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Fabrication is where Intel is falling down.

They have fresh new chip designs that would be perfectly adequate, but they are still hobbled by 14nm. They have now released three? four? iterations of x86 design on the same 14 nm process, because 10nm is that troubled

If you spun off the fabrication, as AMD did, you would have a much smaller, but more-competitive fabless business, and the fabricator would implode. (Which is pretty much what happened to Global Foundries, AMD's former fabrication house)

In any case, much of the value for shareholders would be eradicated. Intel has historically done very well as a vertically integrated business. They would like to remain vertically integrated.

We may see Intel resort to outside fabrication -- executives have already mentioned it in the business press -- but I very much doubt we will see them discard their internal fabrication capabilities.

I am afraid, they're going to be using US gov as their wheelchair to survive a few more decades: https://newsroom.intel.com/news/intel-wins-us-government-adv...

So it's gonna be another too big to fail thing again.

Less too big to fail, more a national security interest in ensuring the US can make chips during a hypothetical conflict.

Great if you’re the company the gov’t blesses for this purpose (like Microsoft) but not so great for their competitors.

I'd probably be nervous about TSMC opening a fab in AZ then

That fab will never open.

Just like Foxconn's plant in Wisconsin.

It'll just keep getting pushed back, and pushed back. Its job is to keep the politicians happy (or at least not angry), and it doesn't need to be built in order to serve that purpose.

That fab will never, ever, ever run a single wafer.

I suspect it very much will exist, but only once it's a node or two behind. It'll never be bleeding edge.

I think in this case it's a little different because of the milsec angle and Taiwan's geopolitical role in "great power conflict" with China.

In this case it’s a legitimate national security subsidy. Even if it’s perpetually a few nodes behind, the US military needs a high-tech fab company headquartered in America, staffed mostly with Americans, that does at least some of its manufacturing in the geographic United States.

The Boeing of semiconductors

War must always be considered, if you want to keep existing as a nation.

People have been repeating "Si vis pacem, para bellum" for thousands of years for a reason.

Semiconductors and aerospace are important to war efforts, and having domestic manufacturing capability is a big deal if you have serious, wealthy, technically advanced adversaries.

Reality is complicated and many-faceted, and there are a number of reasons to keep Intel alive as far as the govt goes: war, staving off brain-drain, keeping a lot of jobs, etc.

Your praise of war comes off quite naive. Perhaps you figure "war" or violence as viable solutions despite being a much more connected world where diplomacy and fairness can be judges more democratically. Such talk of war is neccesary is an utterance of someone born on the right side of the fence and quite clearly no clue as what they are talking about.

Ask Ukraine about the practicality of disregarding defense as a necessary evil.

It’s hardly naive to assume that, since there has always been conflict, that conflict will continue for the foreseeable future.

Take this from an extremely liberal and war-abhorring person: If your argument is that a country should not take steps to secure it's supply chains in the event of a war because <morals or something>, then you are the naive one.

That's why diplomacy works for the vast majority of countries. War is expensive and the costs are always more than anyone ,regardless of how sophisticated they believe themselves, could possibly imagine.

Take that from someone who lost a large chunk of his family currently in an African - shithole as the US president aptly put it- country. I'm on HN because this is the most peaceful time in recent memory. Do me the favour, at the very least, to put a handle on your dillusions grandeur. In our connected world diplomacy should be the only way to resolve national conflicts.

Sure, but countries also need not to be codependent for diplomacy to succeed. Diplomacy and trade are the basis of an international peace that might last centuries, but to work properly it is necessary that countries strive to also be potentially independent otherwise you get global crisis and situations where military threats are necessary to force diplomatic relationships.

That shouldn't be surprising.

The Military Industrial Complex is a huge beast. Almost all the big tech companies started before 1970 or so were funded by DoD research money. The only reason silicon valley is where it is lies in DoD radar research constraints. Computer tech started as stuff like solid state transistors to improve radio efficiency and size.

Since the MIC is a good ol' boys club with the tax dollars to pick winners and losers, of course they'll help their friends first "for the good of the country".

I'd also like to note my displeasure that my tax dollars pay must of the research bill, but the various companies walk away with the patents, copyrights, and profits. There's no reason for someone else to get rich off my investment.

Want to solve the national debt? Require royalties for government investment.

One of the questions I have is just how much of their relatively recently-gained process optimisation knowledge of e.g. 14+++ will be transferrable to future node shrinks, and, will this give them an IP edge over TSMC if they can get back on track with node shrinking?

People root for anything-but-intel because competition is a good thing and intel had none for very long time.

I don't know where the notion of "Intel is about to die and TMSC will make us suffer due to monopoly" comes from but before having people cheer for Intel again they probably need some time to have their execs cure some disease in some poor part of the world, do a few AMAs on reddit, open-source something, donate to some cool projects in tandem with actually improving their products before regaining the goodwill of the people. Can take some clues from Bill gates and Microsoft.

