[HN Gopher] Intel to Receive $8.5B in Grants to Build Chip Plants
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Intel to Receive $8.5B in Grants to Build Chip Plants
Author : ece20
Score : 185 points
Date : 2024-03-20 12:51 UTC (10 hours ago)
(HTM) web link (www.nytimes.com)
(TXT) w3m dump (www.nytimes.com)
| hiddencost wrote:
| https://archive.is/XkIJs
| OJFord wrote:
| _Grants_?! Isn 't that massively anti-competitive/entrenching a
| monopoly?
|
| I would've expected it to be at least disguised as a tax break or
| something. ('No tax on US-manufactured chips' or whatever.)
| rapsey wrote:
| Intel has a monopoly?
| hx8 wrote:
| Due to the licensing agreements Intel and AMD have a duopoly
| on all modern x86 chips.
| rapsey wrote:
| Who cares? You can buy performant arm64 laptops and
| servers. HPC is GPUs.
| sofixa wrote:
| > You can buy performant arm64 laptops and servers
|
| From? Apple doesn't count due to the extremely narrow
| usability of their software and the complexity of using
| other software on their hardware.
| rapsey wrote:
| Moving the goal posts
| junaru wrote:
| Getting caught spewing bullshit.
| jsight wrote:
| It sounds like the Surface Pro 10 will be a good example.
| Early reviews of the Snapdragon X Elite sound promising.
| It wouldn't take much for others to start making
| competitive offerings as well.
| hx8 wrote:
| A strong percentage of Intel's current sales are vendor lockin
| from the historical "Wintel" age (windows + intel). This is a
| moat Apple finally crossed after great effort, and Windows has
| made a few attempts to cross.
|
| If chips were sold purely on hardware specs and not software
| lockin then Intel would have much fewer sales. The US giving
| grants, tax credits, and cheap loans to Intel only serves to
| extend the lifespan of a company whose compeitive edge is
| failing.
| nahnahno wrote:
| Given that their parts have been, up until the past 5 years,
| clearly better than AMDs (and any other chip manufacturer),
| and in the last 5 merely competitive, that's quite the
| statement. Nevermind that with Gaudi, they also have the only
| viable AI accelerator besides Nvidia and AMD.
| EraYaN wrote:
| These grants are for a completely different side of the
| business. The fab side, and that side is strategically
| significant for the US government so it makes sense they put
| some money in. The rest of the world is doing the exact same
| as well.
| Shrezzing wrote:
| They're getting $5.5bn in tax breaks, and loans for $11bn on
| generous terms too. Their total support package from the CHIPS
| money is $25bn. Intel are putting in $75bn, taking the total
| project to $100bn.
| bluSCALE4 wrote:
| Absolutely. This is why Intel is basically nationalized and no
| different than an American Huawei.
| chomp wrote:
| So when can we expect 8.5 billion in stock buybacks?
| supertrope wrote:
| https://web.archive.org/web/20220812015804/https://semianaly...
| barryrandall wrote:
| November 6, 2024.
| a_wild_dandan wrote:
| Help me understand.
| sambull wrote:
| After the next general election. Optics
| testhest wrote:
| I thought fabs require massive amounts of water to function,
| isn't AZ a pretty dry state?
| alephnerd wrote:
| Water is reused.
|
| Wafers have purity requirements so you'd be stupid to not
| recycle and re-purify the water used.
| lizknope wrote:
| These are from Intel's site so of course it is going to be pro
| Intel but they reuse the water.
|
| https://www.intel.com/content/www/us/en/newsroom/article/int...
|
| https://www.intel.com/content/www/us/en/environment/water-re...
| ejb999 wrote:
| I just don't get it - the country has over $34 Trillion in debt
| already and we are handing out money to mega-rich corporations
| who don't need the money (among other things we waste money on).
|
| This is not going to end well - our kids and grand kids will be
| paying for it.
| transcriptase wrote:
| They would be paying far more if chips suddenly stopped coming
| out of Taiwan in the future and the U.S. had no onshore
| capacity to make their own.
|
| It's more of an insurance policy than a subsidy. Intel needs a
| reason to build in the U.S., and grants tip the ROI scale on
| their side to make it happen.
| HEmanZ wrote:
| IMO this is a big enough national security threat that what
| intel is doing is similar to if Lockheed said "we're going to
| start selling to Russia instead of the US unless the US gives
| us nice grants".
|
| It shouldn't even be an option for Intel to continue
| manufacturing in other countries. It should be "move
| manufacturing back to the US or the Fed will take ownership
| of the whole company and do it for you."
|
| (And maybe it's sort of an unspoken assumption that if they
| don't take this carrot, then the US really would use the
| stick to force their manufacturing back into the US).
| aylmao wrote:
| An expropriation of this kind and magnitude by the US
| government would be historic. Has it happened before? I'm
| curious.
|
| I know there's talk about TikTok either selling to a USA
| owner or leaving, which seems pretty monumental too. Not
| quite an expropriation since the state wouldn't be taking
| control of it, but somewhat similar.
| aylmao wrote:
| > Intel needs a reason to build in the U.S.
|
| I mean, if Intel is only motivated to build in the USA when
| it gets a fat check rather than out of conviction, I think
| that's a problem too, no? Does this mean that whenever
| maximizing (short-term) shareholder value is at odds with
| national sovereignty the USA will have to hand them out a
| check?
|
| I don't know that this is what's going on here, perhaps Intel
| really is committed to the USA beyond the individual gain of
| its executives and shareholders. It's worth noting though,
| there's some prominent examples in US history where this
| hasn't been the case. Banks for example got really rich at
| the USA's expense in the years leading to 2008.
| Workaccount2 wrote:
| It would extremely difficult to make an educated case that
| having domestic cutting edge semiconductor manufacturing
| ability is a "waste of money".
| ejb999 wrote:
| and yet INTC has been in business for decades, profitable the
| whole time, producing chips without this grotesque handout of
| taxpayer monies.
|
| They have already used their excess profits - many $10's of
| billions of dollars in recent years, for stock buybacks, but
| apparently they really, really need this money from taxpayers
| to stay a going concern.
| kortilla wrote:
| This is a thing intel didn't care about doing. The
| government wants the fab strategically so is incentivizing
| them to do it. It has nothing to do with intel's
| profitability otherwise.
|
| It's no different from grants to build renewables, farms,
| housing, munitions, whatever the government wants done in
| the country.
| s1artibartfast wrote:
| I agree with everything you said.
|
| However, it is a very indirect way of getting what the
| government wants, prone to manipulation.
|
| The more direct option is to contract and purchase the
| finished product.
|
| The general problem is twofold. First, it can be more
| financially efficient to spend on incentives then finish
| product. Second, much of the public do not trust their
| representatives to perform this analysis and negotiate in
| good faith.
|
| Is a 25 billion Upstream incentive cheap compared to the
| Chip Price premium the government would have to pay to
| have the same incentive?
|
| The other question is who benefits from domestic chips
| and if the government is the right person to pay.
| rockostrich wrote:
| If you're this worried about tens of billions of dollars going
| to Intel, I have some news for you about the military
| industrial complex.
| ejb999 wrote:
| I guess in your mind it is not possible for both things to be
| bad? As long as we have the bogeyman of the DOD budget, any
| money spent that is even a penny less than the DOD budget is
| OK, is that how you see things?
| humansareok1 wrote:
| People have been repeating this tired trope for decades and yet
| we persist. The US doesn't even have the worst debt load of
| developed countries and ones that are significantly worse are
| still operating fine!
| ejb999 wrote:
| you mean other than the rampant inflation we are seeing now -
| and will almost certainly get worse - everything is fine?
| light_hue_1 wrote:
| In the past 15 years Intel has spent almost $100 billion on stock
| buybacks. They don't need the money.
|
| This is a pure transfer of wealth from taxpayers to the rich. And
| they're getting more like $20 billion not once you include loans,
| etc.
|
| The wealthy make massive amounts of money, take it out for
| themselves, and then complain that they don't have capital.
| That's pure junk. And then we wonder why Biden's approval ratings
| are terrible and why we might end up with Trump again.
|
| We need to make stock buybacks illegal again. They provide no
| value to everyone but the ultra wealthy.
|
| Edit: Wow, the downvotes are amazing. A company gives away $100
| billion then comes hat and in had to taxpayers asking for another
| $20 billion and we just hand it out. And I'm getting downvoted?
| ejb999 wrote:
| I don't care if companies buy back stock - but if they can
| afford to buy back stock, they don't need or deserve my tax
| money to operate.
| consumer451 wrote:
| > In the past 15 years Intel has spent almost $100 billion on
| stock buybacks.
|
| This is the main reason that I dislike stock buy backs, they
| reduce R&D investment.
|
| If you want to give your investors a prize, pay a dividend.
| Otherwise, invest in your company!
| kaibee wrote:
| Stock-buy backs are basically just dividends with a better
| tax treatment.
| consumer451 wrote:
| There is also the benefit to any exec whose compensation is
| related to a rising stock price, right?
| s1artibartfast wrote:
| That depends on the comp structure.
|
| Usually comp structures look at multiple metrics that
| owners want to see. Owners prefer stock price to
| dividends, so they reward it more.
| kortilla wrote:
| Buybacks and dividends are the same thing. Money leaves the
| company to go to shareholders. Neither is better/worse for
| R&D.
| BeetleB wrote:
| The new CEO banned buybacks.
|
| I never understood the anti-dividend and anti-buyback mindset.
|
| I've given quite a bit of money to partially own a business
| (and I don't mean publicly traded shares, but literally buy a
| portion of a business). I have an agreement with the operator
| that I'll get N% of proceeds (as long as the business can
| handle that percentage). Are you saying that I, as an owner, am
| not entitled to it? That's rather ridiculous.
|
| Imagine a friend coming to you who says "Hey, I need $50K
| capital to start a business. Let's be partners - you provide
| the capital, and I'll do the operations. Oh, and I'll give you
| whatever money I want, whenever I want. Perhaps none at all.
| It'll be entirely up to me."
