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Comment by AnotherGoodName | Hacker News Reader

The thing that will surprise a lot of people is how low Intel pay is in the USA.

Just look up Hardware Engineer Intel on Payscale or other wage comparison site. Other companies are paying 50% more for the equivalent level. Eg. "Intel Bay Area Hardware Engineer salary" level 5 vs entry level "Google/Meta/Nvidia/AMD/Apple hardware engineer salary". On a direct, with no PPP or similar conversion comparison they do pay more for Bay Area talent than TSMC does for talent in Taiwan but Taiwan has significantly lower costs of living so you really wouldn't be better off even as talent in Taiwan migrating for an Intel job.

There's no way Intel is getting the best talent nor has it been for a long time. They do not compete in the slightest and they haven't in a long time. They do not even come close. Oh and they are doing layoffs of the cheapest hardware engineering workforce in the USA right now. Lets see how this pans out for them.

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This 10000000%. They treat their employees like shit. Intel lost literally their entire red team to Oracle of all places over (at least) pay. Intel has a complete joke pay system that is like something out of the 1950s, underpays substantially and docks that already low pay based on certain qualifications like having a college degree (sorry Steve Jobs!).

I have zero interest as a taxpayer in bailing out their crappy company, let it fail or succeed on its own merits like the companies all of their employees moved to because they were better at retaining staff. Modernize your staffing system to hire competitively or die.

The "companies all of their employees moved to" don't make leading edge semiconductors with US based R&D, so I don't know why you're acting like they'd be able to do what Intel does.

This isn't about Intel, it's about keeping US companies competitive in leading edge semiconductor manufacturing. If we let Intel fail, we'd have an even tougher battle to get some other US company to compete.

Ok, so let bankruptcy wipe out the shareholders and then let someone more responsible buy the good parts at auction. Or nationalize it. If shareholders aren't taking risk and responsibility, why the hell are we putting them in charge and letting them pay themselves massive dividends?

Excellent observation. Setting "preserving XYZ corporation" as a national priority is focusing on the wrong thing. Corporations are temporary constructs formed out of combinations of resources (human, capital, IP, etc) to organize and maximize the value of those resources.

If we really care about fostering and furthering these resources, we need to free them from being held captive, under-utilized and mis-allocated inside a repeatedly failing corporation - not propping up failing corporations. If the resources in question really are both viable and valuable, releasing them will allow the free market to do what it does best - efficiently allocate resources.

No central planning committee created U.S. economic leadership by picking which corporations to subsidize, so no central planning committee can "preserve" or restore that leadership by picking "winners" to subsidize. We need to let Schumpeter's creative disruption keep doing it's job of cleansing, educating and renewing the market through re-allocation of resources. That's what put us in the lead and it's what will keep us there.

1) No other US company is capable of using the parts for leading edge semiconductors.

Case in point: GlobalFoundry had EUV machines but returned them to ASML as they weren't able to compete technically and capital wise. They would be the best to take over Intel's assets but they weren't competitive years ago, why would they be now?

2) idk where you're getting the idea that Intel is paying massive dividends when it has been one of the worst performing tech stocks for years. The SW companies juiced up on low interest rates have done far better.

> They would be the best to take over Intel's assets but they weren't competitive years ago, why would they be now?

Yeah. Channelling Michael Dell, October 6, 1997, they should shut it down and give the money back to the shareholders.

Or more seriously, everything changes over time. Intel goes from good to bad, GlobalFoundry can go from bad to good.

Shareholders already have huge risk and have lost big on Intel. Leading edge is too cutthroat, if it goes to bankruptcy it will be too late to ever catchup. It’s probably already too late and we just don’t know that we’re living in a Chinese century.

> letting them pay themselves massive dividends

Earlier this month, Intel announced that they've suspended dividend payments entirely. Prior to that, their dividend payments were decent but far from "massive".

America succeeds when we let unprofitable companies die and it fails when we subsidize them to the point that they can't run an undistorted budget or be competitive anymore. That is the difference between here and the places that will never even get close regardless of how many unprofitable silicon wafer factories they allow to crawl around the ground like sick mutants.

Speaking of, how's Boeing doing lately?

To that point, how is American manufacturing or shipbuilding doing lately?

There a case to be made for subsidizing core enabling industries.

Like Cuba did with the sugar industry? They can't even make sugar anymore. Distorting markets usually destroys them. Intel isn't too big to fail.

> Distorting markets usually destroys them

These markets are already destroyed and have been by corporations.

America doesn't have an economy. Well, not really. We don't make anything. We used to, when we had a manufacturing industry, but they all left and now stuff is made somewhere else and shipped here.

Same thing happened with automobiles and will only get worse when the inevitably better Chinese cars come in.

