Intel delays $28B Ohio chip fabs to 2030
reuters.com
reuters.com
https://www.industryweek.com/semiconductors/article/55246295...
https://www.news5cleveland.com/news/politics/ohio-politics/o...
Instead impose tariffs and make building in the US mandatory.
- https://appleinsider.com/articles/22/12/01/apple-will-take-o...
- https://www.extremetech.com/computing/340975-tsmc-reportedly...
I am always amazed at how people that repeat this bullshit seemingly have no idea how trade works, but are always very confident in their sheer ignorance.
Do you have any references on this topic I can look into further? I find it difficult to articulate that particular behavior to management
Conflict of interest and bad accounting practices are the types of fraud being alerted to, but failure to perform apparently is not.
https://oig.justice.gov/sites/default/files/2020-02/GrantFra...
It led to some amusing stories like this one. [1] SpaceX were required to prove that Starship wouldn't hit a shark when coming down in the ocean. So they asked if they could have the data on sharks, but the answer to that was no - apparently it was pseudo-classified for fear that shark fin hunters might get their hands on it. It all comes off as a comedy sketch, but it's real!
Artemis will never go anywhere, but it won't be because of SpaceX. SLS/Boeing play a key role, and the astronauts they barely managed to send up to the ISS like 9 months ago are still stranded there. By the time they're ready to fly SpaceX will certainly be fully capable of single-handedly delivering people to the Moon completely obsoleting the point of the big convoluted multi-company mission.
[1] - https://x.com/SawyerMerritt/status/1847846282410258876
https://www.faa.gov/media/76836
“ 3.3.4.1 Impact by Fallen Objects Direct strikes by debris from Starship are extremely unlikely for all species of concern, fish, sea turtles, and marine mammals. This is due to the small size of the components as compared to the vast open ocean. If debris from the vehicle struck an animal near the water's surface, the animal would be injured or killed. As stated in the 2022 PEA, given the low frequency of the Starship/Super Heavy ocean descent and landing operations, and the fact that marine wildlife, marine mammals, and special status species spend the majority of their time submerged as opposed to on the surface, it is extremely unlikely they would be impacted. The relative occurrence of these animals at the ocean surface, spatially and temporally, combined with the low frequency of the Proposed Action, reduce the likelihood of impacts to extremely low. Additionally, there are no known interactions with any of these species after decades of similar rocket launches and reentries. Further, the projected landing areas for both Super Heavy and Starship are well offshore where density of marine species decreases compared to coastal environments and upwelling areas (FAA 2017).”
Pretty much every subsection of the report regarding risk to biological life ends on a similar note.
This means that so long as they keep working on the SLS and Orion, the money keeps rolling in. But if they ever succeed then their Golden Goose, of taxpayer money, dies. There was a recentish WSJ report suggesting that they are looking into spinning off/selling their space division, and it's probably related to this. Great legacy, but they seriously need a complete reboot in the present.
SpaceX by contrast is, more or less, in their prime. They're going to complete the project, not because of Artemis, but because they want to get people to the Moon as well as to Mars. It's just a part of their operational goals which they have been directly and working towards, with steady progress, for many years now.
Perhaps you prefer a world in which corporations can dump (even more) waste in the ocean?
That is immediately obvious to just about anybody with a decent head on their shoulders. But now actually proving that takes what almost certainly amounted to thousands (if not tens of thousands) of manhours followed by months of review, and adversarial engagement. It was the outright weaponization of government.
This, btw, is what leads to extremist viewpoints on regulation. Regulations, done in good faith, are a very good thing. But they can easily be weaponized both by the government against enemies of the state, and by other companies, in the case of regulatory capture, to prevent competition. And there is no entirely clear way to prevent these sort of abuses.
As for SpaceX, you're asking me to prove a negative which is impossible. But feel free to find a single-counter example to what I'm saying, as that would completely disprove it. The FAA suddenly decided to impose a 2 month delay to Starship on its 5th launch which was in no way fundamentally different than the priors besides a new splashdown location, and add a bunch of new 'concerns.' In another case the EPA came after SpaceX for "unpermitted discharges" of... oxygen.
And all of these new issues coincided exactly with the timing of the previous political administration defacto naming him an enemy of the state. There was nothing of a comparable scale in the past. Heck they even had a return-to-flight after a major mishap and mishap investigation that took less time than it took for the previous administration's FAA to determine if a shark might get hit by a rocket landing in the ocean...