|
| Would you take that deal? Because that's how shares work.
|
| Shareholders, on paper, are partial owners. Yet they do not
| even have an agreement like I do. The company can decide not to
| share any money _at all_ with shareholders. IMO, _all_
| companies that sell shares to the public should be required by
| law to give a representative amount of money to these owners.
|
| BTW, my N above is significantly higher than the percentage
| almost any company pays back in dividends. Intel used to give
| about 4.5% return via dividends, and that was triple the
| industry average. They've since reduced it to 1.5% to be in
| line with the industry.
| light_hue_1 wrote:
| > I never understood the anti-dividend and anti-buyback
| mindset.
|
| I'll try to explain it.
|
| Companies use stock buybacks to give away massive amounts of
| capital. Capital that they clearly need for their long term
| health. Then, because they're important to the economy when
| they have a downturn they come to taxpayers and ask for
| massive amounts of cash.
|
| This is for example what happened to the airlines which then
| got over $50 billion or so in bailouts. They spent about 80%
| of that in the previous few years on stock buybacks. They
| would have been healthy enough to survive without the
| bailouts. So what happens is companies give their money away
| to the rich, constantly fail because of that, and take money
| away from the poor to cover up for their failure.
|
| Stock buybacks create a conflict of interest where companies
| can directly manipulate their stock prices. So instead of
| building the best enterprise, they can pump money into
| bringing their stock up artificially.
|
| The fact that this overt manipulation of your own stock price
| is bad was well understood after the Great Depression and
| that's why it was basically banned by the act that set up the
| SEC in 1934. The SEC then passed Rule 10b-18 granting
| companies an exception from the market manipulation rules
| under Reagan.
|
| That's a pretty clear case of a regulatory agency going
| against the will of Congress to create basically its own law.
| It will be interesting to see what happens to Rule 10b-18 if
| the Supreme Court reverses Chevron in a few months.
|
| > The new CEO banned buybacks.
|
| Of course. After 20 years of stock buybacks where they gave
| away the vast majority of their cash the new CEO wants money
| from the CHIPS act which says they cannot have buybacks for 5
| years.
|
| It will also be interesting to see if the CHIPS act has any
| teeth. BAE took the money but is doing buybacks anyway.
|
| This is too long of a topic for an HN post. Here's a nice and
| balanced writeup
| https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3639389
|
| My personal position is far more extreme, there should be a
| clear ban and the SEC should not be allowed to overturn the
| law as it was written with a regulation. Certainly if the EPA
| cannot regulate carbon through the same logic, the SEC should
| not be allowed to do so.
|
| If you want a gentler writeup, this HBR article has it.
| https://hbr.org/2014/09/profits-without-prosperity
| BeetleB wrote:
| You start a business and have partners who have bankrolled
| you. They own a percentage of the company. At some point,
| you want to buy out their share. But the government just
| banned it. You can only dilute your share, never increase
| your ownership stake.
|
| Does that make sense? Because that's what banning stock
| buybacks will achieve.
|
| > Companies use stock buybacks to give away massive amounts
| of capital.
|
| It's one use of stock buybacks, amongst many. Companies
| also do buybacks to get a greater ownership stake. They
| also do it if they think their stock is undervalued.
|
| Banning buybacks is throwing all good options out to
| prevent a few bad options. It's a kneejerk reaction.
|
| My company has done buybacks multiple times. It barely made
| any impact on the stock price. The much believed notion
| that it manipulates stock prices ... needs hard data. Look
| at all the companies who've done it in the last 30+ years -
| how many of them saw a significant gain in stock price in
| the short term?
|
| I can agree that these transactions need to be _regulated_.
| But banned? Nope. For me, though, reform is useless unless
| they solve the problem I mentioned above: That it is
| currently legal for me to get an ownership stake in a
| company and _not be entitled to anything in return._
| Shareholders should have a contractual right to returns
| that is independent of the stock price.
| Aloisius wrote:
| > Companies also do buybacks to get a greater ownership
| stake.
|
| Greater ownership stake in what? Companies, at least in
| the US, can't own themselves. Stock buybacks merely
| reduce outstanding shares effectively increasing the
| percentage of the company owned remaining shareholders.
| BeetleB wrote:
| > Companies, at least in the US, can't own themselves.
|
| These are technicalities: The point was to prevent things
| like hostile takeovers:
|
| https://www.sciencedirect.com/topics/economics-
| econometrics-...
| shortsunblack wrote:
| Buybacks and dividends are not the same thing. Buybacks get
| preferential tax treatment and are in their entirety
| manipulative (that's why they were banned under SEC rules
| until Reagan deregulated capital markets) to the market it
| serves. Dividends are predictable, have a consistent rate
| across the years and are pretty much impossible to game the
| market with, as they return value to shareholders over a
| longer time period, avoiding temporary volatility.
| BeetleB wrote:
| > Buybacks and dividends are not the same thing. Buybacks
| get preferential tax treatment and are in their entirety
| manipulative
|
| OK - answer me this. How can a publicly traded company buy
| more of its own shares (i.e. to get a higher ownership
| stake)? Or even buy them because they believe they are
| undervalued?
|
| > Dividends are predictable, have a consistent rate across
| the years
|
| Except this is not true. A company decides each quarter how
| much dividend to pay out. There's usually nothing
| preventing them from saying "Nah, sorry."
|
| We all know plenty of companies that simply don't pay
| dividends, no matter how profitable.
| dyingkneepad wrote:
| I think since Pat Gelsinger took over as the CEO, no stock
| buybacks were made.
| teleforce wrote:
| Previous post on the news and apparently the CHIPS funds are not
| limited to Intel [1].
|
| [1] US to inject billions of fab CHIPS cash subsidies to Intel,
| Samsung and TSMC:
|
| https://news.ycombinator.com/item?id=39729979
| redleader55 wrote:
| It's unlikely at this stage it's possible to bootstrap a company
| that makes CPUs, GPUs, etc, so it seems to me the US government
| wants to hedge their bets and keep Intel alive for now. $25B in
| total is a small price to pay for that.
|
| That being said, I would've preferred it's not Intel that gets
| the life-line.
| Workaccount2 wrote:
| Intel is the only domestic candidate. Global foundries stepped
| back from high end semi production about a decade ago, leaving
| only Intel.
|
| And besides Intel, there are only two other companies on Earth;
| TSMC and Samsung.
| cma wrote:
| And all rely on ASML, though some of their EUV stuff was in
| part tech transfer from a US government collab that included
| Intel (EUV LLC), and that's why we have still have some
| security veto over selling EUV machines to China.
| scarface_74 wrote:
| The thing is that it's not leading edge chips that are the
| most important for most consumer goods like cars and random
| other products. It's the trailing edge chips that companies
| like TSMC is manufacturing on fully depreciated equipment.
|
| While it makes no sense financially for a new company to buy
| equipment to build trailing edge chips, it's perfectly
| logical for TSMC just to keep old fans running
| nickpsecurity wrote:
| They could force them to license the production to one to three
| other companies who kick back a percentage of the profits to
| Intel. That makes two to four suppliers who receive the $25
| billion. Then, we have competing firms.
|
| If they think that's unfair, they can quit asking for our tax
| dollars to expand their for-profit businesses.
| jdblair wrote:
| Nobody needs to force Intel to do this, Intel is already
| doing it. They manufacture other company's designs for hire.
| Opening up their foundries for use by other companies is part
| of Intel's current business strategy.
|
| There are only three companies in the world with cutting edge
| semiconductor manufacturing capability: Samsung, TSMC and
| Intel.
| nickpsecurity wrote:
| You just argued with yourself. You said there's only three
| suppliers, two of which the U.S. wants to avoid. Then, that
| Intel is controlling and benefiting from how those projects
| are manufactured. That means the billions would shore up a
| domestic monopoly that's in a tiny oligopoly.
|
| My proposal would use our tax dollars to create plants that
| use Intel technology, but aren't under their control, with
| different business strategies, operational priorities, and
| money going to other directors. The supplier diversity
| would increase competition domestically while strengthening
| us. While not done the same way, my precedents for
| increasing suppliers are Intel having to license to AMD and
| IBM licensing to Freescale.
| jdblair wrote:
| Ok, I misunderstood what you meant. I thought you meant
| license access to the foundry, like TSMC does.
|
| What you're proposing is that the US stand up a
| semiconductor fab that can compete with Intel. That's
| going to be hard!
|
| I think "use Intel technology" is a lot less practical
| than it might seem. After all, Intel uses ASML
| technology, and anyone with enough money can buy the
| machinery (as long as they're not based in China). Intel
| manufacturing tech is the sum total of all the skill and
| expertise of Intel's employees.
| bluSCALE4 wrote:
| Glad to see so many people pissed off. Nothing will change but
| it's good to see so much information and callouts of corporate
| welfare.
| m3kw9 wrote:
| Why pissed off? Intel is the one with experience and the US is
| desperate de-risking TSMC and control more of the chip as chips
| is one of the most important resources now and in future. Would
| they give it to Y-combinator startups? If Yes they would be a
| fraction of it, Intel earned this by being American and being
| the cornerstone of American Chip business for past few decades
| throwaway4good wrote:
| Yes. I too miss when wintel ruled the day ... the music was
| better too.
| jsight wrote:
| I don't think anybody thinks we are going back to that.
|
| But right now, CUDA rules the day in AI. It'd be nice to
| have a few strong competitors in that space.
| bluSCALE4 wrote:
| I'm opposed to it here as I am to it happening in China.
| Except that I felt Huawei phones were superior to everything
| else I had used from an OS perspective (They made lots of
| optimizations). I don't Intel as a company in good standing;
| they've committed personnel, product and corporate fouls. I'd
| rather see 20 million go to that kid that made his own CPU. I
| have faith he'd do more to better humanity than Intel.
| unyttigfjelltol wrote:
| The US is spinning $1T new public debt every 100 days and
| there's no credible path to return to a sustainable
| trajectory. Plus, the poster child for federal corporate
| welfare-- Boeing-- has not done so well with that largesse,
| Intel is a rather sad candidate to carry that torch
| forward.[1]
|
| [1] https://www.nytimes.com/2020/09/04/opinion/pefco-export-
| impo...
