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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

#601

Post by BeetleB »

cududa wrote: post #517
BeetleB wrote: post #509

Earlier quoted context omitted.

Why does this keep coming up? They're paying the rest of the CHIPS Act money. Overall, they're putting in over $10B into Intel.

Where in the bill passed by Congress does it say taking funds entitles the government to 10% of the company 3 years after the fact?

> company 3 years after the fact?

Intel hasn't gotten most of the money they were awarded. Even the Biden administration were hesitant in doling it out, because of concerns that Intel could deliver. That's why out of frustration, the previous CEO became vocal in saying "We still haven't gotten any money yet!" and was openly frustrated about it.

Lip-Bu Tan, in the last quarterly earnings signaled a decent likelihood of not developing 14A (and thus halting much of the semiconductor infrastructure they implied they would need the CHIPS money for). So it's perfectly fair for the government to say "We're not giving you the rest of the money."

What this deal does is release the rest of the money, but with strings attached.

There were always strings attached - even with the prior administration. The strings have merely changed, and Intel benefits by actually getting the money now vs a long drawn out process.

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

#602

Post by BeetleB »

re-thc wrote: post #545
BeetleB wrote: post #509

Earlier quoted context omitted.

Why does this keep coming up? They're paying the rest of the CHIPS Act money. Overall, they're putting in over $10B into Intel.

> They're paying the rest of the CHIPS Act money. Overall, they're putting in over $10B into Intel. So taking a scholarship means you're giving a % of yourself to the school? Was this ever mentioned when Intel signed up? Did you know about it?

> So taking a scholarship means you're giving a % of yourself to the school?

> Was this ever mentioned when Intel signed up? Did you know about it?

See my other comment:

https://news.ycombinator.com/item?id=44993388

The main point is that even with the prior administration, it wasn't a given Intel would receive all the money. This way, they get the full amount, and fast.

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

#603

Post by cyberax »

ivewonyoung wrote: post #564
apical_dendrite wrote: post #538

Earlier quoted context omitted.

Startup companies blow through hundreds of millions of VC dollars with little to show for it all the time. Theranos raised $700 million for a technology that never worked. Plenty of others wasted hundreds of millions building half-baked products that nobody wanted or that made no business sense. Remember Quibi?

The difference is that those companies eventually fail. The govt has essentially limitless taxpayer money behind it(till a currency crisis like Argentina, Greece etc. happens taking down the entire economy) because paying it is enforced by threat of violence and it can borrow and print money as much as it wants with deficit spending. Also Theranos was aiming for something very innovative that still does not exist, wh…

> Also Theranos was aiming for something very innovative that still does not exist, whereas the govt IT systems are essentially glorified CRUD apps(no doubt complicated and with tricky integrations and need for reliability and security).

I worked both in the area of molecular biology and bioinformatics with some pretty nifty technology (which was later acquired by a large company). And in the area of giant ERP applications that are nothing but tons of boring forms.

I can confidently say that the complexity of ERP apps dwarfs anything that is needed for molecular biology.

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

#604

Post by johnecheck »

kragen wrote: post #462
johnecheck wrote: post #450

Earlier quoted context omitted.

You're right but also wrong. Flash is just semiconductors etched in a different pattern than logic, but you don't print on semiconductors. Semiconductors are 'printed' on wafers via photolithography.

Intel's wafers are made of silicon, which is a semiconductor. Silicon on sapphire hasn't been widely used for a long time, if that's what you're thinking of. Photolithography prints resists on semiconductor wafers which are then used to pattern the next process step, such as wet etching, plasma etching, oxide growth, epitaxial polysilicon growth, ion implantation, etc. These mostly remove semiconductor from the wafer…

Interesting, I hadn't known that silicon is itself a semiconductor before all the circuits are added. Am I correct in saying that the etching process transforms a single semiconductor into billions?

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

#605

Post by georgeecollins »

jjcm wrote: post #199

In general I would rather the government take a stake in corporations they're bailing out. I think the "too big to fail" bailouts in the past should have come with more of a cost for the business, so on one hand I'm glad this is finally happening. On the other hand, I wish it were a more formalized process rather than this politicized "our president made a deal to save america!" / "Intel is back and the government is…

That makes sense. I think the thing that would make capitalism better is if the government did more to own the means of production.

