Intel might be too big to fail
tomshardware.com
tomshardware.com
Remember when we did this in 2008 under the Obama administration? We gave them $10bil and they paid out "contractually obligated bonuses" with more than half of the money? https://www.theguardian.com/business/2009/jul/31/wall-street...
Just let it fail. If you're really paranoid, pass a law preventing and foreign buyers from snapping up the ip or fabs and we'll just fine, but that's probably not even needed.
How about we do something about the financial hackers who are just laughing their way to the bank either way?
On the surface this seems reasonable. Give $50k gift to your local wildlife sancturary for example, and get invited to the annual fundraising meal.
Looks like the big loopholes involve things like 501(c)(4)s
Without spending too long trying to workout the loopholes, it seems the larger problem is with the definition of a charity in the first place?
Any income the government doesn't collect is made up for by the middle and lower class and/or more debt which increases inflation, which is mainly a middle and lower class burden.
For a guy who claims everyone should pay their fair share, he sure takes advantage of a lot of loopholes which he probably helped pay to have written.
He's an OG corporate raider and should be thought of as such, rather than a benevolent capitalist.
hopefully this is sarcasm
We have gone from people dying from starvation to complaining that not everyone can buy a house. Nearly everyone has a universally connected borderline supercomputer in their pocket.
Meanwhile in capitalist China[1], they're so great at building homes that there are entire cities with barely anyone living in them, "ghost cities". Insofar as a tight housing market contributes to homelessness, it's clear that it's caused by US/Canada specific factors (eg. NIMBYism, building codes, and environmental regulations) than capitalism.
[1] Even though ostensibly it's "socialist with chinese characteristics", for all intents and purposes the real estate sector is capitalist.
but you are right that the capitalist market does restrict the supply of housing because people buy them as investments
also, the ghost cities is way overblown -- they just took time to fill up
Fentanyl and meth imported from China and other countries
EDIT: For naive downvoters. It is an observable fact. Drugs are destroying people and causing homelessness. I have witnessed it first hand.
https://www.youtube.com/watch?v=p5AeGKSDVdE
https://www.youtube.com/watch?v=SwlIAjcYypA
Look up "Philadelphia zombies"
In my ex-Soviet country you were guaranteed to get a free apartment provided by the government. Everyone I know who lived in a city got one, right up to 1991. All you needed to do was to register in a queue and wait for a few years (2-5 depending on several factors like family status — single moms were prioritized, for example). Now we're complaining that "not everyone" can buy an apartment (forget a house), just like you. Not just "not everyone", it's out of reach for most people, and things keep getting worse. At least we have jeans and burgers instead, I guess.
Everyone is free to their own opinions, of course – and I’m not wholesale defending communism as it has been attempted – but I find it odd that something which is supposedly so awful can’t just be left alone to wither on the vine, and prove their point.
not exactly
the US and communist Russia were allies in WW2; the US did intervene in Korea and Vietnam but that was about maintaining a global edge over Russia -- Americans didn't give a fuck about whether it was good or bad for the people of Vietnam
Neither Iraq nor Afghanistan were communist.
Chile and Nicaragua are examples of when the US intervened to overthrough a democratically elected communist government.
Cuba actually outperforms its non-communist former slave colony neighbors (Jamaica, DR, Haiti), which is especially impressive considering the never-ending sanctions from the US.
> w/o also numbers on what it cost to live per day.
This is what “PPP” is all about, that’s referring to a normalized purchasing power parity that is specifically designed to help you understand what $7/day actually means: it means what you think it does, and it is supposed to compare directly to the amount of money it costs you to feed yourself every day.
the main reason why the US became the uncontested power of the 20th century was WW1 and WW2
the socialist policies implemented by FDR saved the capitalism by making it less capitalist
I'm ok with them, but they should not use their money against the rest of us.
Because when we pay for their wealth, then there is an accounting step missing somewhere.
Which is why letting it fail and letting the investors feel the pain is a good lesson: don't invest in schemes you don't understand and don't have transparency into.