| nwiswell wrote:
| > The US is spinning $1T new public debt every 100 days and
| there's no credible path to return to a sustainable
| trajectory.
|
| How are you calculating this? The full-year deficit is
| running at less than $1T... You aren't counting it when
| Treasury rolls maturing bonds over into new debt, are you?
| That's normal and irrelevant.
|
| https://fiscaldata.treasury.gov/americas-finance-
| guide/natio...
|
| There's a few things worth mentioning, since after all that
| is still a big deficit.
|
| 1) Debt service costs are over $1T annually, as the end of
| many years of ZIRP finally starts to bite. There's no
| guarantee that we return to lower rates in the future, but
| it's likely, and that will reduce debt service burden over
| time.
|
| 2) Deficits are calculated inclusive of the costs of debt
| service, but do not include the impact of inflation on the
| public debt (which is substantial right now).
|
| 3) Deficits can absolutely be sustainable. The economy
| (i.e., GDP) grows over the long term, and the tax base
| grows with it. GDP is around $23.3T, and assuming long-run
| 3% growth, that would mean deficits of $700B are
| sustainable.
|
| Overall the fiscal picture is not _great,_ but anyone
| acting like there 's an acute crisis is probably doing it
| for political reasons.
| unyttigfjelltol wrote:
| Your link indicates a $1.7T deficit for FY23 which is not
| "less than $1T". That's roughly twice the figure you
| offer as " sustainable" ($700B).
|
| It's been widely reported [1] that the US debt reached
| $32T in June 2023, $33T in Sept 2023, $34T January 2024,
| achieving those milestones roughly every 100 days. The
| projections indicate an exponential increase, which
| doesn't help the case for sustainability.
|
| Sovereign debt and fiat ultimately are confidence games.
| Being unable to offer credible long-term math is a
| problem.
|
| [1] https://www.cnbc.com/2024/03/01/the-us-national-debt-
| is-risi...
| nwiswell wrote:
| You're right, I mistook the year-to-date figure for the
| full-year projection.
|
| That said,
|
| > It's been widely reported [1] that the US debt reached
| $32T in June 2023, $33T in Sept 2023, $34T January 2024,
| achieving those milestones roughly every 100 days. The
| projections indicate an exponential increase, which
| doesn't help the case for sustainability.
|
| These figures aren't interesting because they include
| debt that the government owes to itself
| (intragovernmental debt). The _debt held by the public_
| is presently around $27T.
|
| When actually considering long-run sustainability, you
| don't just consider the real GDP growth rate (as I did
| above). You really need to consider several factors:
|
| 1) Deficits
|
| 2) _Nominal_ GDP (i.e., disregarding inflation)
|
| 3) Nominal interest rates
|
| If you have a ton of inflation, you can effectively
| reduce the debt burden in terms of a % of GDP, since the
| GDP grows with inflation and the debt does not.
|
| This is the data series that should interest you:
|
| https://fred.stlouisfed.org/series/GFDEGDQ188S
|
| You'll note an explosive increase due to the extreme
| pandemic deficit spending (and during the financial
| crisis), but lately it's actually not an "exponential
| increase".
|
| The bottom line is it's not as though these are uncharted
| heights, or that we're presently on an uncontrolled
| exponential trajectory -- but, we have "run out of room",
| and if we have another crisis, we're going to be unable
| to engage in the kind of deficit spending that we have in
| the past without serious consequences.
| mortify wrote:
| This isn't a mandate to accomplish anything. It's a pile of
| cash. Intel will do what it chooses with it and justify it
| later.
| orangecat wrote:
| Yes this is corporate welfare, and sadly it's probably
| necessary. We need to be able and willing to blow the TSMC fabs
| if China invades Taiwan, and being able to credibly make that
| threat decreases the chance that they will invade.
| yard2010 wrote:
| China has their plan up to 2049. I doubt that something that
| other nations would do change it.
| thedangler wrote:
| I bet my life that Nancy Pelosi did some trades based on this
| grant. Bought way in the money calls or purchased shares... I
| guess we will find out in 45 days....
| kortilla wrote:
| This doesn't move the needle for intel, their stock price is
| barely up as of an hour after market open.
| ChrisArchitect wrote:
| [dupe]
|
| Some more discussion:
| https://news.ycombinator.com/item?id=39764821
| derelicta wrote:
| Can't you guys just nationalize Intel instead of giving your hard
| earned money to oligarchs?
| callalex wrote:
| That would make it much harder for all this money to be
| pilfered away through stock buybacks, which is the real goal
| here.
| rgrieselhuber wrote:
| I had heard that this had been killed. Is it back on?
| macksd wrote:
| This is an official announcement from the Department of
| Commerce that was made this morning.
| mikeyouse wrote:
| You're commenting about a press release from the Agency which
| grants the investments that was published today - so I think
| it's safe to assume, "Yes, it's back on"
| dclowd9901 wrote:
| I'm sure Intel will be very happy to bolster their cash savings
| with this investment. Or have we already forgotten about that
| broadband investment from way back?
| nahnahno wrote:
| The money afaik has to be used for actual manufacturing
| activities.
| redleggedfrog wrote:
| Just wait for the "Coke, Steak, and Strippers" addendum. The
| C-levels need that for when they go party with Boeing.
|
| Intel made ~55 billion last year. Maybe they don't really
| need corporate welfare.
| IncreasePosts wrote:
| It's more of an inducement to get the company to do what
| they might not do on their own. Intel doesn't need the
| CHIPS act, America does, and America is paying Intel to
| make it happen.
| jimbob45 wrote:
| This just sounds like how we got into our current mess
| with Boeing.
| x0x0 wrote:
| You're not wrong, but having an incredibly important
| dependence on an industry 100 miles off the coast of
| China (and the target of their increasingly erratic
| dictator) is worth paying billions to break.
| jimbob45 wrote:
| This short-termism seems like it's been America's chief
| problem through the centuries.
|
| "We need slavery - our economy will fall apart without
| it!"
|
| "We need Standard Oil and US Steel - splitting them apart
| would be a catastrophe!"
|
| "We need universal healthcare - a public option would
| place undue burden on insurance companies!"
|
| "We need Boeing - our foreign competitors would eat us up
| otherwise!"
|
| At some point, it's time to admit that the long-term pain
| is not worth the short-term benefits we get from naive
| economic policies.
| x0x0 wrote:
| 1 - not short-termism
|
| 2 - comparing a minor economic investment ($8B on a $23T
| gdp) to slavery, and the economic system built on
| slavery, is the stupidest thing I've read this week, so,
| well, congrats. I guess?
|
| 3 - not a naive economic policy; US government investment
| built silicon valley and that's going ok.
| macksd wrote:
| Well it's a bit like how I see universal healthcare.
| Would it be worth paying billions for? Oh absolutely. Do
| I believe the current US Gov could actually take all the
| money in the world and make it happen in a way I'd be
| happy with? LOL.
| 34679 wrote:
| I feel sorry for any startups looking to innovate in this space.
| It's hard enough competing against established players without
| them getting billions in free money.
|
| Intel has had the resources to build out fabs in the US for
| decades. Instead, they've chosen to build elsewhere, and now
| they're rewarded for it?
|
| They recently announced their $20b facility in Ohio is being "put
| on hold":
|
| https://www.tweaktown.com/news/96969/intel-delays-launch-of-...
|
| While at nearly the same time announcing a $25b facility in
| Israel:
|
| https://www.cnn.com/2023/12/26/tech/intel-israel-investment/...
| zitterbewegung wrote:
| Israel investment might have gone through due to their research
| department in the same country. Also, they got a grant from the
| govt in Israel.
| bhhaskin wrote:
| This isn't really a startup kinda business. It costs something
| like $10b to build a new fab.
| uptownfunk wrote:
| Isn't that what they said about rockets?
| bhhaskin wrote:
| The big difference there is SpaceX was able to
| incrementally build up. Falcon 1, Falcon 9, Falcon heavy,
| Starship. Each step allowed them to prove that it worked
| and gain investors and government contracts.
|
| Who in their right mind would invest $10b just to build the
| manufacturing capability without having a well established
| product? And if you have a well established product are you
| still a startup?
| qaq wrote:
| The equipment to manufacture rockets costs many orders of
| magnitude less than equipment for a FAB. It also does not
| get obsolete quickly.
| p1esk wrote:
| Musk should have spent 44B on a chip company.
| dotnet00 wrote:
| Rockets turned out to be expensive not because the
| technology demanded it, but because the companies were
| intentionally inefficient, e.g. it was actually fine to
| build a rocket in a tent with simple tools than to setup a
| massive clean room facility. This was fine because the
| government would hand them a blank check with a guaranteed
| profit percentage, and the handful of commercial customers
| would just swallow the cost.
|
| However, it isn't as clear if the same applies to
| semiconductors, since even a bit of dust is indeed a
| serious problem for producing a chip where the transistors
| are much smaller than most dust. Until very recently there
| were no blank checks, every improvement required mostly
| private investment, so it's less likely that the
| inefficiencies are intentional.
| mrd3v0 wrote:
| Any industry wouldn't be "really a startup kinda business" if
| only a few players are pumped more than everyone else
| combined by orders of magnitude. Having to scale to
| everyone's demand is a lot more costly than if the market was
| fragmented.
| 34679 wrote:
| That's where the innovation comes in.
| lupusreal wrote:
| > _Intel has had the resources to build out fabs in the US for
| decades. Instead, they 've chosen to build elsewhere_
|
| Almost all of Intel's fabs are in America.
| xil3 wrote:
| It's called payoffs. Not much we can do when the system is
| corrupt.
|
| I don't think we'll ever have a perfect system, unfortunately.
| Just makes it that much harder for startups.
| Goronmon wrote:
| _I feel sorry for any startups looking to innovate in this
| space. It 's hard enough competing against established players
| without them getting billions in free money._
|
| Which startups would be harmed by this type of investment? as a
| relatively casual observer, I didn't think there was much in
| way of startups that were looking to go head-to-head with a
| company like Intel or AMD in chip fabrication.