But, at least, we had computer. Except now we lose that too.

Look, the US is currently only propped up on invisible money and greed. What we do it make someone else do the work, and then turn around and sell it for 10x more, and pocket the difference. We justify it with having busy bodies in suits sitting around "creating value" or something. Tada! Highest GDP in the world.

It's only a matter of time before these countries, like Taiwan, China, Bangladesh, India, wisen up and realize what's going on. Soon, they're gonna put two and two together and realize THEY are the US economy. They make everything. They have all the capital. They have the means of production. We don't.

We're on thin ice. If we let more US industries die off to be replaced by manufacturing in other countries, we won't have anything left. In my opinion, the situation is unsustainable. I don't know how much longer we have, and I think the consequences will be more severe than anyone is imagining.

Like Europe did with aircraft manufacturing? Or Japan did with auto manufacturing? Or Taiwan did with semi? Or South Korea did with semi/auto/ship?

There's a lot of successful examples of governments using protectionism and subsidies to build globally competitive industries.

Correct, but one can make a point those were an impetus measures that allow those to kick off and operate at competitive level

In case of Boeing their business pivoted in order to extract the funds themselves, not to use funds to make products. Thats the problem, corruption and profit chasing over product creation.

Yes, because any subsidy is literally communism. /s

How's the US farming industry doing? I wonder why you brought up a completely different industry in a different country ran by a dictator instead of a core industry right here in the US that has been heavily subsidized for decades and for very good reason.

Tons of farm production is now going not into food, but into massive ethanol subsidies that are energy negative, damage cars and pollute more (ethanol generates smog, plus gas for tractors and equipment, plus fertilizer runoff creating massive dead zones in lakes and rivers and the Gulf) than gasoline does, and will ultimately have to go away in order for EVs to replace fuel engines (which they will now lobby against because it ruins their subsidized industry). There's probably some examples that more prove your point to some extent, this is definitely not one of them. My argument is that when governments try to manipulate or force market demand based on political priorities they tend to create problems.

If I was going to fight my own argument I would probably try the heavy government investment into silicon valley for military purposes. It clearly worked out pretty well. At the same time, the government didn't bail out Shockley after all the talent left to Fairchild.

1) ethbr1 brought up many other good examples

2) ethanol is less than 50% of corn production, which is in itself about 25% of the crops in the US.

3) > If I was going to fight my own argument I would probably try the heavy government investment into silicon valley for military purposes. It clearly worked out pretty well. At the same time, the government didn't bail out Shockley after all the talent left to Fairchild.

This is a bad faith comparison.

Intel isn't asking for money because its top talent left to start an even more successful US based semiconductor manufacturer. Instead, the whole US semiconductor industry has been slowly off-shored after decades of US capital and talent doing the math and realizing that SW pays a lot better. Intel is simply the last holdout due to its vertical integration providing higher margins which allowed it to afford the higher US wages, until recently.

If the US had started the CHIPS act 10 years ago when there were other US companies anywhere close to the leading edge (i.e. GlobalFoundry) then it wouldn't effectively be an Intel bailout, but that's not Intel's fault.

Minor observation that US ag subsidies send more to livestock than to ethanol.

Intel doesn't have a monopoly on leading edge semiconductor manufacturing. The company that kind of does is ASML, they are based in the Netherlands, but there's an office in Connecticut.

ASML is a tooling company, they don't fabricate semiconductors.

The economics of making EUV tools versus running them 24/7 at high throughput are very different.

While I agree their comp is abysmal, if Intel fails America is completely screwed. TSMC will never place leading edge in America and Beijing has the most advanced fabs in the world, which they’re already largely blocked from using, in rocket artillery range. None of our software roles mean anything if we don’t have hardware to run it on.

I work for a fabless semiconductor company in the US.

We have hired a lot of people from Intel over the last 5 years and the main reason they leave and join us is because we pay more.

Apple and Nvidia pay even more than us so we lose people to them.

The truth is that hardware just plain sucks compared to software. More punishing to produce and less profitable to do so. Nobody with money really wants to back hardware over software, at least right now.

In other words in the US economic system it pays better to sell ads than to try to produce an actual tangible product.

That says more about the economic system than it does about Intel.

It's more like it pays better to be on a small team that can create software that is easily scaled to millions of users, running on hardware that is very difficult to produce but done using 2nd world and 3rd world manufacturing and supply chains.

Software effectively has zero marginal production cost.

Hardware will never be able to compete with that.

Consequently, it's really hard to make more profit selling a million units of hardware than of software.

The only conclusion from this is I think taxing the ever living daylights out of huge software companies.

Google/MSFT/Amazon all need to be looked at. We shouldn't be subsidizing them with our free shopping information data, nor the text we write in our content now with LLMs.