If you want to be pedantic, heeding this lesson is what got Intel into this mess in the first place. If Intel bought EULV fabs from ASML a decade ago, they theoretically could be competitive with TSMC. Intel didn't invest, citing how poorly-understood and opaque EULV was and assuming they could beat it with another process. That miracle process never materialized, and now Intel has learned that without risk you get no reward.
Intel's decision wasn't even irrational, either. EULV is poorly-understood, and competing with it would have avoided the TSMC/ASML integrated monopoly that effectively manifests today.
TSMC's 7nm where they jumped ahead of Intel used quad-patterning DUV which is also what Intel was trying. TSMC only started to introduce EUV at 6nm and 5nm which is when ASML had made great breakthroughs and vastly increased WPH. And even then EUV was only used sparingly at the most critical layers. Because other problems were still being solved like uptime and compatible pellicles.
If you want to blame Intel's decisions then look at their use of cobalt contacts or COAG use. They tried to do too much at 10nm when shrinks were getting harder.
I really don't like those protectionist arguments they do nothing good for any of the parties involved, merely raise the prices to consumers and deprive them of choices.
If they do, they shouldn't rely on publicly traded companies and put them on support line on taxpayer's money.
Hundreds of thousands of people without jobs? Let it fail.
No more domestic semiconductor company? Let it fail.
No more domestic aerospace company? LET IT FAIL.
We keep avoiding making the hard policy decisions by funneling taxpayer money into the hands of the already-wealthy who promise that this time it’ll be different, this time they won’t give it to shareholders and payout bonuses.
Let it fail. Once hundreds of thousands of Americans are jobless due to executive mismanagement and shareholder greed, will actually meaningful and impactful policy be made.
I still support letting Intel fail, but I have absolutely no confidence anyone will let it happen.
So nationalize them and remove the waste
It would be different, of course, if intel were the bleeding edge of innovation.... but that hasn't been true for about twenty years. Maybe longer.
The mismanagement and waste come from a Congress more obsessed with its re-election and petty politics than it is actually running a gargantuan empire in a sustainable manner, not the agencies themselves, with one notable exception: the Department of Defense. That is a profoundly mismanaged and exploited department that drains valuable taxpayer money into fantasy boondoggles meant to get people promoted and swindle ever-more income from taxpayers in the process.
At the very least, the government should be the baseline option, with Capitalism competing against it on either efficiency or outcome, ideally both. Instead, what we have are Capitalist companies who game the system to extract more wealth for themselves and from each other, and demand the government cover their own mismanagement under the guise of “National Security.”
They cannot have it both ways. If they’re critical to the security of the country, they cannot exist as private enterprise. If they want maximum profit, then they cannot be of import to the government.
If you gave google the authority to jail customers who didn’t buy their services with 25% of income, even google might provide some customer service, but would surely provide better api’s.
It is one of the most cost effective agencies because their entire reason d'être is finding missing money and collecting it.
It doesn't really say anything about them being one of the most effective in the sense of good management and having minimal waste. I had to deal with them as an immigrant and it was a nightmare of wait times.
Perhaps we need a cycle of allowing capitalists to remove waste, nationalization to remove profit, and then capitalists to be allowed to begin again removing waste.
Intel switching to TSMC probably would have sidestepped their 10nm fab failures, and the resulting design pipeline bubble that meant a lot of stagnation after Kaby Lake instead of the tick/tock(/tock) cycle of sort of annual improvements.
But, even if Intel was still doing its thing right, Apple prefers to vertically integrate, and Apple has a niche where their cpu requirements are different enough, that a custom solution is better. AFAIK, Intel hasn't been willing to make really custom CPUs. The Apple cpus target a lower clockspeed, and that enables a smaller chip, and makes wider execution more feasible, and generates less heat. Intel probably wasn't willing to make a high performance but clock limited design. And Apple might not have wanted to have people compare their laptops with an Intel CPU that only runs at say 3GHz when everyone else is using chips that turbo to 4.5Ghz.