So much of the Ohio population is hostile to the very acts like CHIPS which are funding this project and Ohio infrastructure generally. I have that on account of a couple civil engineers in Ohio who are friends and family.
The “Liberals” did it.
Kill Obamacare but don’t you dare touch my Affordable Care Act healthcare coverage. Etc etc etc.
https://www.mlive.com/public-interest/2023/04/hundreds-rally...
Now, I am not sure how long we'll have "the old guard" type guys like dewine, so this comment might not age well!
Mike DeWine is governor.
On the Federal level, Ohio has Representative Jim Jordan and the current VP of the US, J.D. Vance.
How do you measure that “the actual leadership [of Ohio] is fairly reasonable”?
The next presidential election is in 2028, not 2030
The people overseeing the CHIPS act have mostly been fired or flagged for firing. Many of them were in their “probationary” period because they were recent hires.
The CHIPS act can’t be instantly restarted when the next president takes office. It has to be rebuilt. It has basically been sabotaged.
Worst of all, it could become cycle. Trump / DOGE is basically doing a wholesale cleanse of left-leaning public sector employees at all levels, replacing them with yes men and cronies. A new administration will have to revert that, meaning firing and hiring and training people yet again. And an administration after that might try do undo that. What a quagmire.
In general it's a classic that left-leaning governments fix various policy and economic problems, which often carries big cost, which gets them voted out, and then the fruits of that labor are claimed by / wrongfully attributed to rightist administrations.
If a main part of your platform is that government sucks, you have no incentive to un-suckify it. Starve the beast.
Instead, it’s a crude game of corralling people with emotions.
It's election day, you get re-elected, rinse and repeat until the next generation has no memory of it ever being different.
https://abcnews.go.com/US/confinement-unbearable-migrants-de...
Almost no one wins from this. Rich people suffer the least as usual by having a diverse banking account, especially in multiple currencies. All working class is devalued so the only boon is jobless people who manage to find a job.
That or massive GOP voter pressure come 2026.
https://www.cnbc.com/2024/11/25/intel-close-to-8-billion-chi...
However I couldn't find the awards (and thus outlays) on usaspending.gov. I think this[2] is the CHIPS act account and you can see some general outlays per year there but Intel isn't in any of the specific obligations listed.
And even searching the award id or Intel in general as a recipient on the site didn't find obligations that matched.
However, page 112 of this[3] 10-K filing has the direct funding agreement (with award id!) and a lot of info about how payments work but no payment amounts. Page 30 seems to say they received $1.1 billion of the $7.9 billion in 2024 and another $1.1 billion for 2025 but I'm not sure if I'm reading it correctly.
[1] https://www.nist.gov/chips/intel-corporation-ohio-new-albany
[2] https://www.usaspending.gov/federal_account/013-0520
[3] https://www.intc.com/filings-reports/all-sec-filings/content...
The reason I'm curious about this is that in my understanding for a fab to become financially viable it needs to produce grotesque amount of chips.
Can America have state of the art fabs for a market of 340M people if the world becomes partitioned in the upcoming years? In Europe that was the main problem, people like to say that Europe lost on tech because of regulations but Europe lost on tech before EU become a thing, they simply didn't have a large enough local market for electronic components. Europeans got out of this market because it wasn't profitable, not because they couldn't figure out transistors etc.
ASML's EUV Lithography IP is provided on contract by LLNL, and much of that IP is owned and implemented by Cymer LLC, ASML's US subsidiary.
And it's individual nation states (in this case Netherlands) that can even make decisions on export controls, not the EU. In most cases, the Netherlands has largely been aligned with the US, and knows how to manage Trump thanks to Mark Rutte.
EU Member states zealously guard their sovereignty in defense/NatSec and foreign relations matters, so it's less a question about the EU and more a question about Netherlands/France/Germany/<insert EU state here>
> requires these things be made in China, Korea or Japan
Most of the supply chain is already dependent on Japan and Korea and has been for decades.
European players have largely been limited to legacy node fabrication chains because of the heavy focus on the automotive industry in Europe and the capital crunch during the Eurozone recession.
That said, there are a decent number of European suppliers (eg. Merck for chemicals, ASML for EUV Lithography, Zeiss for optics, etc).