The consumers are pissed. AMD's comeback is attracting a lot of fanfare because of people being sick of the not having an option beside "should I get i3, i5 or i7" for very long time.

> I don't know where the notion of "Intel is about to die and TMSC will make us suffer due to monopoly" comes from

Semiconductor R&D costs have been going up, companies consolidating or went into niches. There are jokes about having to buy from The Semiconductor Company® in the future.

Intel is sitting on a lot of money, so they're not going to die soon. But they haven't been showing signs of improving the situation since 14nm was delayed in 2013. This saga didn't start with 10nm. Remember that the cadence used to be tick-tock every 18 months. We still can't get 10nm desktop chips. So there are some questions how they'll fare in the future.

Tech enthusiasm and criticism has become extremely cyclical in the past decade. It’s easy to forget that we were all cheering for Facebook and the Zuckerberg success story before it became uncool to be pro-Facebook.

Intel is stumbling, but up until very recently they were still the fastest gaming CPUs available. That didn’t stop gamers from criticizing them endlessly and cheering their demise. Intel went from cool to uncool.

Give it a few years and they might be able to leverage the underdog position into a comeback story.

> It’s easy to forget that we were all cheering for Facebook and the Zuckerberg success story before it became uncool to be pro-Facebook.

This is emphatically untrue. There was always a significant minority in "Hacker" and privacy circles that were intensely sceptical of Facebook in specific and "social media" in general.

Dude, I was never cheering Facebook.

The most positive opinion I have ever had of it could be described as indifference.

> leverage the underdog position into a comeback story

The comback story will need Intel to become more productive with CPU manufacturing R&D. Is there any reason why after such prolonged decline Intel may have a comback?

> TMSC will make us suffer due to monopoly

The fears have less to do with TSMC the company and more the fact it's a pawn in the geopolitical chess game between the US (and her pacific allies) and China.

The issues with supply chains through Taiwan have little to do with whether gamers are buying their CPUs from AMD or Intel, but the fact that a critical piece of infrastructure in the Western economy is very precariously located, and in the event of war or political strife is not going to be able to be mobilized for domestic (or even friendly-allied) production.

And moreover, is going to be instantly destroyed and unrepairable.

I agree with you. But I think it's a "can't-see-the-forest-for-the-tree symptom" that is possibly due to the typical HN demographics. It has been a decade or longer that the US relies on China manufacturing for industrial infrastructure that is as (or even more) critical as wafers. It doesn't help fix the problem by simply singling out semiconductors and keeping every other industry locked in China as-is.

All of those have second sources.

5nm silicon is, literally, the only thing that only one company can make.

It would have to be quite a long war where the military couldn’t rely on existing equipment and inventories of chips for a while. It’s not like most military equipment uses the latest CPUs anyway.

And if a war did drag on for years there would be opportunity to switch suppliers and manufacturers or build new infrastructure.

Some industries take decades to establish, you don't have 5-year stock of CPUs and you will probably be left high and dry if the supply is cut off by a natural disaster or something.

Where do you even get people with the knowledge required to run the 5nm fabs, there night be none at all on thr continent.

Who said anything about any wars? There are rumors abound about TSMC infrastructure being booby-trapped due to national security concerns. As soon as China reaches 14-28nm and is able to sustain internal needs using home grown foundries an "accident" in TSMC facilities could put mainland in a position of silicon leader for at least half a decade.

Why half a decade? They just have to buy new equipment. The know-how remains.

Sounds like US screw up to prevent a monopoly which is being broken by an outsider, now complaining that there are no western alternatives to the outsider.

Anyway, the machinery that TSMC is using is produced in Netherlands AFAIK. US should be fine, there's a lot of capital available to buy the machinery, recruit the talent and build the Fabs if it comes to TSMC not being reliable partner at some point.

Critical technologies like optical proximity correction are fab proprietary

That's why your recruit the talent too.

Even if TSMC is western comany, monopoly on bleeding edge process is bad for world. I wish no more fabs (TSMC, Samsung, Intel) drop out from the race.

I for one am very glad that TSMC amounts to a SPOF. I've been to Taiwan twice, and I'd much prefer to use an old chip a while longer than for this lovely, open nation to be invaded by a totalitarian regime. There is only a few things preventing an invasion, mainly that the US would like to keep this "unsinkable carrier", and TSMC. As Xinjiang shows, only international pain will do to make the world react to China's actions, and TSMC might be able to cause that.

Samsung is not that bad. They just announced a 5nm chip; it's not as good as TSMC but it's not as far behind as Intel either.

Right, don't underestimate Samsung - they have top tier fabs and manufacture a lot of chips. If the world has all their eggs in the basket of one company that company is ASML.

Right, so our eggs are not all in one basket, but in two. One claimed as rebel territory by the CCP and one still technically at war with a nuclear-armed hermit kingdom.

Fortunately ASML is in the Netherlands.