It would, but it would also drain a lot of investor confidence. Intel pulling the TSMC card in 2024 is acceptable, or even desirable, from a shareholder perspective. Doing it in 2017 would have been jaw-dropping, even if it came with the advantages of TSMC 7nm that AMD's mobile chipsets boasted. It might have been the right call, but it would be a kick in the pants to their fab business and a terrible omen of things to come.
> But, even if Intel was still doing its thing right, Apple prefers to vertically integrate
100% agree, and I feel like it's more to my point. Intel was a holdover from an era where Apple had to ditch their reliance on PowerPC. Buying pre-designed chips was an opportunistic success story on a high-margin product like the Mac, and it worked both ways until Apple started designing their own cores. Once Apple could ship an SOC that outperformed Intel, it didn't matter how much it cost to make because there was no middleman to pay. By any means necessary, undercutting Intel was a business imperative for Apple.
I guess the ultimate irony of this is how I hear people begging OEMs to license ARM tech for PCs now. Intel failed as a rent-seeking middleman for high-performance core designs, so now they will be supplanted by Arm, a rent-seeking middleman for low-performance core designs. All Arm Holdings has to do now is buy a fab and they'll be a dead ringer.
-Intel Fails
-Production stops worldwide. (Not just development)
-US scrambling to sort out the supply chains
-China invades Taiwan
-US Fails
Intel must be replaced domestically. At least wait until there is another fab within the US mainland.
All the more reason to let Intel (or Boeing, or whoever) fail hardcore while we have time to adapt. Intel falling isn’t going to result in a Chinese invasion of Taiwan, but it would smack the hell out of politicians and consumers both that globalism, while a nice idea in times of peace, is not compatible with interests like National Security and the growth of the Middle Class.
Here's a tip; part of that "Western Capitalism" thing is governments sensibly not binding themselves to extreme libertarianism and being willing to protect strategic industries when necessary. Maybe you think that's not true capitalism or something, that it's not fair, but so what? The stakes are too high to fuck around with letting strategic industries fail out of some insane commitment to ideological purity.
> Here’s a tip;
You’re not looking for discourse so much as to have someone agree with your anxiety about a perceived potential conflict and its stakes, and I am not going to be that person to you, sorry.
I made my statements and I stand by them. If you’re extrapolating to the extremes to justify your point of view, then I hate to break it to you but you’re treading ground my OCD has already mapped down to the millimeter. The “National Security” defense is not a valid one absent plans to prevent the exploit of that reasoning by bad actors.
My point is that "western capitalism" isn't an ideological suicide pact. Letting important things fail because you want the system bound to some rigid of rules isn't an acceptable option. Rules exist to serve people, not the other way around.
And that's assuming that the government protecting a strategic industry from their own blunders is even breaking the rules. It isn't. It's one of the characteristic behaviors of "western capitalism". We're not talking about "Ayn Rand's capitalism", nor "Capitalism as Stego thinks it should work".
Their contract-fab business has been a sporadic joke up to now. Until there's an established toolchain and pipeline, and a history of reliable delivery, will there be anyone designing parts to use the Intel fab capacity?
What policy would that be? Policy to stop large companies from mismanagement golden parachutes, and people losing their jobs due to shareholder greed? I'm all for it, but those are features, not bugs, of the rent-seeking capitalism on which the US is built.
Weird to see this framing for something that was promised as a condition of employment.
The USPS gets me my mail regularly. Not sure what else it should be doing. And yes, paying people pensions you promised them is a good thing to do and has nothing to do with mismanagement. Taking the money you had already promised for pensions to instead pay shareholders or executives seems to be mismanagement to me.
With that being said, the situation of the USPS is not simple - it's been suffering political interference from elected officials for literally centuries. A very good example of why giving too much oversight power to elected officials and having too many political appointees is very dangerous.
Unfortunately, that policy is wholly incompatible with the current wealth-extraction and funneling model of the present-day economy, and that’s why it won’t happen until it’s so irreparably broken that the entire global status quo shifts to adjust.