| no_wizard wrote:
| >They recently announced their $20b facility in Ohio is being
| "put on hold"
|
| I have a friend who lives in Ohio who was very excited about
| this, and I told him not to hold his breathe, its likely they
| will do everything they can to get subsidies to pay for it,
| rather than pay for the majority of it out of their own pocket
| and re-coup some via subsidy, therefore I suspect they will
| delay opening until they get more subsidies.
|
| It looks like I was right, unfortunately
| Salgat wrote:
| CHIPS isn't a handout; it's the only way to get them to build
| these expensive fabs domestically in a way that makes economic
| sense.
| aylmao wrote:
| As much as I agree, and I really do, this is also a company
| that mentions they have $7.24 billion available for sock
| buybacks [1].
|
| Sure, maybe they don't actually make any buybacks. This is
| what's left from $110.0 billion they approved for stock
| buybacks in the past, not a quantity that's been approved or
| seemingly needs to be used this year. They haven't bought
| back any stock since 2021 [1].
|
| One just wishes they'd invested in fab-building earlier.
| They've spent $152.05 billion in buybacks since 1990 [1], a
| fab apparently costs anywhere from $3-20 billion [2]. That's
| say ~10 potential fabs that instead became just checks for
| investors.
|
| [1]: https://www.intc.com/stock-info/dividends-and-buybacks
|
| [2]: https://en.wikipedia.org/wiki/Semiconductor_fabrication_
| plan...
| snapcaster wrote:
| I understand why Intel is getting these, but would be nice to see
| this money go to companies that are still innovating and are
| somewhere in the US coalition/orbit (TSMC, Samsung, etc.)
| gchokov wrote:
| Samsung? Really?
| Spivak wrote:
| I mean they're a company from a strongly allied nation who
| operates 13 fabs, why not?
| qwytw wrote:
| I guess the implication was that are still innovating
| unlike Intel
| resource_waste wrote:
| Samsung?
|
| I wonder if this is coming from a position of ignorance...
| Samsung is among the companies of the world that might be
| producing negative externalities that weigh more than their
| positive contributions
| tines wrote:
| I am totally ignorant, can you explain more about Samsung's
| negative externalities?
| minhazm wrote:
| Samsung is expected to get $6 billion.
|
| https://www.bloomberg.com/news/articles/2024-03-15/samsung-p...
| zerreh50 wrote:
| Both TSMC and Samsung are expanding in the USA and are expected
| to receive significant subsidies as well
| dotnet00 wrote:
| Intel is still innovating though? What's with everyone acting
| like they aren't innovating just because they aren't the
| leading performance x86 chip manufacturer? They're still
| shrinking node sizes, they've entered the GPU market, they're
| opening up their fabs to also make chips for other companies...
| edward28 wrote:
| Bit hard to claim they are shrinking nodes, when Intel 4
| claimed to be in production in 2022, but is still MIA except
| for low volume laptop products. And Intel 3 still has yet to
| appear.
| Aloisius wrote:
| How can you tell the laptop products are low volume?
|
| Meteor Lake appears to be in mass production and shipping
| in a plethora of laptops worldwide. There doesn't appear to
| have any availability problems.
| aylmao wrote:
| I think the general perception is that they're playing catch-
| up rather than meaningfully pushing the limits themselves.
| Yeah, they moved into the GPU market, but the cutting-edge in
| GPUs is by NVIDIA. As is the cutting-edge in AI chips. The
| cutting edge in fabrication is by TSMC. The cutting edge in
| mobile by Apple.
|
| Intel's bread and butter has always been x86, but not only is
| it an ISA that's proving non-ideal for a couple new
| applications (mobile is ARM, AI is in the GPU or NPUs, etc),
| AMD is really putting up a good fight in that market too, and
| the crown has been traded a copule times in the past few
| years.
| icyfox wrote:
| Right now one of the biggest blockers in on-shoring semiconductor
| fab at any kind of reasonable price-point and timescale is the
| lack of a skilled workforce. This legislation has dual
| objectives: train new people to get into sophisticated
| manufacturing AND to build out the actual infrastructure itself.
| That almost guarantees it won't be the most efficient way to
| actually get these chips on American soil. Whether we look back
| in 20 years and think "wow glad we took that hit upfront" is
| anyone's guess.
| resource_waste wrote:
| Or we are going to be training Junior engineers with outdated
| skill sets and build outdated infrastructure.
|
| Sometimes top down planning works, but I think I would
| personally need to trust the leadership and the incentives.
|
| Unfortunately incentives on these are typically to do bare-
| minimum so you can meet the criteria to get subsidies. Sure the
| chips will be usable, but you spent a multiplier of the cost it
| takes to get it, and the chips aren't cutting edge.
|
| I'd a bit more interested in some moonshot idealism than just
| some military buildup.
| lupusreal wrote:
| Top down planning is the only way projects requiring massive
| capital investment get done. There's no such thing as
| grassroots fabs.
| resource_waste wrote:
| The top down planning could be profit driven rather than
| defense driven.
| autoexecbat wrote:
| It really doesn't matter if it's a bit out-dated, you cant
| create senior engineers without them being junior. All
| seniors trained on currently 'old' methods by definition of
| time passing
| evilduck wrote:
| > the chips aren't cutting edge.
|
| We learned from the pandemic that a huge amount of the
| world's manufacturing economy depends on the availability of
| old and outdated chips. Being competitive in cutting edge
| CPUs and GPUs is only one facet of the problem. Incrementally
| addressing chip production needs seems better than doing
| nothing for longer in an attempt to solve everything at once,
| or a riskier leapfrog attempt that's likely to fail.
| Aloisius wrote:
| > and the chips aren't cutting edge.
|
| Intel is building two 20A in Arizona and one 18A fab in Ohio.
| If they aren't cutting edge, what is?
| ar_lan wrote:
| Why don't we just use AI to do this?
|
| /s should hopefully be obvious, but it does seem like anytime
| AI gets mentioned, it's clear cut to remove all US jobs away
| within the next 3-5 years, so it's ironic seeing a "lack of a
| skilled workforce" comment.
| devwastaken wrote:
| I don't think Intel is going to train a new skilled workforce.
| Their domestic hiring is minimal. Like the rest of tech these
| bills are leveraging work visas that ensure the Corp has feudal
| control over their workers.
|
| The right thing to do is to block these big waves and force
| global competition.
| lenerdenator wrote:
| Who would the competition be between?
| gamepsys wrote:
| Right now the high-end fabrication competition is TMSC,
| Samsung, and Intel. All three are supported by nations. The
| idea that we should just let the freemarket handle the
| issue doesn't feel grounded in practicality.
| RandomWorker wrote:
| The issue is there are few opportunities for junior people to
| start their careers. There is no shortage of talent but where
| do we start? I've been applying for jobs in the semi conductor
| industry but haven't had any luck because ever Is looking for
| senior staff but nothing for newcomers.
| spaniard89277 wrote:
| In most of the west (with few exceptions) is that you should
| waste at least a decade training yourself with little
| information of what's useful to learn.
|
| Then, you'll be talked down for being poor and lost. And
| whatever money you make will be put directly in the hands of
| your landlords, that profits off scarcity.
| 7speter wrote:
| Or be told youre looking for a dei handout
| nyokodo wrote:
| > Whether we look back in 20 years and think "wow glad we took
| that hit upfront" is anyone's guess
|
| Globalization is breaking down quickly. Chips are crucial to
| national security and our economy. The supply chain for
| advanced chips is heavily dependent on East Asia which is a
| geopolitical powder keg and a demographic time bomb. The only
| thing more expensive than whatever we end up with is chips
| unavailable at any price because East Asia devolves into a war
| stricken basket case. We needed to have been starting this
| panic training/building 10 years ago but better late than
| never!
| TremendousJudge wrote:
| >Globalization is breaking down quickly
|
| Is it? I don't know if there's a concrete way of measuring
| "amount of globalization", but I'd guess that right now we're
| probably the most globalized we've ever been. "More things
| that you use are made outside your own country" has only been
| growing, and with the advent of full remote companies that
| also includes much more software than before -- it used to be
| that only huge corporations would offshore software
| development, now everybody can do it.
| s1artibartfast wrote:
| Global trade as a percentage of global GDP peaked somewhere
| around 2011 and has been steadily declining.
|
| If you look at the US in particular the relative value of
| imports and exports is down about 30% from the peak 10
| years ago. That's a big change for such a short duration
| adventured wrote:
| And simultaneously the US has been ploughing massive
| amounts of capital into domestic manufacturing
| construction. Money that would have previously been
| invested into China or elsewhere, is now staying domestic
| (with a lot of capital also going to eg Mexico).
| s1artibartfast wrote:
| What do you mean when you say that the money would have
| previously been invested into China?
|
| Was the US federal government previously funding fab
| development in China?
|
| That is to say, it seams like this investment is to meet
| a very specific need, and wouldn't have happened
| otherwise. Similarly those paying aren't the same either.
| jiveturkey42 wrote:
| You could proxy a measurement of "amount of globalization"
| by disruptions in global shipping of food, energy,
| manufactured goods, etc. Covid caused disruptions, Houthi
| attacks in the Suez Canal disrupted shipping, Panama Canal
| is facing issues with water due to drought.. US continues
| to withdraw from Naval security commitments from the
| Bretton Woods era
|
| Physical goods are much more complicated to move around the
| globe than code
| adventured wrote:
| > US continues to withdraw from Naval security
| commitments from the Bretton Woods era
|
| Would you mind listing all the naval security commitments
| - from the Bretton Woods era - that the US has withdrawn
| from (eg over the past decade or so, anything relevant to
| "continues to")?
|
| I'm not aware of any meaningful reduction in US naval
| security commitments. If anything the US is as busy as
| ever with its global naval security efforts. It's hyper
| busy everywhere: from Latin America, to Australia, to
| Europe, to the Middle East, to Asia.