>And it's individual nation states (in this case Netherlands) that makes this decision, not the EU.
That's the current state of affairs, it doesn't have to be the same in the upcoming months or years because "decades are happening in weeks" lately. The sovereignty stuff is what kept EU from becoming like USA but things are on move now. Check the approval ratings and trust of Europeans about EU and their local government and you'll see that Europeans tend to trust EU much more than the national government. EU is actually very popular with the general public, its the far-right and the far left that demonize it(they see it as an obstacle towards libertarian utopia or communism).
Also, what if they just don't care about the license or replace the licensed IP with something from Korea/Japan? What if they just clandestinely sell those to China?
If ASML loses access to the IP they cannot sell it in any market that respects IP laws, nor can it raise capital as it now has extremely legal liability. And if the Netherlands is ready to tear up it's IP laws, it's going to be de facto sanctioned by the US and the rest of the EU, because IP Law is one of the few things European nation states devolved to the EU.
Also, around 20% of ASML's headcount is in the US, and much of that is R&D and manufacturing specifically for EUV Lithography.
> The sovereignty stuff is what kept from EU becoming like USA but things are on move now. Check the approval ratings and trust of Europeans about EU and their local government and you'll see that Europeans tend to trust EU much more than the national government
The EU has a better reputation amongst the population, yet at the end of the day, no actual power aside from single market and norms alignment has been devolved to the EU.
As I have mentioned multiple times at this point, politicans and businesses do not want to reduce their power by handing it to the EU. It might be good for the EU member states at a macro level, but it creates a lot of losers at the national level. And those losers can vote for the AfD, RN, etc.
For example, for a unified European army, either France, Germany, or Sweden is going to have to sacrifice their aerospace giants because Dassault, Eurofighter, and Saab compete directly and ferociously, and always undercut each other. And for tanks, Germany has to either sacrifice the entire chain for Leopold or France has to sacrifice the entire chain for Leclerc.
All of these are tens of thousands of jobs in France, Germany, and Sweden, and no party wants to become toxic for a generation by become the party that sacrificed their voters with mass layoffs for the benefit of the EU as a whole.
Individual European nation states need to align, and they just are not because Defense, Foreign Relations, and Internal Security has always been the mandate of individual states.
> That's the current state of affairs, it doesn't have to be the same in the upcoming months or years because "decades are happening in weeks" lately
It definetly is, but not in a good way. The major EU states had an emergency conference after Vance's horrid comments at MSC to try and align on a boots on the ground policy in Ukraine, but it was shot down by Poland and Germany [0]
[0] - https://www.politico.eu/article/europes-leader-donald-trump-...
This is absolutely correct. That’s why the common EU military cannot be an EU equivalent of the U.S. military.
However, the EU itself is a novel and unique structure that was invented out of thin air. A common EU policy would also have to be a completely new model. One that’s closer to NATO but also has an actual common command with actual teeth that can call upon its French or German division to take certain steps that those divisions cannot refuse.
> that can call upon its French or German division to take certain steps that those divisions cannot refuse
A major additional issue is national constitutions as well. For example, Germany's constitution doesn't allow an expeditionary force outside of NATO territory, which pisses off France and Netherlands because they both have dependencies outside of NATO that face pressure from China (French Polynesia, Mayotte) and Venezuela (Dutch Antilles).
--------
And the question of Turkiye remains, becuase it's the only NATO state that has direct combat experience against Russian forces (Libya, Syria, Nagorno-Karabakh in 2016) and mass deployment.
Turkiye needs to be integrated as part of the EU's structure, otherwise the EU will continue to lack the heft needed to defend itself.
But Greece, France, and Cyprus will continue to veto Turkiye because of North Cyprus (Greece, Cyprus) and business+geopolitical conflicts (France)
Ironically, Germany has been quietly receptive to including Turkiye in the EU as German businesses and MICs are closely aligned with Turkiye.
It has been posted here many times that the US started the EUV LLC to research EUV and allowed ASML to join. ASML doesn't hold all the cards. I doubt Americans are stupid enough to let ASML walk away with all the EUV IPs.