But if you want to be pedantic it’s both nationalized and private. It depends on whether you’re referring to the military or industry.
When you create these hybrids of business and government, corruption is inevitable.
That wouldn't be possible if those entities were simply nationalized. But since the gov is a customer, and them a producer, and the gov NEEDS the thing, and only the private sector can give the thing, it's a money bath.
Of course it's really full circle, because while the industry is private it's actually funded entirely by taxpayers. Because the customer is the government. So the corps have a strong incentive to be as inefficient and greedy as possible, and you actually pay for that.
I don't have a pat solution to this, but for example, Boeing, Lockheed Martin, Northrop Grumman, and Raytheon have little reason to improve when they have a captive customer. Raytheon recently agreed to pay ~$1B in penalties for illegal exploitation of their position and the market doesn't care: https://www.justice.gov/opa/pr/raytheon-company-pay-over-950...
Pure capitalism for these kinds of uniquely critical products and services doesn't seem like the right answer.
Extremes rarely work; rational compromise is what moves the needle forward, bit by bit.
There’s more at stake than money when it comes to companies like GM, Boeing, and Intel.
Wipe out existing shareholders and management and start over like GM in 2008, letting Intel die would be a gift to our adversaries.
Are people really still citing this website as a government failure? It had some scaling issues at launch that were fixed within 2-3 months and has been serving tens of millions of Americans without any major incidents since then.
It's not really better on the other side, and we need change somewhere.
If things get bad enough for Intel, the precedent that makes the most sense is to follow the model that was used with GM: the company enters bankruptcy, existing investors and creditors are wiped out, and a new corporate entity backed by the fed.gov steps in and assumes the assets and operations of the company. Once things have sufficiently stabilized, the government can then divest its ownership in the company.
Intel is economically and strategically important enough that just letting it collapse without a plan to pick up the pieces is a serious footgun. We have a framework for handling this kind of situation that has been shown to work without rewarding those who caused the problem. It'd be silly not to use it.
Managers and executives are different groups of people.
Everyone wants better management, but it wont magically solve itself. Those with the power to drive that change need to have an incentive to do so.
I get that there is probably only one top-end fab in Intel and that would be hard to split across two entities.
But if you split Intel into three entities, they might (gasp) hire a bunch of the engineers that have steadily fled intel or be chopped off in shortsighted layoff rounds. You might get (gasp) innovation.
If you give all three the access rights to Intel's IP, things would probably be FINE in the long run. Give three separate companies a couple fabs and the IP, and see what happens. Intel has FIFTEEN fabs. So hand five to each of them.
Intel is a shell because existing management is financial "wizards" and war-on-labor MBAs that are trying to manipulate the stock price to hit options targets.
If you split the companies, they have to compete on engineering, or they die. You can probably also wipe away a lot of the management because the companies will have to do "real work" in the medium run and their "skillsets" won't really apply.
The MBA types will all say that's impossible. IMO that's why we should do it, because all the people that failed the industry and company are opposed to it.
It’s either bailout or not.
When they accidentally make something their customers like (the Bolt, CarPlay), upper management intervenes and discontinues it.
The US would be much better off if the engineers and factories they are squandering were allocated to other companies.
Haven't seen that before.
Excellent response, gave you the upvote so others will hopefully read it.
The state probably did a better job than a private takeover could have because: - They had effectively infinite backstop-- they could afford to spend years and front load a lot of costs to fix the mess - They had a mandate to restructure the sector beyond a single company. I'd expect a nationalized Intel would have an easier time pivoting to new models, while private investors might be too afraid of killing their current golden geese for, say, a full fab spin-off or becoming a more aggressive x86 licensor.
Exactly.
Then we should have let all the startups that had their funds in SVB bank fail, instead of another pseudo-bailout that occurred in March 2023, given that FDIC insurance did not apply to them given the majority of their capital is over the limit.
I don't know if I agree with the gov making them whole, but it isn't really comparable to the Intel situation imho. It's not like the gov bailed out SVB and its investors itself.
