Yes. There used to be a saying the most expensive Fab ( or factory ) isn't the most advance Fab, but an empty Fab.
You cant built without first ensuring you can fill it, you cant fill it without first ensuring you can deliver. And Intel has failed to deliver twice with their custom foundry. Both times with Nokia and Ericsson. How the two fall for it twice is completely beyond me, but then Intel are known to have very good sales teams.
Intel will need another Apple moment that has huge demand, little margin, but willing to pay up front. On the assumption that Intel is even price competitive. The Apple modem may be it. But given the current situation with Intel as they want to lower Capital spending I am not even sure if betting on Intel is a risk Apple is willing to make. Comparing to a stable consistent relationship with TSMC.
Which is super interesting/ironic with the entire reason for an “apple modem” is due to Intels failure there a decade ago. Bonus irony for the subsequent acquisition.
You can't start a war when you are truly broke, much like China is today. And China is aging super fast, unlike Germany or US during the 30s.
They're undergoing a difficult time sure, but broke seems like a stretch.
Japan has struggled for 30 years, but during most of that time have they been broke? Most countries in the world would love to "struggle" like Japan.
What does broke mean?
China still has a currency earning export juggernaut and world class companies.
And, they build everything they need for war.
Russia with its energy and China with its manufacturing has sufficient assets to wage a World War 3 whether the U.S. wants it or not.
Wars aren't financed the same as peacetime economies.
Countries impress factories and manpower into service.
In some ways, if your country is sufficiently self sufficient, it's much cheaper than running a peacetime economy.
Of course, if you lose, then you're wrecked.
Having debt to GDP ratio of 310% and local governments being unable to pay out salaries for many months is a big sign of being broke. (google or chatgpt the salary news, they are everywhere)
Consumer spending dropping 20% y/y in November in Beijing and Shanghai is a sign of being broke.
52,000 EV-related companies shut down in China in 2023 and an increase of 90% on the year before, where most EV companies were the targets of government subsidies, is a sign of being broke.
30% drop in revenues from land sales in 2024, which the local government derive most of its revenue on, is a sign of being broke.
China is not self sufficient; it imports 80% of consumed soybeans and other food products, and 90% of semiconductor equipments. Nor is it even remotely at the same level as Japan when Japan entered the lost decades. 600M Chinese citizens earned less than $100/month as of 2020. Recently, a scholar reported 900M Chinese citizens earned less than $400/month.
How would you handle the eloquent counterargument that spiraling deflation is not a sign of being broke? Deflation doesn't, in and of itself, signal anything except that the real value of a currency is going up.
China is one of the worlds largest creditors [0]. They may have a lot of organisational problems - I'd go as far as saying they are guaranteed to given they are quite authoritarian. But they aren't broke.
None of those metrics signal problems in and of themselves, and when put together ... they still don't. The consumer spending drop is the closest to something that might be a problem but it needs some supporting data to make a case.
[0] https://en.wikipedia.org/wiki/Net_international_investment_p...
China being the largest creditor doesn't mean much when a lot of their debt is issued to belt and road countries that can never be paid back, and will be written off in the future. It does have a large US debt holdings, but that has shrank from 1.27T (2013) to 772B (2024), and a large part of that being used for cross border transactions.
Individuals have a problem. Corporations have a problem. China may or may not have a problem. It depends on how reasonable their bankruptcy laws are. Cleaning out the system of people who aren't using capital effectively is a healthy thing to do.
And I have to say, this idea that we should focus on China's debts and dismiss their credits is suspect. I mean sure, if we ignore all the assets and income streams then they do have a problem. But that isn't reasonable. You can't ignore the strengths to make an argument they are weak.
If we are talking about China's credit, China has a lot of subprime loans to belt and road countries that have very little income, and lot of subprime loans to their citizens, which recently a scholar reported that 900M of them make less than $400/month.
If China has to take decisive steps to preserve whatever craziness is going on in the mainland, they're going to be preserving a system that has at least 10x-ed their wealth over the last 30 years while producing vast amounts of real capital that has catapulted their living standards up to a much more reasonable standard.
I wouldn't necessarily gamble on China because the system doing well looks unstable and could veer to disaster at any moment the central bureaucracy does something stupid. But we don't have strong evidence of a problem yet. We've got strong evidence they aren't acting like the US, but the US hasn't been setting an inspiring example in decades. As with a lot of economic problems, most of the damage from 2007 was doubling down on failing strategy rather than taking the hint that something needed to change.
And I'm not seeing evidence here that China is broke. They might muck this up, always an option, but they have all the tools they need to succeed in principle.
this is disinformation. source: relatives that were alive in California and other states at that time
The chip technology sanctions might slow development in that area in China, but I wouldn't count on it.
Here are some actual experts take on China: Longtime China bull Ray Dalio fears economy faces problems as severe as Japan in 1990 https://fortune.com/2024/09/18/ray-dalio-china-property-bubb...
or Private equity investors trapped in China as top firms fail to find exit deals https://www.ft.com/content/0575e216-8dae-4df6-bf50-312f78468...
or Starbucks reportedly mulling China business stake sale https://www.worldcoffeeportal.com/Latest/News/2024/November/...
Basically what would it take for Intel to still have Apple as a customer even if Apple made their own ARM designs…
> TSMC have red hot demand, it’s not hard to understand their urgency in setting up new fabs, wherever they may be. Intel don’t have the same incentive (...)
This is Intel's real problem.
They are also a competitor to many of their potential customers.
So, Intel needs to advance their foundry tech and they still may not get customers.
They do it all the time when they change nodes.
It is not that it cant be done. It is not reasonable or cost effective to do it without some clear incentive.
Intel doesn't have demand because they only make Intel chips, and they haven't been doing too well lately.
I think realistically you wouldn't port the exact same design between manufacturers. That would be a waste of money unless one manufacturer is really rinsing you.
More likely you'd switch manufacturers when you planned to switch process nodes anyway, in which case the increase in workload probably wouldn't be too bad.