In this unrealistic worst case, shut down the ability for ASML to raise any sort of capital by litigating in just about every market, threaten $60B in Dutch exports to the US, and threaten felony status for much of ASML, Philips, and NXP's leadership. Oh and nationalize Cymer LLC, as the manufacturing and IP for ASML's EUV work is in ASML's US Subsidary (Cymer llc [0]), not the Dutch parent that's a spinoff of NXP and Philips
[0] - https://www.cymer.com/
It's all part of the US holding in San Diego (Cymer LLC).
National Labs are part of the US Defense apparatus and have massive compliance and firewalling requirements, and constant audits.
Any attempt by ASML Holdings to exfiltrate data and IP from Cymer LLC (a DoE contractor) opens ASML leadership to criminal charges, and makes them toxic in any deal.
It might not matter to you, but it absolutely puts the Dutch economy at risk.
And anyhow, all the manufacturing is done in San Diego and Livermore anyhow.
USA is an important partner but nothing is more important than the wellbeing of the immediate neighboring countries because USA is actually a distant 5th trading partner for the Dutch with less than %5 of the trade, it is as about as important as Italy. You can't have prosperous Netherlands with struggling Europe.
I don't know why this isn't getting into your head.
Could you define "all"?
From your comment it seems all stories about ASML having a quasi-monopoly in lithography machines are nonsense. So it's the US holding the chip cards? That makes the China vs Taiwan debacle even less important to the US, since there's nothing to worry about.
They absolutely do, and it's becuase the US chose to give it to ASML Holdings instead of Nikon due to antitrust concerns in the 2000s-early 2010s.
> Could you define "all"?
Lithography machines are complex and filled with several parts. The primary part that allows you to do light based lithography is the Light Source - a very advanced form of Laser. This is what Cymer manufactures and developed in conjunction with Lawrence Livermore National Labs. But technology in isolation is useless - it needs to be capitalized in order to be built and utilized. This is why LLNL brought ASML in as a private sector partner for Cymer.
> That makes the China vs Taiwan debacle even less important to the US
The "Taiwan Chips" aspect was always nonsense that was literally lobbied by Intel in 2019 to force TSMC to burn $20B building a factory in Arizona while giving Intel some breathing room to build a Foundary IDM.
Also, the intermediate parts for fabrication are largely manufactured in Japan and South Korea. There are a number of vendors in Taiwan now, but there is an ecosystem in the other two as well.
> less important to the US, since there's nothing to worry about.
Wrong. Taiwan is part of the first island chain. Without Taiwan, much of the US's Pacific seaboard becomes very difficult to defend, and leaves us open to a Pearl Harbor 2.0.
Even in 20th century, the only time the US ever lost land was to the Japanese when they invaded American Phillipines, portions of Alaska, and planned to invade Hawaii.
This is why you see horrible unseriousness about Ukraine by US admins. Ukraine is bad, but Taiwan is existential for the US, and why just about every US admin is much more worried about China compared to Russia.
No European nation other than France has the capacity to help us in the Pacific, so they may as well help load balance/burden share in Europe and MENA. It will make both North America and our European allies stronger.
In the eventuality that the US is seen as a foreign hostile country by EU members, which seems increasingly likely, those IPs do not need to be respected anymore.
Unless your argument is that "EU chimps cannot figure out how to do lithography thenselves". Then I'll have a very hard time to take your argument seriously.
First, I absolutely think Trump and Vance's conduct was horrid.
That said, even after the past 2 weeks, European states are hesitant to provide boots on the ground to Ukraine [0][1].
Online (especially on English speaking Reddit and HN) there is strong support to help Ukraine, yet it seems individual members of European states do not wish to truly commit to Ukraine, due to political implications. If even Poland [1] does not want to provide boots on the ground, and Germany and France still want US boots on the ground in order for them to commit to Ukraine [1], then there is a fundamental problem with Ukraine's current posture.
Even if Harris was president today, a similar outcome would have happened.
As I have stated multiple times before, I don't think Europeans on Reddit/HN realize that China is the bigger issue for the US, not Russia (European leadership does recognize this and is trying to accommodate the US as such - look at the UK and Türkiye's commitment to Ukraine over the past decade).
