it’s both nationalized and private. It depends on whether you’re referring to the military or industry. When you create these hybrids of business and government, corruption is inevitable.

If I was referring to the military I wouldn't have answered.

Re: Intel might be too big to fail

#168

Post by s1artibartfast »

PopePompus wrote: post #100
commandar wrote: post #79

Earlier quoted context omitted.

The option is not a binary between "let it fail" and "no strings attached bailout." If things get bad enough for Intel, the precedent that makes the most sense is to follow the model that was used with GM: the company enters bankruptcy, existing investors and creditors are wiped out, and a new corporate entity backed by the fed.gov steps in and assumes the assets and operations of the company. Once things have suffic…

It's not just the investors and creditors that need to be wiped out. Above all else the managers need to be fired, with no bonuses or golden parachutes.

Making the investors live with market consequences is the only way to hold managers accountable for performance.

Everyone wants better management, but it wont magically solve itself. Those with the power to drive that change need to have an incentive to do so.

Re: Intel might be too big to fail

#169

Post by orev »

wg0 wrote: post #25

On a tangent, why there is a general feeling of decline everywhere from Adobe's frustrated customer base to Boeing to Intel and Google's search returning pages and pages of sponsored ads? What's happening?

It’s caused by Wall St’s need to see constant growth, which becomes cancerous once a company has completely dominated its global market. The company is forced to squeeze existing customers once it’s no longer possible to find new ones (because the pool of all possible customers has already been converted to actual customers).

Re: Intel might be too big to fail

#170

Post by dahart »

matwood wrote: post #143
dahart wrote: post #124

Earlier quoted context omitted.

Poverty has indeed been decreasing most places, but your framing is very misleading. Half of the people on earth still live on less than $7/day in 2017 PPP dollars, and they are not universally connected or supercomputing. Over 8% of the global population is still below the $2.15/day PPP threshold that defines “extreme poverty”, which means it’s not enough money to purchase enough food to survive, literally still dyi…

I'm not disagreeing with you that people are definitely struggling, but it's hard to see numbers like what you present w/o also numbers on what it cost to live per day. Is it an extreme case of CA vs WV or is it like someone making $7/day living in CA?

This isn’t primarily the US, this is global extreme poverty, and right now for example, it’s bad in Southern Asia, and sub-Saharan Africa, among one or two other places the UN & World Bank talk about.

> w/o also numbers on what it cost to live per day.

This is what “PPP” is all about, that’s referring to a normalized purchasing power parity that is specifically designed to help you understand what $7/day actually means: it means what you think it does, and it is supposed to compare directly to the amount of money it costs you to feed yourself every day.

https://en.wikipedia.org/wiki/Purchasing_power_parity

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