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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

#681

Post by alephnerd »

selimthegrim wrote: post #376
alephnerd wrote: post #4

Good. It's very much a "Heartbreaking: The Worst Person You Know Just Made a Great Point" situation. If Taiwan's NDF has ownership share in TSMC and UMC, China's CICIIF in SMIC, Japan's Master Trust in a majority of enterprises, and Abu Dhabi's Mubadala in GlobalFoundries, then we should as well. The recent (50ish years) aversion to Industrial Policy in America has been pigheaded and ideological to a certain extent.…

What if the government demands they start paying dividends?

Ideally, a government or SDF holding is not a majority holding, but a controlling stake.

Generally, a SDF is expected to take decisions that help develop an ecosystem or market, and help act as a check against primarily profit-driven motives.

Assuming a stake is part of a well managed SDF similar to Temasek, Mubadala, or the Master Trust, then I'd tend to trust the decision being made.

That said, I also recognize that this administration is severely disorganized and amateur, so I wouldn't trust their choices. But, I do feel this sets a precedent to allow both the federal and state governments to build SDFs, especially in a post-Trump world.

For example, the CHIPS and IRA were able to be pushed thru by the Biden admin because of the trade norms the Trump 1 admin created and upended.

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

#682

Post by abullinan »

ecocentrik wrote: post #216
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.

If the argument was for protecting Intel, then the US government should be placing huge orders with Intel for solutions that will fund R&D and allow the company to regain its position as a foundry. They should be tapping into the defense budget. DARPA should be involved. This was an opportunity for petty extortion and a step towards socialism.

It is not socialism. Socialism is when the workers control the means of production. Not a fat windbag mobster president and his thugs.

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

#683

Post by ch4s3 »

bcrosby95 wrote: post #346
ch4s3 wrote: post #273

Earlier quoted context omitted.

I’d really rather we didn’t bail out these companies at all. It clearly creates moral hazard and makes it hard for better run companies to enter markets.

If shareholders are losing ownership it's less a pure bailout and more a strategic investment and/or takeover. It also potentially lets the average taxpayer benefit rather than just those its directly propping up.

I think the government taking a stake creates additional moral hazard and invites corruption. The melding of corporate and government interests is a slope that is always slippery.

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

#684

Post by tw04 »

ch4s3 wrote: post #273
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…

I’d really rather we didn’t bail out these companies at all. It clearly creates moral hazard and makes it hard for better run companies to enter markets.

While that argument makes sense from a purely philosophical perspective, it doesn’t hold water in the reality of this situation.

Nobody is entering the chip making business and growing to a size and scale to compete with Intel in 2025. If they collapse tomorrow there aren’t going to be startups filling in the gaps, there’s just going to be massive shortages of chips and chaos.

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

#685

Post by colmmacc »

foxglacier wrote: post #630
colmmacc wrote: post #380

Earlier quoted context omitted.

It's not otherwise related to all this but a real bug bear of mine is that municipalities don't get part ownership - along with controlling rights for matters like sales or relocations - of sports teams when we subsidize their stadiums through taxes.

The municipalities could negotiate for those rights when they agree to pay for the stadium. It's on them if they risk it.

Organizations such as the NFL forbid it, only the Green Bay Packers are grandfathered in as an exception. Owners are encouraged to threaten moves. Collective action is needed to undo the race to the bottom.

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

#686

Post by azinman2 »

frollogaston wrote: post #573
gizajob wrote: post #426

Earlier quoted context omitted.

I don’t think that really counts if there has to be a giant campaign of quantitive easing by printing dollars alongside.

Was going to say, gotta check first how long that money was tied up for the profits to really mean anything. How well would that investment have done vs index funds or gold? Or what if you adjusted all dollars for supply?

The gov doesn’t invest in index funds or gold or in any traditional investor way outside of spurring growth.

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

#687

Post by azinman2 »

thisisit wrote: post #628
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…

Government shouldn't bail out anyone. Period. It should enact preferential policies like grants, tax cuts, subsidies etc. for industries they want to promote. It is done all the time. That is what happened with the CHIPS Act. The moment 10% stake was announced this became political. While the stated reason might be national security etc, in reality something else might be at play. One, this government and its support…

Except if Intel goes there’s no leading chip manufacturer left. You can’t just (easily) tax cut your way to having that concentrated knowledge and market position.

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

#688

Post by andrewflnr »

IshKebab wrote: post #647
andrewflnr wrote: post #541

Earlier quoted context omitted.

> getting to the equivalent to what TSMC has in Taiwan That wasn't the question. The question, at least for me, is can you build non-zero chip production, enough to start building out a sustainable business. Obviously you're not going to compete with TSMC on day one, but there's a wide spectrum between that and "garage".

How would you build a sustainable business based on old processes though? The only reason fabs exist that use old processes is because they were once new processes, and once they've been built you may as well keep them running for a while. Building a new 50 nm fab would never be viable.

Those old fabs are still able to be useful at all because most applications don't need cutting edge chips. Chips have been Good Enough for decades. And again, if the goal actually is manufacturing independence, buying local chips that are a bit more expensive is totally worth it.

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

#689

Post by electriclove »

mensetmanusman wrote: post #667
electriclove wrote: post #583

Earlier quoted context omitted.

Because that is not a good use of Apple’s $50B.

Their dragon’s hoard of cash is only being used for financial engineering. Their finance team axed a meager $10B dollar investment to improve Siri thereby making Apple the laughing stock of the tech industry players who say they are working on AI.

Oh, Apple definitely has problems but putting $50B into Intel doesn’t sound like a good idea.

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

#690

Post by dllthomas »

gmd63 wrote: post #490
dragonwriter wrote: post #196

Earlier quoted context omitted.

Because the government having a financial interest in Intel’s success is expected by the market to result in the government acting in Intel’s interest, in order to profit.

You would think the US government would be interested in the US government's success, but the past eight months have proven starkly otherwise. What makes one think they will be looking out for Intel's interests any better?

How can you say they don't care about success? When they got bad numbers they immediately fired the person responsible.
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