|
| The notion that the US has stepped back at all is
| entirely unsupported by the actual facts. It's just a
| weak myth being posted endlessly since Trump began
| spouting isolationism in 2015-2016. Meanwhile, in
| actuality, the US just spent another hundred billion
| dollars on a foreign war in two years.
| chiefalchemist wrote:
| I think you would measure it by trade deficits and trade
| surpluses. That is, now much "stuff" is moving around.
| bluGill wrote:
| Ask me in 20 years. There are a lot of worring signs right
| now that things will get bad, but nobody really knows.
|
| When the Soviet Union broke down 30 years ago the US
| decided the biggest worries were small countries (Iran in
| particular), and things like 9/11 proved they were right.
| However Russia is now attacking Ukraine and many think that
| countries like Poland or Latvia (both in NATO) are next.
| China is setting up so that they could take military action
| to take Taiwan, and other countries in the area. Nobody
| knows for sure if either of these predictions will come to
| pass, but there are signs that should worry you.
| zer00eyz wrote:
| >> Globalization is breaking down quickly.
|
| Food. Fuel.
|
| Renewables is shifting one of these, but the other will not
| go backwards, its that or billions will starve.
| xyst wrote:
| Billions are already starving. You just never hear about
| them. Millions are starving today on American streets. Yet
| we do nothing but sit on our hands, play hot potato between
| generations, point fingers, start culture wars, start class
| wars.
|
| It's all quite boring. Nobody is interested in solving the
| issue. Only a rat race to see who can con the next
| person(s).
|
| Some days this monologue from Westworld rings true:
|
| " I think humanity is a thin layer of bacteria on a ball of
| mud hurtling through the void. I think if there was a God,
| he would've given up on us long ago. He gave us a paradise
| and we used everything up. We dug up every ounce of energy
| and burned it. We consume and excrete, use and destroy.
| Then we sit here on a neat little pile of ashes, having
| squeezed anything of value out of this planet, and we ask
| ourselves, "Why are we here?" You want to know what I think
| your purpose is? It's obvious. You're here along with the
| rest of us to speed the entropic death of this planet. To
| service the chaos. We're maggots eating a corpse"
| nyokodo wrote:
| > Millions are starving today on American streets
|
| Millions of Americans suffer from "food insecurity" i.e.
| "reduced food intake and disrupted eating patterns at
| some time during the year." [1] This is very bad, but,
| there are also food stamps, soup kitchens, food banks,
| school lunches, family members, and random good
| samaritans that prevent actual famine amongst those
| populations because there is no shortages of food
| present. This is _very distinct_ from real mass
| starvation where millions of people are dying of hunger
| in a famine where there is insufficient food available
| which is what I believe the GP is referring to.
|
| 1. https://www.ers.usda.gov/topics/food-nutrition-
| assistance/fo...
| happytiger wrote:
| This is a re-shoring of strategic capabilities not a labor
| move. The labor will most likely be imported as it doesn't
| really exist in the US at the scale needed with an eventual eye
| towards more domestic labor. Expect large numbers of imported
| skilled labor in the short term.
| icyfox wrote:
| The text of the bill [^1] disagrees with this:
|
| > In awarding financial assistance for planning or
| establishing a Manufacturing USA Institute, an agency shall
| give special consideration to such institutes that
|
| > contribute to the geographic diversity of the Manufacturing
| USA program,
|
| > are located in an area with a low per capita income,
|
| > are located in an area with a high proportion of socially
| disadvantaged residents, or
|
| > are located in small and rural communities.
|
| It seems very much to be both.
|
| [^1]: https://www.congress.gov/bill/117th-congress/house-
| bill/4346
| happytiger wrote:
| Oh yes, the bill has all kinds of nice ideas in it.
|
| But then there is reality. And reality is that there isn't
| some giant labor pool of fab workers in the US -- yet.
|
| - President Joe Biden signed the CHIPS and Science Act into
| law one year ago, and semiconductor companies across the
| U.S. have promised to spend $231 billion on building chip
| manufacturing hubs on American soil.
|
| - Now, as the shovels hit the ground to begin construction,
| companies are realizing how difficult it is to find talent.
|
| - Taiwan Semiconductor Manufacturing Company said it had to
| delay production at its $40 billion Arizona plant due to a
| lack of workers in the U.S.
|
| https://www.cnbc.com/2023/08/09/us-chip-sector-talent-gap-
| em...
| bombcar wrote:
| Whatcha talking about? My small rural area is full of
| unemployed semiconductor engineers ;)
|
| (Though it could be - if you can wait 20 years you could
| home grow it)
| hollywood_court wrote:
| I imagine we'd have that skilled workforce if companies paid
| enough.
|
| I'm a former construction contractor who reinvented myself as a
| software developer.
|
| Each time I run into one of my former peers in the construction
| industry I hear the same complaints from them. "We can't hire
| any good help." Yet they are still paying the same non living
| wages that they have for 30 years.
| sfilmeyer wrote:
| I don't think that dynamic is the same in construction and in
| semiconductor manufacturing. Certain parts of the chip-
| building supply chain just plain don't exist in the USA, and
| so no one in the USA currently has those skills. It's not
| like there are lots of folks with the skills in the USA but
| they're all leaving the industry for higher paying jobs.
| lotsofpulp wrote:
| The reason there are not a lot of folks with the skills in
| the USA is because 30 years ago, the US labor market did
| not appropriately reward those parts of the chip building
| supply chain. Same dynamic as not paying construction
| workers enough, just with a greater time lag.
| javajosh wrote:
| What skills are they, specifically? I'd like to see
| companies like Intel make a resource describing them, at
| least, and at most, offer to pay training costs and offer a
| job at the end of it.
| icyfox wrote:
| To be clear, I'm not saying we can't have this skilled
| workforce. Merely that we don't have it today. So the
| pipeline to employ Americans for these jobs is going to
| require increasing the funnel of people who learn the skills,
| become junior engineers, learn more on the job, then become
| senior engineers. That's a long pipeline to beef up the
| numbers.
| spaniard89277 wrote:
| I'm waiting for those job postings of "Junior Engineer with
| 5 years of experience minimum" in companies with zero
| pipeline of in-house training.
| autoexecbat wrote:
| The type of work does matter. If I had the choice between a
| low-pay office job and a low-pay physical labor job, many
| would pick the office.
| bluGill wrote:
| That depends. When I was young and the weather was nice the
| physical labor job sounded really nice. However physical
| labor also means when it is -1C and raining, or 40C with no
| clouds. Now that I'm older my body isn't willing to do that
| and the office job is a lot nicer (but my doctor keeps
| telling me to stay active)
| plantwallshoe wrote:
| You, sure.
|
| Half the dudes in my high school class couldn't manage to
| write a coherent 5 paragraph essay, so low pay office work
| is not really an option for them.
| bumby wrote:
| Not saying this with snark, but how many of those former
| peers work for companies with a clear pipeline to train
| people? Usually when I hear complaints like "We can't hire or
| keep good help" it's correlated with a company who isn't
| willing to invest in developing their workforce.
| bluGill wrote:
| Not sure where in construction he was, but I've worked
| framing crews before, and the boss would hire anybody (not
| disabled) who said they were willing to work hard. It isn't
| hard to teach someone the basic tasks and most people could
| catch on in just an hour. Most people though realized it
| was physically hard work and quit in a week (even though
| this should be obvious).
|
| Plumbers and electricians have a good start from nothing
| apprentice program. They are sometimes hard to get into,
| but I know a few people who have gotten in over the years.
| specialist wrote:
| Yes and:
|
| Record corporate profits while wages stagnated. Coincidence?
|
| Is American labor really more expensive? Really?
|
| Or do American workers simply have the unforgivable
| expectation of some kind of profit sharing?
|
| (Yes, yes, yes. CoL in the economically important parts of
| America is higher. Again, the root cause being windfall
| profits for the elite.)
| eitally wrote:
| I don't buy this for a minute. It's very easy to train people
| to work in factories and there are lots of Americans willing to
| do it if the pay is right. These companies are just complaining
| so they can get more federal handouts to offset the higher
| labor costs of onshoring.
| count wrote:
| These are not those kinds of factories, and it's not 'easy'
| to train for. And Americans are surely WILLING to do the
| work, but have no idea how.
|
| If it was so goddamned easy to build a chip fab, they'd be
| all over the place - _everybody_ needs them, and they 're
| extremely strategic.
| bombcar wrote:
| Is it that the work is impossibly skilled or that there's
| only so much demand to go around and the capital costs to
| build a state of the art fab is just astronomically high?
| Leary wrote:
| What's the most advanced node Intel is producing in the US right
| now in mass production?
| neogodless wrote:
| https://siliconangle.com/2023/09/29/intel-begins-mass-produc...
|
| I believe "Intel 4" is their current most advanced mass-
| produced process.
| Leary wrote:
| Thanks for the response. The article only mentions Ireland
| though, has Intel done the same in the US?
| beefman wrote:
| If Intel got $8.5B how come the stock didn't go up?
|
| https://finance.yahoo.com/quote/INTC/
| kqr2 wrote:
| That government money was probably already factored into the
| stock price.
| doctoboggan wrote:
| Because everyone was expecting this to happen when the CHIPS
| act passed.
| DSingularity wrote:
| It's been priced in. Many indications that this was coming.
| Salgat wrote:
| A combination of the stock price already having that
| expectation built in along with CHIPS intentionally funding
| domestic overcapacity that has its own maintenance overhead.
| Chip demand is cyclical, which is why chip fabs aren't built to
| handle peak demand; it would be too expensive for the times
| when they aren't running at full production.
| hshsh667 wrote:
| These (and probably all) are growth stocks. They have no
| relationships to the real world anymore unfortunately.
| jjtheblunt wrote:
| They didn't get the money. Reading the article, the first
| sentence explains this is just a proposal...but even the
| commerce.gov headline is misleadingly worded (to your point).
| no_wizard wrote:
| Wouldn't GlobalFoundries (HQ in New York and supposedly on the
| "Trusted Foundry" list) have made more sense, since they
| fabricate chips for multiple different companies, where as Intel
| only makes them for Intel?