Question: what about if the thing they’re worried about isn’t about letting it fail, but rather geopolitical and military risk? Could the lead time to get the new companies up and running to fill In the gap be too long for them to not consider it too big of a risk of letting them fail?
geopolitical and military risk
There is a non-zero chance that China decides to simply seize Taiwan in the next decade or two.
Militarily there's absolutely nothing to prevent that unless we're willing to go nuclear or launch a land invasion of China (lol) or something; the idea of our carrier groups being an effective deterrent under a constant rain of missiles a couple hundred km from China's mainland is beyond delusional.
Since China & USA can't invade each other (LMAO) and a nuclear exchange would be suicide, any conflict in the South-China sea would have to be standoff - lobbing cruise missiles at the other non-stop. And the US doesn't even have that front locked down.
Despite spending $800b/y, the US military has a stockpile of just 4k Tomahwaks (as of 2020). If we translate China's production-spamming to the Taiwan situation, then we can safely assume they have a stockpile of missiles that dwarfs that several times. And since they're projecting power in their backyard, it'll be a logistical walkover, especially with how the CCP tends to get things done quickly and at scale.
Sorry if this feels off the point, but your comment just got me thinking about the SCS/Taiwan situation.
The idea of winning a conventional war in China's backyard after 10-20 years of them building toward it is absurd. And nuclear war is uh, nuclear war. Not really a "winner" there.
The only thing stopping China is obviously the huge financial incentive of losing their biggest trading partner(s). That will obviously be an enormous loss for them. At some point though they may calculate that the long term gains are worth it, I don't know the calculus there.
Just decades of sleeping at the wheels finally catching up.
So China dosen't have time on it's side. A hot war in one of the most busy regions would likely immediately cause a global recession as supply chains collapse, and the US can blockade oil and resources from the Middle East. This isn't like sanctions, if it goes on long enough. And remember that America can continously target and destroy their infrastructure and naval dockyards, China cannot. They've got great industrial capacity, but this war likely won't last long enough for them to actually finish building new ships, if the facilities even exist by then.
Well, some Chinese nationalists argue that strikes on the mainland will cause the CCP to start firing nukes at West Coast in retaliation as some sort of "city-trading" game, and that the Chinese will be more willing to sacrifice millions than the Americans at that, but we'll see if we get to that.
It would also be a world war at that point, so, I don't know that their plans would be restricted to US targets.
China knows that the cost would be devastating for them and the larger world economy as well, for the reasons you said. It would be at least a decade or two until the world economy recovered.
But China seems able and willing to play the long game in ways that the US (with our shorter election cycles) fundamentally cannot and if they are thinking strategically they know that this is one of their key advantages for this sort of conflict. I am not entirely sure that they wouldn't be willing to trade, say, 10-20 years of darkness (Cultural Revolution-style?) for 100 years of Chinese world supremacy atop a new world order.
It would also be a world war at that point, so, I don't know that their plans would be restricted to US targets.
China knows that the cost would be devastating for them and the larger world economy as well, for the reasons you said. It would be at least a decade or two until the world economy recovered.
But China seems able and willing to play the long game in ways that the US (with our shorter election cycles) fundamentally cannot and if they are thinking strategically they know that this is one of their key advantages for this sort of conflict. I am not entirely sure that they wouldn't be willing to trade, say, 10-20 years of darkness (Cultural Revolution-style?) for 100 years of Chinese world supremacy atop a new world order if (huge if) they thought it was achievable.
But they are also not dumb, and won't fight a war they can't win.
I'm old enough to remember people's endlessly repeating this about Japan in the 1980s.
Things are building toward war with China over Taiwan, with TSMC being a major factor.
Militarily there is nothing short of a full-scale open war with China that can prevent this and perhaps not even that.
We're not living in a playground with rounded corners, sometimes there are bad choices and there are even worse choices. You might feel moral indignation at the bankers who "got away" with the GFC, but is the feeling of moral satisfaction worth realizing a second Great Depression and potentially WW3 to come out of it?
