Hacker News Reader

Comment by 34679 | Hacker News Reader

I feel sorry for any startups looking to innovate in this space. It's hard enough competing against established players without them getting billions in free money.

Intel has had the resources to build out fabs in the US for decades. Instead, they've chosen to build elsewhere, and now they're rewarded for it?

They recently announced their $20b facility in Ohio is being "put on hold":

https://www.tweaktown.com/news/96969/intel-delays-launch-of-...

While at nearly the same time announcing a $25b facility in Israel:

https://www.cnn.com/2023/12/26/tech/intel-israel-investment/...

View on HN

>They recently announced their $20b facility in Ohio is being "put on hold"

I have a friend who lives in Ohio who was very excited about this, and I told him not to hold his breathe, its likely they will do everything they can to get subsidies to pay for it, rather than pay for the majority of it out of their own pocket and re-coup some via subsidy, therefore I suspect they will delay opening until they get more subsidies.

It looks like I was right, unfortunately

I feel sorry for any startups looking to innovate in this space. It's hard enough competing against established players without them getting billions in free money.

Which startups would be harmed by this type of investment? as a relatively casual observer, I didn't think there was much in way of startups that were looking to go head-to-head with a company like Intel or AMD in chip fabrication.

This isn't really a startup kinda business. It costs something like $10b to build a new fab.

Isn’t that what they said about rockets?

The big difference there is SpaceX was able to incrementally build up. Falcon 1, Falcon 9, Falcon heavy, Starship. Each step allowed them to prove that it worked and gain investors and government contracts.

Who in their right mind would invest $10b just to build the manufacturing capability without having a well established product? And if you have a well established product are you still a startup?

The equipment to manufacture rockets costs many orders of magnitude less than equipment for a FAB. It also does not get obsolete quickly.

Musk should have spent 44B on a chip company.

Rockets turned out to be expensive not because the technology demanded it, but because the companies were intentionally inefficient, e.g. it was actually fine to build a rocket in a tent with simple tools than to setup a massive clean room facility. This was fine because the government would hand them a blank check with a guaranteed profit percentage, and the handful of commercial customers would just swallow the cost.

However, it isn't as clear if the same applies to semiconductors, since even a bit of dust is indeed a serious problem for producing a chip where the transistors are much smaller than most dust. Until very recently there were no blank checks, every improvement required mostly private investment, so it's less likely that the inefficiencies are intentional.

Any industry wouldn't be "really a startup kinda business" if only a few players are pumped more than everyone else combined by orders of magnitude. Having to scale to everyone's demand is a lot more costly than if the market was fragmented.

It's not just scale. Even Intel's development fabs cost billions to build.

The equipment and facilities required for cutting edge fabs are very expensive.

That's where the innovation comes in.

CHIPS isn't a handout; it's the only way to get them to build these expensive fabs domestically in a way that makes economic sense.

As much as I agree, and I really do, this is also a company that mentions they have $7.24 billion available for sock buybacks [1].

Sure, maybe they don't actually make any buybacks. This is what's left from $110.0 billion they approved for stock buybacks in the past, not a quantity that's been approved or seemingly needs to be used this year. They haven't bought back any stock since 2021 [1].

One just wishes they'd invested in fab-building earlier. They've spent $152.05 billion in buybacks since 1990 [1], a fab apparently costs anywhere from $3-20 billion [2]. That's say ~10 potential fabs that instead became just checks for investors.

[1]: https://www.intc.com/stock-info/dividends-and-buybacks

[2]: https://en.wikipedia.org/wiki/Semiconductor_fabrication_plan...

> Intel has had the resources to build out fabs in the US for decades. Instead, they've chosen to build elsewhere

Almost all of Intel's fabs are in America.

Israel investment might have gone through due to their research department in the same country. Also, they got a grant from the govt in Israel.

It's called payoffs. Not much we can do when the system is corrupt.

I don't think we'll ever have a perfect system, unfortunately. Just makes it that much harder for startups.

Imagine announcing you're going to build a plant in Israel in the middle of Israel committing a genocide of the Palestinians in Gaza. Evil company

https://bdsmovement.net/Press-Release-BDS-Launches-Boycott-I...

apartheid aboard is the new intel inside. They will need updated stickers.

Reply on news.ycombinator.com