|
| Boosts a competitor, opens up fab capacity for _all_ and moves
| the needle on the intentions behind the CHIPS act, all at once.
| pavon wrote:
| GlobalFoudaries is receiving $1.5B from the CHIPS act. While it
| might have made sense to try to help them catch up to the
| competition a decade ago, today we just want to have any
| domestic capability comparable to TSMC in case China decides to
| invade Taiwan. Intel and TSMC will be able to get there much
| more quickly than GlobalFoundaries can. Furthermore, Intel is
| opening up their Fab to outside customers.
| solumunus wrote:
| I've not been keeping up with the news but certainly within the
| last few months it's been said they're also getting money.
| dotnet00 wrote:
| Intel has also been opening up their fabs to other customers in
| the past few months.
| Symmetry wrote:
| NVidia is actually doing a trial run of a non-critical
| product at Intel right now, and I'm guessing could possibly
| do more if it works out well.
| netrap wrote:
| I think Intel wants to make chips for others as well...
| Aromasin wrote:
| GlobalFoundries are nowhere near the leading edge on node
| process, and Intel have opened up their foundries to customers
| since Pat's return with the advent of IFS:
| https://www.intel.com/content/www/us/en/foundry/overview.htm...
| zachbee wrote:
| 100% right. GF is no longer gunning for leading-edge nodes.
| They've made their niche in mature nodes for low-power chips
| and emerging memories (FeFETS, MRAM, RRAM, etc). If you want
| to get leading edge nodes on American soil, Intel is the best
| bet.
| BeetleB wrote:
| Correction: Intel has had a Foundry business since 2010 or
| 2011. Then CEO Paul Otellini pushed hard for it, but had a
| lot of opposition internally. It then languished after he
| left until Pat took over.
|
| It never died. It was always there. Pat's just fulfilling the
| vision Paul had.
| s1artibartfast wrote:
| Global Founders doesn't have the capital to uphold their side
| of the deal this size.
|
| Intel is investing 75 billion.
|
| GLOBALFOUNDRIES entire market cap is 25 billion.
| randerson wrote:
| Intel could have funded this themselves many times over if they'd
| reinvested their profits instead of paying huge buybacks and
| dividends.
| lenerdenator wrote:
| The goal of a corporation is to generate value for
| shareholders, and we don't give any incentives for them to do
| otherwise.
| gamepsys wrote:
| Corporations should only return cash to investors (via
| dividend or stock buyback) if they do not have a high yield
| way to invest the money internally. A large stock buyback is
| the corporation admitting they do not have good uses for the
| cash. If Intel would take these grants, tax credits, and low
| interest loans and turn around and increase their dividend or
| do a large stock buyback then this would be a simple wealth
| transfer from the US to Intel stock owners. Even without this
| cash flow, these large grants feels like this unfairly
| benefits Intel shareholders at the expense of US Tax payers.
|
| Intel's last stock buyback was in Q1 2021, which was $2.4B.
| There were $14B in buybacks in 2020 [0].
|
| [0] https://www.intc.com/stock-info/dividends-and-buybacks
| s1artibartfast wrote:
| I'm not sure if this was your intent, but it sounds like
| you're describing the world as it actually works.
|
| Companies execute stock BuyBacks when they don't have
| better internal Investments, and that's a good thing!
|
| Intel doesn't care about more us-based Fabs, nor are they
| high yield. This is why the US government has to pay them
| if the US government wants those things to exist.
| gamepsys wrote:
| > I'm not sure if this was your intent, but it sounds
| like you're describing the world as it actually works.
|
| This was in fact my intent.
|
| I would just like to highlight there are alternative ways
| besides grants to encourage Intel to open US based
| manufacturing. Ultimately it's the tax payer that is
| funding this grant, so it's important they feel like they
| are getting a good deal. I think it's also telling that
| Intel didn't invest the $8.5B themselves when they
| clearly had the cash just a few years ago.
| s1artibartfast wrote:
| I'm curious what you think it is telling?
|
| What are the alternative incentives?
| ramblenode wrote:
| > Corporations should only return cash to investors (via
| dividend or stock buyback) if they do not have a high yield
| way to invest the money internally.
|
| *It should be noted that this is true due to the tax code
| rather than some underlying economic principle. Dividends
| are taxable whereas reinvesting is a tax deduction.
| btbuildem wrote:
| I ask again, who are these "shareholders" and why do we
| continue to play along with this monumental scam?
| timmg wrote:
| How do you think companies should work?
|
| If they all re-invested all their earnings into growth,
| wouldn't that mean that every company is growing un-
| sustainably?
|
| And what is the incentive for investors to fund these
| companies that never return anything to the investors?
| randerson wrote:
| Reinvesting in growth seems more sustainable than
| extracting all value until the company can't even keep up
| with its newer competitors.
|
| There's surely a middle ground where a company should
| return _excess_ profits to shareholders when they're
| doing well. Intel was too busy paying out hundreds of
| billions to notice that Apple/TSMC/ARM/AMD/NVIDIA were
| eating their lunch.
| s1artibartfast wrote:
| That doesn't mean that lack of funing was the problem.
|
| If the company leadership can't find a way to get a
| return on the money, why not take it somewhere else?
|
| Intel investors sell and become Nvidia investors.
|
| It seems like people have the blind assumption RnD
| investment always has profitable returns and is the
| limiting factor.
|
| There are real institutional differences and limitations
| to what money can do.
|
| You can't drop a billion dollars on a turd and come back
| the next day and collect 2 billion dollars. When a
| company pays a dividend, it is saying that it can't put
| that money to better use.
| smallerfish wrote:
| Do you have a 401k? You are.
| yard2010 wrote:
| Each day that passes I'm getting closer to 100% believing
| that our economy is merely a pyramid scheme.
| tgma wrote:
| Intel could have (and has) funded building fabs themselves, but
| if we are advocating for a free market solution, why would they
| build it in the US vs somewhere cheaper? Forcing their hand to
| do it inside the US does not seem like a fair free market
| solution either. There has to be either a carrot (subsidy), or
| a stick (tarriffs and embargoes) to nudge them to bring it back
| home; neither is a clean free-market solution. The additional
| money is to bridge the gap and cover the unfavorable conditions
| for conducting the business in the US.
| randerson wrote:
| I just question whether the government is backing the right
| horse. Intel has been losing market share in every segment
| for years despite once having everything in their favor: a
| head start, a strong brand, mountains of cash. They failed to
| capture the mobile phone and tablet market altogether. And
| the govt thinks Intel can make AI chips that compete with
| Nvidia?
| verisimi wrote:
| We should give Intel 50bn of taxes, nevermind the roads, schools
| or anything else! And give Google and Facebook some bns too! And
| Tesla could always do with more, why not?
|
| PS why not through a few bns at public housing too to preserve
| mixed society, like Paris? Mixed society is surely worth it...
| It's only money! And it won't spend itself!
|
| https://news.ycombinator.com/item?id=39765692
| ThinkBeat wrote:
| Too big to fail coming the rounds again?
|
| Intel failed to keep up with competition due to some really bad
| decisions and incompetence.
|
| Now they are bailed out by the Biden administration with a giant
| state subsidy. I think this falls under protectionism. which
| might cause problems with the WTO.
|
| I would guess the administration will or already have filed it
| under "National security" or something similar.
|
| Where does this money come from? Has it been fully funded by
| congress? (hopefully)
| singhrac wrote:
| I think actually the problem with this program is not the
| recipient (I mean, Intel is literally the only American company
| building fabs in the US) but the structure. The problem with US
| fans is that the skilled Taiwanese workforce is simply willing to
| work for less and more flexibly.
|
| We could easily solve that problem if we were willing to do what
| China is doing, which is paying Taiwanese PhDs, engineers, and
| technicians to come to the US. Give them a streamlined visa and
| green card process, and pay them a cash bonus to emigrate.
|
| I mean, this is America's core strength - we have strong
| Taiwanese communities they could integrate into, a social
| structure that is ultimately much more positive on immigrants
| than most places in the world, and incredibly high salaries.
|
| A lot of people talk about training a US workforce, and I totally
| agree we should embrace that. But there are limits, and
| ultimately as a country we should encourage skilled immigration
| whenever and however we can. After all they'll train locals
| eventually, even if by proximity.
| ericd wrote:
| Absolutely, we should be trying extremely hard to skim the
| cream of the rest of the world. That's historically been one of
| our greatest strengths/abilities.
| eitally wrote:
| 100% this.
| maerF0x0 wrote:
| > Taiwanese PhDs, engineers, and technicians to come to the US
|
| Isn't this already present in H1B and other Skilled /
| extraordinary persons programs?
| FpUser wrote:
| From the position of high value employee making good living:
| If I get a green card I will move. If I get a visa that ties
| me to employer and I am at the constant threat of being
| kicked out then fuck it.
| FpUser wrote:
| I bet that the minute the US rolls up red carpet to Taiwan's hi
| tech experts will be the minute Taiwan will fight it either
| soft way (increase the salaries) or the hard way (introduce the
| laws preventing them from leaving the country). Should Taiwan
| loose leading position their value and security guarantees will
| all go down the toilet.
| BeetleB wrote:
| > We could easily solve that problem if we were willing to do
| what China is doing, which is paying Taiwanese PhDs, engineers,
| and technicians to come to the US. Give them a streamlined visa
| and green card process, and pay them a cash bonus to emigrate.
|
| Well actually ... TSMC poached a number of Intel employees (who
| already had green cards and/or naturalized citizens). If Intel
| could have paid them more to stay, I'm sure they would have.
| FredPret wrote:
| We're living through the silicon age and Intel has made a total
| dog's breakfast of it.
|
| Stagnant revenues, falling profits. Both should have been growing
| geometrically.