We have no actual defense in depth in the Pacific and have seen this first hand in WW2 with the Japanese invasion of American Philippines and Alaska and much more recently during both the SCS Standoff and Senkaku Diaoyu, but our allies in Europe can provide that for us in Russia. Nor do we expect our European allies except France (because of French Polynesia and Mayotte) to help us in a Indo-Pacific War
If WW3 does happen, there will be no American soldiers in Kirkenes, we will be in the Kinmen Islands
> Unless your argument is that "EU chimps cannot figure out how to do lithography thenselves". Then I'll have a very hard time to take your argument seriously.
Europe (and China, South Korea, Japan, India, etc) absolutely can. Question is over what time period (2 years, 5 years, 10 years?).
There needs to be a united "Europe" but there really isn't. When push comes to shove, European states devolve into bickering with each other because diametrically opposed interests.
If an Obama 2 era Dem staffer like me is ticked off, then you should realize your leadership has burned any goodwill that remains in the American NatSec space. The Koreans and Taiwanese tick us off, but at least we know they will fight if push comes to shove. The only European states with a similar resolve are France, UK, Turkiye, Poland, Netherlands, and maybe Romania. We warned your leadership that an American president like Trump would eventually come, yet your leaders did not listen.
At least your leadership recognizes this now, but has to work overtime because the Trump admin are incompetent at messaging.
It will be better for both the US and our European allies if Germany, Netherlands, etc adopt a France+UK style policy of strategic autonomy. Maybe include Turkiye while you're at it otherwise they will make Balkan and Caucasus Integration impossible
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Also, none of the above sidesteps the fact that 20% of ASML's personnel is in the US, and ASML's light source technology (the primary part used for EUV and DUV) is manufactured and innovated by an JV in San Diego between ASML and Livermore Labs.
[0] - https://www.thetimes.com/world/russia-ukraine-war/article/ai...
[1] - https://www.politico.eu/article/europes-leader-donald-trump-...
I don't understand why Trump is so anxious to be buddies with Putin when Russia is aligned with China. It's feeling like an oligarch's world where under the table deals are what matters and the nationalist rhetoric is just a smoke screen.
The EUV portion of the machines are made in the US - it's manufactured by ASML's subsidiary Cymer, down in SoCal.
It's not clear where the current US government will draw the line, and they would be crazy to draw the line at IP licensing... but well, I have some bad news.
I have absolutely no idea what is the Trump's (or Musk's, or whoever is calling the shots) endgame is. There is the chance that military action is inevitable. It's really bad either way.
They are part of ASML, but firewalled from the rest due to DoE and Federal Contractor requirements.
Query: who are ASML's subsidiaries?
//
1. Cymer (Acquired in 2013)
A U.S.-based company specializing in EUV and DUV light sources. Cymer provides the laser-produced plasma (LPP) EUV sources used in ASML's EUV scanners.
A German company specializing in high-precision optical components. Helps ASML develop optical lenses and mirrors for lithography machines.
A Taiwanese company focusing on e-beam inspection and metrology. Enables ASML to enhance defect detection in semiconductor manufacturing.
ASML has a strategic partnership with Carl Zeiss SMT, which supplies high-precision optics and mirrors used in EUV systems. While ASML doesn’t own Carl Zeiss, it invested heavily in their R&D for EUV optics.
FAFO.
Chinese manufacturing is efficient because of the tight supply chain integration and centralization that has emerged in the big cities of the Pearl River Delta Area.
The decades old dream to manufacture cutting edge chips in Europe has also repeatedly failed because it keeps being turned into job development programs in Eastern Germany.
China essentially says “here’s where all the talent is and where the talent is willing to move to…let’s focus there”.
Because of policy reasons Texas, for example, has been able to kind of grow, but it would be much better if the likes of California and New York fixed their bad policies so they could grow instead, as the potential is much greater.
With Ohio specifically it’s being built just outside of a city too. Yes, we have those here. It’s actually not just one big state of a bunch of rural hicks demanding handouts from the government.
Is Intel really that far out of it? I guess that’s what a decade plus of near monopoly dominance does to you.
It's probably because TSMC is in China. They're across the straits from the world center of the electronics industry, instead of across the Pacific, and they can hire the sort of people who pay private tutors for their kids instead of the sort of people who refuse to wear facemasks in a pandemic of a deadly respiratory infection. TSMC executives in Arizona have been consistently amazed at the laziness and ignorance of the workforce there.
60 years ago the US had the human capital and industrial base to found Intel. Now it probably doesn't have the human capital and industrial base to sustain it.