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

#606

Post by ecocentrik »

notepad0x90 wrote: post #432
ecocentrik wrote: post #173

Earlier quoted context omitted.

I agree. He should take control of Tesla, OpenAI, Palantir and Facebook next. Then privatize some of the leading quantum computing companies. Why do we even need venture capital if we can just build out an Office of Strategic Investment and control everything from the federal government. \s

Slippery-slope fallacy. The money to buy shares has to come from somewhere and the power of the purse is with House of reps. Someone like Trump can (and is-per this post) take stakes in random companies, but that's our democracy. You wouldn't say "bomb canada, france, england and norway" because the military bombed one country right? You make sure congress checks and balances that power. If the government takes over…

No, that was sarcasm that employed a slippery slope argument. I was not seriously suggesting that the federal government will buy Facebook. I was suggesting that we should avoid a pattern of behavior (slippery slope) that might lead to the socialization of other companies. Giving Intel a grant to keep it from failing is very different from demanding 10% in exchange for funds to keep it from failing.

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

#607

Post by georgeecollins »

sethev wrote: post #299
jjcm wrote: post #199

In general I would rather the government take a stake in corporations they're bailing out. I think the "too big to fail" bailouts in the past should have come with more of a cost for the business, so on one hand I'm glad this is finally happening. On the other hand, I wish it were a more formalized process rather than this politicized "our president made a deal to save america!" / "Intel is back and the government is…

The government took 79.9% of AIG in that bailout - which was the biggest of the "too big to fail" bailouts from the past. People seem to forget that the owners of these companies that were bailed out got almost completely wiped out and instead focus on management compensation (which famously stayed high).

That's an over simplification. AIG was bailed out. And it's investors were wiped out. But AIG owed a huge amount of money to banks and investment firms that had enormous benefit from the bail out. Those are the people who paid no price.

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

#608

Post by georgeecollins »

rpmisms wrote: post #535
softwaredoug wrote: post #480

Earlier quoted context omitted.

The “our president made a deal!” part of it makes me skeptical of actual long term patterns past a Trump administration. While not walked back completely, a lot of what Trump does is minimized and scaled back after the initial theatrical moment. Still in a bad place, but usually some TACO moment happens. And then, in the end, it’s some executive action that lasts as long as the current president is in power.

Democrats will not walk this one back. Having a stake in a hugely important industry is valuable. Being able to directly shape Intel's path is going to be historically important.

Right because capitalism rules and socialism is for fools! Just kidding, but can we please let the phrase "free market" die?

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

#609

Post by JumpCrisscross »

re-thc wrote: post #542
edge17 wrote: post #520

Earlier quoted context omitted.

Section 9902 of the act authorizes the Secretary of Commerce to provide financial assistance to "covered entities" One can argue how to interpret "financial assistance" broadly, which is exactly what the administration has done.

> One can argue how to interpret "financial assistance" broadly, which is exactly what the administration has done You can? So some years later they can change it again? Where's the trust?

The takeaway is the next Democrat president should just declare a public transit emergency and start building while the courts squabble. Same for housing reform. Same for climate change and shutting down coal power plants—once you shut it down and take out the turbines, it doesn’t matter what the courts say.

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

#610

Post by topspin »

m4rtink wrote: post #155
cvoss wrote: post #70

Earlier quoted context omitted.

The answer is in the paragraph in between the two you quoted from. The money for the purchase has already been appropriated by Congress and awarded to Intel. The awards didn't previously have this giant string attached where Intel gives stock in return. But now they do. And it makes sense that Intel is spinning it as a generous investment from the gov't, but the gov't is spinning it as a free gift from Intel. Neither…

Isn't that pretty bad, Darth Vader style changing of previously agreed on deals ? Not sure how anyone can believe anything that was agreed will hold in such an environment. :P

> Isn't that pretty bad, Darth Vader style changing of previously agreed on deals ?

There has been some changing of deals on Intel's part as well, with indefinite delays on US fab buildouts the US passed a bill to subsidize. Now the US is taking some equity for its debt.

Far more dramatic Government intervention took place in 2009 when the US bailed out domestic automakers, including equity. Don't recall as much angst about that among the laptop class. Because Obama.

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