|
| Just compare these companies:
|
| https://valustox.com/INTC
|
| https://valustox.com/AMD
|
| https://valustox.com/AVGO
|
| https://valustox.com/AMAT
|
| Even Qualcomm has seen good growth: https://valustox.com/QCOM
|
| This is how it's done: https://valustox.com/NVDA
|
| EDIT these guys aren't primarily chipmakers, but they're deriving
| at least a couple of $Bn per year from making good ones:
| https://valustox.com/AAPL
| pkulak wrote:
| Well, you can chase short term profit and send your designs off
| to TSMC, or you can own your own foundry. This is exactly why
| it's in the interest of the US government to ensure that Intel
| doesn't totally abandon US manufacturing just like AMD did
| years ago.
| FredPret wrote:
| Not saying INTC isn't valuable - just saying they seem to
| have missed the boat in a big way and changes are in order.
|
| The US does of course need on-shore chip foundries for
| strategic reasons.
| rileyphone wrote:
| Pat Gelsinger only returned 3 years ago, it just takes a
| while for changes to propagate through an org as large as
| Intel.
| FredPret wrote:
| I hope you turn out to be right.
| markhahn wrote:
| +1 this. Intel let MBA-think drive too many decisions (ie
| EUV). Maybe there was some misperception there, even
| cultural bias.
|
| Pat's biggest real change has been to push the company
| towards process leadership. They always had good designs,
| though perhaps also damaged by MBA-think there too.
|
| Still not sure about the decision to get out of non-
| volatile memory, though perhaps that was just a scope
| decision. Obviously, you could make a pretty amazing AI
| device with a whole bunch of NVM in-package...
| mywittyname wrote:
| It was not obvious to Intel leadership that the future of
| manufacturing was to become a contracted fabricator of the
| design of other companies. Vertical integration and total
| control over both design and manufacture of chips was the
| obvious (and, until recently) successful path. What board
| would keep an Intel CEO that presented the idea of shifting
| the primary focus of the company to manufacturing the
| designs of other companies whose products are in direct
| competition to Intel?
|
| Intel is a perfect example of why companies need to
| regularly kill their old selves in order to survive. But
| it's also a perfect example of why so many companies fail
| to do so, since it often involves making what appears to be
| a terrible decision at the time, and convincing a bunch of
| people who know better to back you up. Very few leaders
| have the clout to pull this off.
|
| The success of TSCM was the result of an interesting
| confluence of events: including the existence of ARM; Apple
| deciding that they were going to design their own hardware
| and outsource its manufacture; Nvidia developing CUDA; and
| the machine learning/AI revolution that drove demand for
| Nvidia cards.
|
| If you take away any of those pieces, I think TSCM doesn't
| become the powerhouse it is today.
| bgnn wrote:
| It's TSMC. Their rise is waaay before Apple or ARM. Plug
| and play fab model made getting into semiconductor design
| as a start-up possible. Broadcom, Qualcomm, Nvidia,
| Conexant etc all used TSMC in 90s, way before smart
| phones and ARM-mania. Intel saw this coming but they were
| ahead and they didn't worry about it. At the end they got
| stuck at getting bad yield from their FinFETs, which is
| invented by Intel, while TSMC and Samsung moved forward.
| Iphones would have been using Intel processors if Intel
| had a competing product to be honest. They screwed that
| up too. TSMC and Samsung just had the right mindset and
| focus, and a lot of smart and hardworking people.
| Guthur wrote:
| And yet the US has been the biggest pusher of comparative
| advantage economics for everyone else via the world bank and
| imf. What is good for the goose is apparently not good for
| the gander.
|
| Though I totally agree with the strategic imperative I just
| wish the rest of us non US countries would wake up to it and
| stop allowing Western countries to extract economic rent by
| capturing strategic monopolies on energy, goods and services.
| smolder wrote:
| Short term profit focus is arguably what led to Intel's
| engineering decline in the 2010s, despite what you say. An HN
| comment once recounted how they had spun off engineers into a
| another company and then merged with it again in a play to
| avoid pension obligations. That led to at least one
| frustrated engineer leaving and wishing them "good luck with
| 10nm". You often see other comments talking about how
| underpaid these highly educated workers are. Things seem
| hopeful that with Gelsinger at the helm, they may continue on
| the right path.
| hardware2win wrote:
| No shock that profits are failing when they are investing
| heavily
| FredPret wrote:
| I'm not an accountant but they should be able to capitalize
| expenses incurred when it's an investment, ie, since it's not
| really a normal expense profit should not be affected.
|
| I'm not sure how that works with R&D engineering salaries -
| that might impact their profits even if it's an investment.
|
| I feel like a large technology company should spend a large
| but consistent amount of money on R&D - I don't like wild
| swings either way.
| maerF0x0 wrote:
| Also not an accountant, but i believe you two are talking
| differently about gaap and nongaap profit. The latter can
| immediately write of R&D, where as GAAP has rules around
| deprecation of investments.
| metaphor wrote:
| How do you come off with a straight face attempting to compare
| a bunch of fabless design houses with a company that actually
| owns the infrastructure and processes to make tangible
| products, even if not the prevailing sexiest thing?
|
| You're living in a bubble if you think the biggest money
| printer in the world actually cares about the historical
| performance of your cherry-picked stock comparisons.
| ETHisso2017 wrote:
| Then let's look at TSMC: https://valustox.com/TSM
| metaphor wrote:
| I've been looking for TSMC within the domestic borders of
| CONUS for longer than you might imagine.
|
| Reiterating, the money printer doesn't give a flying fuck
| about stock price trends.
| FredPret wrote:
| Not 100% sure what you mean or why you're so antagonistic.
| Who's the money printer in your comment?
|
| Why are my stock comparisons cherry-picked? The companies I
| listed make money from chips. Besides - any investor can
| compare any two companies for market cap, revenue, and
| profit, even if one makes chips and the other sells sugary
| drinks.
| metaphor wrote:
| My response was nothing more than a reflection of your
| remark echoed from a very different perspective.
|
| The money printer I'm alluding to is the US federal
| government. They own the proverbial money trees that $8.5B
| in grants will be plucked from.
|
| The US federal government is also the investor. They
| couldn't care less that the companies you're attempting to
| compare against "make money from chips". If the government
| wants money, they print it, end of story. Furthermore,
| these irrelevant companies aren't getting $8.5B big bucks
| for the simple reason that they _don 't have the
| independent capacity to make their own semiconductor
| products_...they're fabless design houses, dependent on
| other companies' infrastructure and processes...more
| specifically, a certain most excellent company whose
| bleeding edge infrastructure and processes are physically
| located at the doorsteps of its greatest economic
| adversary.
|
| What the US federal government more immediately cares about
| are sufficiently advanced fab owner operators, more
| specifically, those rooted deeply in domestic soil...and
| who better to incentivize than a domestic former alpha dog
| who ate his own breakfast. Intel isn't leading at the
| margins anymore, but they're certainly not out of the game.
|
| If you're still not seeing the bigger picture, then I'd
| recommend reading this recently discussed[1] short story by
| Arthur C. Clarke to get a relevant feel for the underlying
| threat landscape.
|
| [1] https://news.ycombinator.com/item?id=39737084
| jp42 wrote:
| Intel can save a lot of money by getting rid of incompetent
| folks in higher management, closing a lot of projects/teams
| that do not add value, a lot of middle management, simplifying
| processes that slow down the teams that are actually doing job,
| changing culture where working 10hr/wk is not tolerated. They
| need to do some variation of what Elon did to twitter. I have
| seen many of these things first hand.
| FredPret wrote:
| I agree - management cruft abounds in most large corps. The
| hard thing is you need a really skilled CEO to cut through
| all of it correctly.
| SnorkelTan wrote:
| I don't think twitter is a really good example considering
| its equity value has fallen precipitously under his reign.
| jp42 wrote:
| I am not saying Intel needs to cut 80% like twitter, what I
| am trying to say that Intel can cut a lot without any
| impact.
| UncleOxidant wrote:
| > closing a lot of projects/teams that do not add value
|
| I hear what you're saying, but that's also kind of how they
| got in trouble isn't it? They had an ARM license and a good
| implementation (at the time) StrongARM, but they shut that
| down just before smart phones hit. Intel is notorious for
| shutting down projects like that just before they could have
| been profitable so they can "focus on their core
| competencies".
|
| > They need to do some variation of what Elon did to twitter.
|
| Doing to Intel what Elon did to Twitter sounds like a
| disaster. Yes, Intel needs a shakeup, but don't completely
| destroy it. It's the largest chipmaker in the US and has
| actual fabs. I think Gelsinger is on the right track, but
| it's going to take time.
| supportengineer wrote:
| >> dog's breakfast
|
| Native English speaker here, I've never heard this expression
| before?
| slavik81 wrote:
| It's an idiom meaning an unappealing mixture or a disorderly
| situation. https://en.wiktionary.org/wiki/dog%27s_breakfast
| agd wrote:
| Not sure about elsewhere, but it's a common expression in the
| UK.
| dietmtnview wrote:
| It blows my mind how much these large firms have totally
| dropped the ball. It's like IBM levels of decline.
| mlsu wrote:
| Only one of the companies you listed makes chips.
| __lbracket__ wrote:
| nah, semiconductor design, fab and research would still pay like
| shit. Go back to building your CRUD apps.
| rhelz wrote:
| WRT to lack of a skilled workforce, here is an interesting
| anecdote. I remember back in the late 90's, Intel had to fire
| most line workers in their FABS, and hire people with Ph.D.'s in
| solid-state physics.
|
| I actually knew one of these people who were fired: She was our
| housecleaner. And--like the supper-smart garbage man of the
| Dilbert Cartoons, she was very smart. Smarter than me. I know
| because she helped me solve some problems I couldn't solve on my
| own.
|
| Why was she cleaning houses? Tragic story. No doubt she could
| have gotten a Ph.D., but she was older, had some health problems
| which wouldn't let her work 60-80 hours a week. And she was
| black, perhaps discrimination was a factor too.
|
| I'd hate to even think of how smart you have to be to work in
| FABs today, but let me tell you, not even $8.5 billion is going
| to create more of these people. Best you can hope for is you can
| pay them enough to get them to work for you.