The GFC happened due to the improper conduct by ratings agencies that gave subprime loans much higher credit status than should have gotten, overloading banks with toxic CDO assets that lead to a major systemic risk once the housing bubble popped. 10 years later, perhaps the executives got away with "golden parachutes", but we're not dealing with exotic derivatives much anymore, the biggest bubbles are just in pure hype stocks or index funds, whose risks are very much anticipated and do not pose a unknown systemic risk poised for incorrection. So I would argue that lessons were learnt.
The US cannot afford to lose some capabilities, like spaceflight. Or production of certain hardware.
You can theoretically outsource them to allies, but some of those allies may be in strategically precarious situation. Like Taiwan and South Korea, the two giants of advanced semiconductor production. Or Finland, the only nation which is capable of producing advanced icebreakers for reasonable price and on reasonable schedule.
Also, an adversary like China may be able to kill a healthy US corporation by massive dumping. Then what?
Any bailout should happen post-bankruptcy. Shareholders and executives primarily receiving stock based compensation get wiped out, employees and the fabs get saved.
If anyone is worried about supply of pure intel silicon, the IP can be sold off or placed in the public domain to keep the ossified 8086 nectar flowing.
And fabs can still make chips under new ownership.
Maybe someone will succeed in a GPU plan to challenge you know whom.
That is, while of course Tesla and SpaceX had to do R&D to have an advantage in the market, rockets were already invented and so were electric motors/batteries. It feels like the hardcore engineering that goes into a new process node or whatever new tech we need to get to the next iteration of Moore's law is even less predictable and more expensive than either cars or rockets.
Afaik Intel's mismanagement is only one piece of the puzzle. Correctly deploying capital to get to the next process node profitably isn't easy. Besides mismanagement there must be other reasons why global chip production is an industry that keeps seeing consolidation at the top?
(edit: formatting)
I guess that's what they will end up doing but let's pause for a moment and contemplate the fact that they are exploring the options. Intel's strategic importance is recognized and so it's obviously a good idea to explore the potential for making the situation less bad.
For me, this situation highlights the tension between laissez-faire capitalism and systems of economic planning where government interventions can be used to stimulate economies strategically.
I think that in the USA, gov intervention tends to be viewed in ideological terms. Whereas in Europe it's mostly seen as an important economic policy tool. This is a broad generalization of course.
I would like to see more insightful, strategic, long term economic planning. I'm keen on the ideas of Community Economic Development (CED) [1].
If CED is done properly then everyone benefits. The problem is that government bureaucracies have historically been terrible administrators and partners.
The Intel saga points to the need for enlightened change in all these areas: economic policy, civil service effectiveness, community economic development, etc.
[1] https://en.m.wikipedia.org/wiki/Community_economic_developme...
AFAIK in finance, "bonuses" are a significant part of compensation, similar to RSUs in tech. So while it might sound great to hose all the greedy bankers, all that would encourage is for people to jump ship, making the prospect of a recovery (which is why you bailed it out in the first place) even harder.
What are you even talking about?
>Just let it fail. If you're really paranoid, pass a law preventing and foreign buyers from snapping up the ip or fabs and we'll just fine, but that's probably not even needed.
Yea, competitors like China will definitely respect your IP laws
There was a second Treasury program where they forced all the banks to participate so that there wouldn’t be a negative stigma attached to the banks that actually needed the assistance.
Companies historically are expected to pay dividends, at least when their business is doing well. Business at Intel was doing well for most of 1990-2017. There was some time after the Pentium 4 stopped scaling before the Pentium 4M offered a recovery, and the Itanium mess; but overall pretty good until 2017.
When a company with growth prospects does well it should invest those $$$'s into things like R&D and expansion. Companies that pay their profit as dividend are generally not expected to grow as much and their stock prices (P/E) tends to reflect that.
That said the taxation aspect is maybe a problem and should be addressed if it's not working as intended.