I was alluding to this likely being a management problem at Intel.
TSMC in Arizona is implementing fabrication processes brought to production readiness by the hard work and expertise of people at TSMC in China, which can draw on the whole Chinese electronics ecosystem that doesn't exist in the US anymore.
Because China is a country and not a region? Would you put Canada as America simply because they are all in North America?
Moreover, you are responding to a substantive discussion about how economic and cultural factors affect innovation with trivial flamebait about how words should be defined, apparently in order to promote some kind of political agenda.
______
* Whose constitution is written in Chinese and calls it by a name translated as "The Republic of China".
Anyway you’re welcome to think whatever you like, but the actual political reality is that the PRC which is commonly referred to as China, and the ROC, which is commonly referred to as Taiwan, are two separate and independent countries. One is in now way part of the other (despite China wishing it were so and including Taiwan as part of China in their domestic maps).
Vast majority of people in Taiwan don't call Taiwan "China". Yes the official name is "The Republic of China" but that is rarely even used other than extreme formal settings. And even when they do use the official name, the term "China" is very rarely used apart from Pro-Bejing Camp but "Republic of China".
In "normal" day to day usage it is simply known as Taiwan. Even Chinese people calls it Taiwan.
Muddling the word when even natives don't use it is simply causing unnecessary confusion for the sake of either political correctness or blatant trolling.
I lived in China for 6 years, and also worked in Taiwan. I can tell you that is _not_ how most people in Taiwan and China use it. People in Taiwan most certainly do _not_ refer to Taiwan as 中国 (ZhongGuo), and people in China refer to Taiwan as 台湾 (TaiWan). The CCP does consider Taiwan a "renegade province" of China under its "One China" policy, but wishing something is true doesn't actually make it so, and in practical terms Taiwan is no more under Beijing's control than Ireland under the control of Westminster.
> It's probably because TSMC is in China.
The narrative on "people who refuse to wear facemasks.." needs to be diffused if not wearing them for other reasons, eg: lessening the impact of particulate air pollution while commuting on a moped or, manufacturing not adequately maintaining their HEPA air filters during the "burn-in" test flow of server racks with fans pegged at 100%, 24/7.
Speaking of diffusion, what's with some of boxed retail processors with laser engravings on the heat spreader as being "Diffused in China"? Oh right -- TSMC and other foundries are not responsible for the entire chip manufacturing cycle.
I am sure we will see more of this, I thought I saw the company in Taiwan (forgot the name) is scaling down or maybe cancelling their fab in AZ. Probably for the same "real" reason as Intel.
In particular Arsenal One, also in Ohio, is trying hard to hit that date for mass production of slaughterbots: https://law-in-action.com/2024/08/30/who-is-ready-for-war-wi... excerpted from WSJ article https://www.msn.com/en-us/money/companies/tech-bros-are-bett...
I'm don't think you should subsidize reinvesting in huge companies anyway. What do you expect to gain from them becoming larger?
It's much better (for society) to let them send the money back to shareholders so they can invest on something else.
Paying out dividends and doing share buybacks just strips the company for cash until there's nothing of value left. It's why entshittification is a thing.
That is, unless they use the extra capital to buy legally-enforced monopolies, or bribe regulators out of their way.
And no, enshitification is a thing because people want those companies to grow and grow, and keep growing. Some times even after they have the majority of humanity as customers.
No industry will self-regulate, as you write the lure of short term bonuses for execs is too high and punishment for failures are non existent. I expect current US admin will make this even worse, greed and short term profit seems to be the only focus.
I'm aware that TARP funds were repaid. Still, a bunch of that money went straight into bonuses [1]. Honestly, I'd rather the company be seized, restructured and sold.
You know who ends up making sacrifices to keep a company afloat? The labor force. After 2008, auto workers took voluntary pay cuts, gave up benefits and otherwise did what they could to keep the company afloat, benefits it took them ~15 years to fight to get back. In a just world, executive compensation would go down to $1 until such a time that labor sacrifices are repaid.
[1]: https://www.theguardian.com/business/2009/jul/30/bank-bonuse...
Seems more like a question of degree. Dividends are also taxed as income so ~36% is already paid in tax depoending on the income of the shareholder. Increasing the corporate tax rate to 40% brings the effective tax rate to ~52%.