I was obviously referring to Samsung.

As for ASML, if it were the key to Intel's woes, the article we are all commenting would not have been written.

> As for ASML, if it were the key to Intel's woes, the article we are all commenting would not have been written.

It not being the issue discussed in the current article doesn't mean it isn't a critical issue.

At risk of entering Rube Goldberg territory, I suppose we could speak of two baskets hanging by a common thread.

So possibly a couple meters under even current sea level ? ;-)

(Continuing the sky-is-falling theme. :) )

> one still technically at war with a nuclear-armed hermit kingdom.

If we're going down that route, every country in the world can be described in an equally alarmist manner.

Yeah but most of them are more than 300 miles from Xi Jinping.

This is an absurd amount of reductionism. The chances of actual military conflict in both the Korean Peninsula and Taiwan are objectively much higher than most other places around the world. Having both of the top tier semiconductor manufacturers reside in such a hotspot is absolutely a cause for concern.

Completely agree. The world's supply of semiconductors is dependent, in some ways, on the benevolence of the CCP. TSMC is like Arakkis. We need to diversify the supply chain.

Isn't TSMC building a fab in AZ? Anyway I'd say the "spice" in semiconductor production is rare earth elements, since the CCP controls most of their extraction (and has artificially lowered exports in the past)

> Anyway I'd say the "spice" in semiconductor production is rare earth elements, since the CCP controls most of their extraction

That's really only because of other countries outsourcing to China and not supporting domestic mining. There is no shortage of rare earths in other countries.

That's very true. European countries "go green" by exporting their mining pollution to China. They can then blame China for all the pollution problems.

Brilliant really. Get political points for "lowering emissions", then double dip getting more points for "being hard on China" while at the same time not hugely affecting the economy, jobs, or ticking off industrialists.

> Isn't TSMC building a fab in AZ?

Yes, but the planned chips are an older generation right now and they'll be even older when the fab actually starts production. TSMC would never move cutting edge production outside of Taiwan.

It’s just such nincompoopery, people speculating about geopolitics. TSMC is owned by normal people who want to make money, if for some reason they aren’t able to trade, ownership will move out IP and put it on a USB key, and build elsewhere.

Just think about it rationally. If TSMC isn’t allowed to meet demand, well of course someone will be incentivized to move the IP elsewhere where you are permitted to meet demand. It would be such a colossal opportunity. Indeed shutting off TSMC would be great for other people interested in getting into chip manufacturing, in the same way that reducing competition in anything benefits producers.

The reason that doesn’t happen has nothing to do with geopolitics and everything to do with what every mainstream US politician has always been saying: subsidies, and the price of labor.

This is a naive take on Taiwan's status and China's attitude towards it. The simple fact is TSMC being in Taiwan greatly incentivizes western powers to protect Taiwan from Chinese aggression. Everyone knows it, especially the Taiwanese government.

> Just think about it rationally.

Indeed.

No, they're saying they're building a fab in AZ.

Like Foxconn is (still!) saying they're building a fab in WI.

TSMC is a Taiwanese company. The world can ensure the supply of its semiconductors by ensuring Taiwan has access to weapons and guarantees of military assistance in case the CCP's benevolence wavers.

China claims that Taiwan is a renegade province.

When (not if) China acts on that, there will be trouble.

China has strong infowar capability and is developing it quickly. Old-fashioned spy-vs-spy type warfare works, too, but is less visible.

If China decides to take Taiwan by force, there is very little the rest of the world can do to stop them.

Nazi Germany attempted to take tiny Malta from the Britsh for two years and failed.

The Japanese held many untenable defensive positions in the Pacific for months.

Unless China is willing to nuke Taiwan, (what would be the point?) a military offensive to take over Taiwan would be extremely unlikely to succeed within a few months - and assuming the US/Australia/UK/Japan/South Korea provide support - almost impossible.

Doing any kind of amphibious landing offensive is incredibly costly and difficult.

China's best hope would be that Joe Biden is under CCP control.

None of those other islands were even remotely close to the strategic value of Taiwan.

Will do? Sure. But can do? Sanctions, war, ...

And, uh, based on the diplomatic recognition situation it's pretty clear that Teh World has considered your suggestion and very explicitly rejected it.

> Since when is competition and choice a bad thing?

Who is saying this? There is competition, and Intel is starting to lose.

> If you're a chip design firm and you have a 8-month backlog to get your masks made at TSMC, what do you do then?

Wait 8 months. This is a lot better than getting a "Lol, we don't do custom masks" from Intel.

> Intel should spin off its Fab division as a separate company, hire some top executives to rejuvinate the workforce, make it the coolest Fab company in the world to work for and leap ahead.

Yes, they absolutely should do that. The only question is if they have the guts to do it.

China Invading Taiwan would be the IT worlds covid moment.

Tick-Tock-Tick-Tock-Tock-Tock-Tock-Tock ....