Yeah, buybacks are the new boogieman. Let me decide when to take the tax hit on an investment and not be forced.
I think that buybacks definitely create a massive conflict of interest for C levels remunerated based on share price or EPS, and I dislike that I must sell to realize any gains. But perhaps this is a niche position .
Starting from 1990 seems like a weird starting point, because it includes much of Intel's heyday when their profits were arguably well deserved. Is the implication that every business shouldn't have profits and should plow every cent back to R&D?
Instead of assuming my comment is a generalized view on how businesses should operate as whole (and not the subject of the piece), perhaps take a moment to consider how the magnitude of buybacks--in the face of stiff competition, that have now leapfrogged them--is directly correlated to the mismanagement and dysfunction within Intel that leaves them unable to rise to the challenge the country demands.
Stock buybacks benefit general shareholders (i.e. beyond employees) since they push up stock value without causing a taxable event. The alternative is dividends which are immediately taxed.
It's not even that Intel aren't selling chips, I'd guess that they are still massively outselling AMD. The fact that Intel can't make money is a failure of management and I feel like the media needs to attack that much harder than they have been. The type of management which have been prevailing for the past 20 - 25 years aren't going to save companies like Intel and Boing, both companies that should have be thriving, but they've become complacent and forgot about the products, focusing on short term stock value.
Also Intel doesn't appear to make an actual lose and can still pay dividends in some quarters, so they aren't failing that hard. A turn around in sales is needed, but I don't feel it's as bad as it's made out to be. The media makes it sound like bankruptcy is right around the corner.
Fabs are expensive, and much more so if in the US than in Taiwan. It's costing TSMC $65B to build one on Arizona.
https://finance.yahoo.com/news/intel-spent-over-160-000-1147...
Depending on TSMC in Taiwan is a disaster waiting to happen, and it also makes a great power conflict there more likely as the asymmetric advantages increase for non-western powers if they were to capture the island. Game-theory would probably suggest that the west should do whatever they can to bring fabrication home, because subsidizing fabs is less expensive than war.
Yes, I agree. I was joking that nobody wants the hard work of actually fabricating the chips though.
Hyperfinancial capitalism is doing much better at destroying capitalism than any communist has ever achieved.
I have no idea what kind of black swan will finally catalise some change, it's getting pretty clear the flavour of capitalism applied from the late-80s/early-90s is cracking...
I’m sure they “can” be. That doesn’t mean it’s a simple matter to ensure it will happen. Misdiagnose the problem, trust the wrong leadership, or fail to secure sufficient financial backing and the venture may become unsalvagable.
AMD’s return is really exceptional. It was by no means sure to work, and I don’t know if anyone knows exactly what went right that made the difference compared to countless other failed turnarounds.
Ironically, I do think widespread confidence that the situation can definitely be salvaged is a detriment. It prevents taking desperate measures, which may actually be the necessary steps.
Because AMD is fabless and Intel isn't. The latter is spending huge amounts of money to increase their fab capacity, and have positioned themselves to succeed only if they can get external Foundry customers.
If Intel split into two companies, then yes, your point is valid for the fabless portion. But it would also mean the fab portion would die almost immediately (they currently are operating on a loss) - they need both the US bailout and the fabless revenue to survive.
AMD was nearly dead a long time before the Ryzen. I did a comparison between them and Intel when I was in undergrad in the 90s. My conclusion was long Intel and AMD would be lucky to survive. At that time, Intels innovation on top of their yields was simply unmatched. What saved AMD then was the Athlon, and their bet on 64bit extensions to x86 (instead of banking on the compiler to do all the work a la Itanic).
The point is that fortunes can change quickly, and not all because a team or company is good or bad. Everyone makes bets with the information they have and hopes the market and technology move in their favor.
Intel's losses all revolve around upgrading and spinning up their new fabs, fabs for which there is no other global competition besides TSMC and Samsung. The latest process was delayed.
Once they start filling orders, they will be the ones filling the hole that could be left in US microchip capabilities that are in imminent danger, being largely based in Taiwan.