What do you think it says about the economic system? Software inherently has better economies of scale than hardware. That will be true regardless of the economic system. I don't love advertising but it's a small fraction of the entire software industry.

Ya it’s simple economics unfortunately (I’m a hardware engineer). Software can pay more because the cost to produce is lower and so the margins are higher. Hardware has abysmal margins - design, r&d, failure, debugging, schedule push back, component cost, supply chain logistics, warehousing, manufacturing, etc… the list goes on there’s a million things eating into the bottom line.

Presumably, the end state of the US is one single software company producing nothing but ads. Because it pays the most, no other jobs are important.

Is it? Hardware engineers at Apple, Microsoft, Meta, NVIDIA, Amazon are paid much better than at Intel.

Using those examples when comparing software and hardware engineering _in general_ gives a skewed perception of things. Three of those companies are only interested in hardware as a way to optimize their (incredibly profitable) software business, and Apple/NVIDIA are two of the three largest companies on earth. That's a teeny tiny slice of the job market.

I'd bet that if you averaged out compensation from the top 100 paying companies for both hardware and software engineering rather than the top 5, the software number would be nearly double the hardware number. Once you start look at "normal" companies, the difference in margins between software and hardware and its effect on pay becomes very clear.

Check out the stats on apples margins on hardware vs their services and software ;)

And arguably most of these companies (minus Apple and nvidia) have software and services as their bread and butter, not hardware.

Fwiw the low wages of Intel are in comparison of hardware engineering roles directly.

So yes hardware engineering pays less but hardware engineering at Intel is another very large step lower than other hardware engineering jobs.

It took me several years to figure this out. And then several more years to do enough software side projects to build a full software résumé and get hired as a software engineer. The work is definitely less fun, but I almost tripled my TC overnight.

You can be in a good spot with a mix of knowledge, since it's so rare.

Somehow Nvidia scrapes by...

You can argue that they are actually selling the CUDA libraries, and the GPUs are just a very expensive "dongle" to enable them.

The main reason Nvidia (the company) is worth Nvidia money is they decided it'd be smarter to be a platform company than a hardware company.

AMD's graphics division still hasn't figured that out.

100% agree on pay. Also Intel is ossified, there is less and less team where you are held accountable. Empire building is rampant. One of the fundamental thing missing is vision and how each team is relate to that vision.

A friend left his SWE position at Intel(He was part of the Altera acquisition) about 4 years ago. His weeks consisted of answering one email on Monday and working out the rest of the work week because his lead did pretty much nothing, and their manager not only did nothing, but made shit up regularly.

It was pretty wild honestly.

One problem with paying people significantly below market is that some of your people will be disgruntled and will optimize for working as little as possible without getting fired.

Soon enough there are entire groups whose culture aligns with cutting corners and pretending to work.

Was it always like this? Or did they have a period where they stopped paying top dollar for talent?

Since the mid 2010s at least. It was common then that Intel would expect far greater for less pay than others. They're also known for paying half than the market rate for contract work too.

I think Intel is more competitive for process engineers and semiconductor manufacturing engineers from a compensation perspective.

Is Intel's pay low or has the FAANG infinite-money glitch fucked up the talent market?

I'd say the pay is on the low side even when comparing outside the FAANG. Globally tech wages went up but Intel didn't budge due to long standing poor financial performance (see stock price since 2000) leading to a slow rot of their core strength.

In a direct dollar to dollar conversion Intel in the Bay Area (the highest paying location) pays pretty much exactly 2x in raw salary for equivalent levels to TSMC roles based in Taiwan. That might sound like a pro-Intel comment but the simple fact is that it's a lot cheaper to live in Taiwan. 2x Taiwanese wages are not going to entice anyone to move to the highest cost of living region in the world. TSMC clearly has amazing talent and Intel are not only failing to compete against the other US tech giants, they can't even entice from lower wage regions of the world right now.

It's pretty obvious that there's talent Intel needs and if we want to onshore the production from Taiwan we need that talent but Intel isn't coming close.

Very interesting. What are the contributors for high cost of living in the Bay Area?

The main contributor is high real estate prices. Much of the value generated by tech companies is eventually captured by property owners. Geography and open space preserves prevent building out anywhere within easy commuting distance. Politics prevents building higher density housing in most neighborhoods.

The secondary contributor is high taxes. The Bay Area, and California in general, isn't the worst for taxes but in terms of total tax burden (income tax, sales tax, excise taxes, mandatory fees) it's near the top. Especially because state income taxes are no longer deductible on federal income tax returns.

Are the real estate prices high because of high salaries? This is what I'm getting at- the infinite money glitch tech salaries skews a lot of things downstream.

Homeowners in the Bay Area.

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