In my experience there's a more fundamental problem with large companies. In a small company, the best way to succeed as an individual (whatever position you have) is for the company as a whole to succeed. At a very large company, the best way to succeed is to be promoted up the ladder, whatever the cost. This effect is the worst at the levels just below the top: you have everything to lose and nothing to gain by the company being successful. It's far more effective to sabotage your peers and elevate yourself rather than work hard and increase the value of the company by a couple of percentage points.
The thing is, the people that have been there since the beginning still have the mindset of helping the company as a whole succeed, but after enough time and enough people have been rotated out, you're left with people at the top who only care about the politics. To them the company is simply a fixture - it existed before them and will continue to exist regardless of what they do.
In Australia, dividends come with what are called "franking credits". Imagine a company has a $1 billion profit and wants to pay that out as a dividend. The corporate tax rate is 30%. $700M is paid to shareholders. It comes wiht $300m (30%) in franking credits.
Let's say you own 1% of this company. When you do your taxes, you've made $10M in gross income (1% of $1B), been paid $7M and have $3M in tax credits. If your tax rate is 40% then you owe $4M on that $10M but you have already effectively paid $3M on that already.
The point is, the net tax rate on your $10M gross payout is still whatever your marginal tax rate is. There is no double taxaation.
That being said, dividends have largely fallen out of favor in favor of share buybacks. Some of those reasons are:
1. It's discretionary. Not every shareholders wants the income. Selling on the open market lets you choose if you want money or not;
2. Share buybacks are capital gains and generally enjoy lower tax rates than income;
3. Reducing the pool of available shares puts upward pressure on the share price; and
4. Double taxation of dividends.
There are some who demonize share buybacks specifically. I'm not one of them. It's simply a vehicle for returning money to shareholders, functionally very similar to dividends. My problem is doing either to the point of destroying the business.
A $28B liability would destroy the ability for any buyer to acquire the Foundry IDM portion of the breakup.
[0] - https://www.wsj.com/tech/broadcom-tsmc-eye-possible-intel-de...
https://www.techspot.com/news/106925-chips-act-likely-fizzle...
Congressional appropriations don't matter when the president can fire staff and stop payments.
The Intel fabs in Ohio were at the early stages, and would be a significant capex hit that could scuttle any M&A opportunities in the pipeline.
[0] - https://www.wsj.com/tech/broadcom-tsmc-eye-possible-intel-de...
It is not "partisan" politics, it is money politics. No money, no fab. Intel cannot commit to anything with a fluctuating future that changes each minute.
Exclusive: Trump prepares to change US CHIPS Act conditions, sources say https://www.reuters.com/technology/trump-prepares-change-us-...
It would make it completely untenable for any buyer to acquire the Foundry BU.
> Those encompass additional clauses, including requirements added into contracts by the administration of President Joe Biden, including that recipients must use unionized labor to build factories and help provide affordable childcare for factory workers.
Still sounds very megacorp friendly
The current administration has gutted the CHIPS act staff and is unpredictably changing the terms of the deals.
It’s not “partisan politics” to point out the simple facts about what the current administration is doing.
We can look at VMWare as a direct example.
It’s like when you see a company sold to Oracle or IBM you know it’s not going to be better than the status quo.
Pretty sure my cellular modem is made by Qualcomm.
> We can look at VMWare as a direct example
What do you mean by that?
VMWare has legitimately been ill managed for years now, and absolutely needed the chainsaw treatment. They had too many SKUs and their AEs gave ridiculously discounted quotes to make quota.
There's a reason Apple uses Broadcom for cellular modems.
https://arstechnica.com/information-technology/2024/03/broad...
Apple uses Qualcomm modems, not broadcom, and now makes its own modems starting with the iPhone 16e. Broadcom is mostly used for Wi-Fi and Bluetooth.
https://9to5mac.com/2025/02/19/apple-reveals-c1-its-first-in...
Not to mention the fact that the rumours themselves caused a rally in INTC price that makes acquisition far less attractive.
Probably due to US coercion: https://techsoda.substack.com/p/tsmc-faces-tough-choices-ami...
The US wants Taiwan to transfer even more technology to the US (thus actively undermining Taiwan's Silicon Shield defence strategy) and also revitalise Intel's operations under pain of 100% tariffs, which Trump has repeatedly threatened.