Their new desktop chips are cracked, their Gaudi 3 accelerators, that just started shipping five weeks ago, are a shade better than H100's, for half the cost, and with improved and much more affordable capabilities for interconnect, in addition to other features.
It's incredibly important for the US to continue its push to building up the domestic TSMC, Intel, and related chip infrastructure that it has so far funded (though, has largely not paid out, contributing even further to Intel's current situation).
Perhaps, if tariffs really do come in, we'll see the many fab-less chip designers that people are praising in this thread bring their manufacturing back to American manufacturers. As they damned well should.
What's happening?
The companies you're used to are aging. New companies are supplanting them as new ideas win. More and more computing is done on phones, meaning Apple, TSMC, Qualcomm, and others are replacing Intel.
Adobe is being supplanted by Pixelmator, Blackmagic, and even Instagram.
Some of Boeing is being supplanted by SpaceX. Some will be replaced with companies like Boom, and Anduril. This is the hardest one - military contractors have a thumb on the scale from our government.
What you're seeing is not decline - it's that these industries are changing in ways that are hard to recognize.
My only question is do shareholders have enough patients to allow Pat to do the right thing.
Honestly: Screw the shareholders, this is entirely on them and their short term thinking. The stock market is so broken, with it's quarterly mindset. Businesses needed long term thinking and stability. If the shareholders feel that they need to make a profit trading short term, they can go buy f-ing Dogecoin and play the lottery.
These industries should be nationalized. Despite the naysayers there are plenty of nation-owned assets that work fine this way and if its this important then it sounds like a worthy candidate for it.
At one point Sears was THE place to shop for everything from back-to-school clothes, appliances and Christmas. In the early 2000's I would have thought you were either a giant fool, or a time-traveler, had you tried to tell me by 2024 Intel would be de-listed from the Dow and talk of taxpayer bailout or bankruptcy. They had a monopoly on PC/Servers. As crazy as it currently may sound but one day we could be discussing the downfall of Amazon, Microsoft and Google.
Does anyone know of good books about the business-cycle and life/death of companies?
But given the positions of AMD, Apple, and Nvidia, they aren’t. The only real concerns would be warranty obligations, but it isn’t like Intel would just disappear over night - they’d be gobbled up by somebody bigger (which at this point is literally everybody else in the industry) and presumably as part of an acquisition or Chapter 11 the buyer would have to agree to honor warranty claims for it to pass regulatory or court approval.
Gonna be one hell of a show watching them death spiral. 60ish years of inertia and corporate ego will will surely not go quietly into that good night, even when it’s inevitable.
As in, if a company receives a bailout equivalent to 50% of the company’s market value, all shareholders have their stake in the company decreased by 50%, permanently and irrevocably.
I'd be interested to hear why someone disagrees with me here to go along with a down vote.
In spite of that, I think this whole hand wringing is because "Intel is not Nvidia".
National strategic interest in both cases overrides near all
Aside from it leaving only one major x86 CPU manufacturer, the only thing Intel's absence would cause would be a massive amount of paperwork, as every system integrator under the sun has to figure out contracts with AMD.
And you're right about politically heated, thats probably the biggest problem.
Not to sound like a Trumper, b/c I'm not: The media crucified Trump for installing a tariff on Chinese solar centers, which were being produced below cost with state sponsored material and labor. The Chinese intent was to keep Americans from developing the mass manufacturing capability, but this played into the hands of the US Media who painted it as "anti climate change". We are our own worst enemy.
Not sure if Trump would actually be planning to add targeted tariffs or blanket tariffs. Hopefully not the later, if we're stuck with him rather than stuck with Harris.
Hard to imagine a startup raising that much money. And where's the IP going to come from? This is not like build a car factory.
Intel is one of those companies - where the gvt gets two board seats, while being close to a majority shareholder. not 50% but 40% ish.
I have libertarian leanings btw.
The capitalist class are the fucking NY Yankees of the world - never has so little been done with so much. What a bunch of greedy idiots running shit into the ground.