| up2isomorphism wrote:
| Maybe too much money is exactly the problem? I rarely see
| people tackling hard problem for money, because it is not an
| efficient way of making money.
| Esras wrote:
| Too much money in what context? It can be an extremely
| effective motivator for solving a business problem - hire
| smart people to work on it, they'll happily go work for
| double their pay.
| adolph wrote:
| A baby can't be made in one month just because you had the
| money to hire 9 surrogates.
|
| Many processes do not scale just because a money spigot
| turned on. What most often does scale as quickly as
| monetary availability is fraud, waste and abuse.
| MichaelZuo wrote:
| There are thousands of items on the agenda in the present
| day, everything from better open source LLMs to moon-base
| railway designs, so even if 99% of these turn out to be
| duds that can't be budged, there are still sufficiently
| many remaining to absorb all bonafide super-geniuses on
| Earth several times over.
| adolph wrote:
| In this particular item on the agenda, chip fabs, it is
| not clear spending more money one time will produce a
| result, much less a faster result by attracting "bonafide
| super-geniouses." One might respond that "you can't win
| if you don't play" which would lay bare the gamble.
| MichaelZuo wrote:
| Chip fabs is just one of 'many processes' which was what
| I was replying to. It's irrelevant if even 99% of all
| processes have this characteristic. There's way more than
| enough remaining to occupy all available people who could
| credibly claim to speed up large complex projects things
| up 10x.
| II2II wrote:
| While you could convince me that too much money would attract
| the wrong type of people, you would be hard pressed to find
| more competent people by offering less money. (I'm not
| dismissing that there are other motivations involved, just
| the ability to grow a talent pool by offering less.)
| bluGill wrote:
| Once you have a "good life" you start looking for other
| things than money. I know a few people who have quit a good
| job they didn't like for one that paid a little less but
| they liked more. Though there is a limit to how far someone
| can go down in pay before they don't like the new job
| because of pay.
| eitally wrote:
| That's a silly anecdote and I have a hard time believing chip
| fab line workers are too much different from those in other
| types of high-tech (where I spent 15 years working on test
| automation & quality systems). Some smart folks, for sure, but
| almost zero roles required even actual engineering background.
| A lot of management had strong technical education, but the
| vast majority of line workers are just following simple
| instructions.
|
| I could be wrong about how fabs work, of course, and would love
| to learn more.
| curiousllama wrote:
| Having seen a few 'high tech' places myself: there's high
| tech, and then there's _high tech_.
|
| Assembling a motherboard is to semiconductor fabs as flying a
| toy drone is to landing a Boeing 747. One you can learn in an
| afternoon; the other takes years to learn.
| nickff wrote:
| You cannot learn to assemble a motherboard using modern
| manufacturing equipment in an afternoon. Pick-and-place
| operation is a week-long course alone (specific to that
| machine, and assuming you are already familiar with the
| process), and there are at least a screen printer and
| reflow oven involved as well.
| curiousllama wrote:
| Yea fair lol - def an exaggeration. (And my experience is
| def not first hand, here)
|
| But still - a lot easier than semiconductors
| Workaccount2 wrote:
| One of the most critical aspects of engineering is making
| it so advanced high tech things can be manufactured by the
| least skilled and least number of skilled people possible.
|
| Don't confuse that with the workers not being skilled -
| many are, but just like good software, you want your
| designs to run well even when executed by the worst
| hardware.
| bluGill wrote:
| Actually engineering often means need more skilled
| workers as the unskilled work was replaced. 1 person
| running the machine who understands more of the
| engineering as opposed to 100 with a saw.
| duped wrote:
| Making PhD engineers operate/maintain/monitor a wire
| bonding machine seems expensive.
|
| I worked in an R&D fab (albeit, as an intern, many years
| ago) with an abnormal number of PhDs around (the fab was
| essentially a small scale test bed for new products and
| processes - everything tested there first before scaling up
| overseas). I think we had a 5:1 ratio of techs to
| engineers. This was in a fab that basically did nothing but
| R&D and low volume manufacturing for defense.
|
| It's comparable to any kind of high-tech manufacturing
| where you have engineers designing/testing stuff (and
| designing the tools to make and test the stuff in the first
| place) while there have to be techs/mechanics/machine shop
| workers to actually do the work of making it. It's
| inefficient and expensive to put the engineers on that
| task, while they'll still need to do it from time to time.
| cogman10 wrote:
| > Assembling a motherboard is to semiconductor fabs as
| flying a toy drone is to landing a Boeing 747.
|
| I disagree. I live next to a fab and have coworkers that
| have worked the fabs.
|
| Humans in fabs are taken out of the loop as much as
| possible. That's because when dealing with nanoscale
| structures, human error is simply too common.
|
| One of my coworkers worked at the fab during a period where
| they had humans running the forklift that moved the wafers
| from one stage to the next. That was cut out because the
| tiny bumps caused by a human operating the controls caused
| imperfections in the chips that decreased yield (the metric
| that matters most for a fab). They ultimately removed that
| work and job and replaced it with robots to carefully move
| the wafers.
|
| What's complex about a fab ends up being not the frontline
| work, but rather the layer or 2 in the back (like designing
| the lithography filter for a given chip). That stuff happen
| outside the actual plant.
| rhelz wrote:
| > Humans in fabs are taken out of the loop as much as
| possible.
|
| This. We are talking about Atom scale here. I have as
| much admiration for skilled mechanics as the next guy. I
| heard about a lathe operator at Patek Phillip who could
| turn an arbor to within 1 micron precision, just by
| listening to the pitch the cutting tool made when
| trimming it down.
|
| And when chip features were on the micron scale, humans
| in the loop made sense. But chip feature are ten thousand
| times smaller than that now--4 orders of magnitude.
| Anything that doesn't need a Ph.D. in solid state physics
| to do is going to be automated.
| cogman10 wrote:
| I'm probably revealing exactly which fab, but one issue
| the fab had is when it was built it was placed fairly
| close to the interstate. That did no matter when they
| were at something like 500nm. However, as they slowly
| pulled the node size down they started noticing random
| errors within their chips. It took a while to track it
| down but it turns out semi trucks driving past the
| interstate were causing defects in the chips.
|
| They ended up installing shock absorbers everywhere to
| counteract this problem.
| curiousllama wrote:
| I think we agree? The point is that a semiconductor fab
| (like a 747) is so highly automated that you don't need a
| bunch of low- or medium-skilled folks to drive forklifts;
| you need a few high-skills folks to design, monitor,
| debug & optimize the huge system(s).
| nonethewiser wrote:
| I think you underestimate the amount of people with high
| school education doing very precise, skilled work right
| now. Do you think skilled machines tend to have PHds or
| even bachelors?
|
| Im not saying its as simple as CNC. I am saying that I
| doubt you need an IQ of 130 or a PHD. Start investing in
| the people whose labor were undercut. In fact a skilled
| machinist or technician seems like a much closer match (in
| terms of skill and willingness to do the job) than some
| with an electrical engineering PHD or something.
| bagels wrote:
| Skilled machinists?
| ok123456 wrote:
| It takes education and practice to take a CAD model or
| technical drawings and run the machines to produce it.
| RobotToaster wrote:
| > Assembling a motherboard is to semiconductor fabs as
| flying a toy drone is to landing a Boeing 747.
|
| A 747 can pretty much land itself on autopilot.
| notact wrote:
| What are the conditions and steps necessary to engage
| autopilot during landing? What are the failure
| conditions, and the steps necessary during a malfunction
| when autopilot is engaged?
| bluGill wrote:
| On a clear day with perfect conditions ground control can
| probably get you on the ground and you walk away safely.
| The plane may not be safe to fly again, but you walk
| away. When there is bad weather (common) or other
| mechanical issues you need a lot more training, and of
| course if you want the plane to survive to fly again you
| want some more training.
|
| The only hard part is contacting ground control in the
| first place. Radio frequencies change all the time.
| ribosometronome wrote:
| https://www.washingtonpost.com/travel/2023/05/20/passenge
| rs-...
|
| WaPo tried it out last year and only the fellow who was
| used to WW2 plane simulators was successful at a probably
| didn't die landing.
| 0xEF wrote:
| Just in case they are paying attention, I would love to
| relocate and go to work for Intel. Following simple
| instructions sounds terrific, to me. Where do I send my
| resume?
| nonethewiser wrote:
| I think people are also underestimating the intelligence of
| people in the once very large manufacturing workforce.
| bluGill wrote:
| It doesn't help that the union culture is opposed to
| promoting smart people. If you work an assembly line you
| are not better than anyone else on the line, so their
| position makes sense - smart people are not worth more.
| However it also means smart people that want to move to
| management (want - if you are content that is your choice)
| find things worse: you are required to start at the bottom
| and your previous experience doesn't count for anything
| (including the pension)
| smallmancontrov wrote:
| The decline in American manufacturing happened alongside
| a decline in union membership in manufacturing. If unions
| were the causal factor, why do these trends coincide
| rather than oppose?
|
| Alternative theory: Protectionism industrializes and
| trade liberalization deindustrializes. Alexander
| Hamilton's protectionist policies weren't just successful
| at industrializing the USA, he and his successors were
| correct as to why they were successful. The relatively
| recent shift to trade liberalization, by contrast, had
| the generally accepted effect of such policies on the
| industrial base. Of course, assets got pumped along the
| way and that's what really mattered to the people in
| charge.
| znpy wrote:
| > but almost zero roles required even actual engineering
| background
|
| Small anecdote: pat gelsinger, intel ceo, started as a
| technician at intel (iirc) at like years old or something
| like that.
|
| That entry level job paid enough that he could have a roof on
| his head and i guess covered his university tuition?
|
| I'm not making this up: it's all in his book he wrote about
| his life (not sure I recommend the book)
| rhelz wrote:
| True, but Pat Gelsinger isn't a good example of what public
| policy we should pursue to help Joe six-packs enjoy a
| middle-class life. Gelsinger is one of the few people I
| would follow blindly into the maws of hell itself; his
| intellect is exceeded only by his ability to lead.
| selimthegrim wrote:
| LTI and Santa Clara are not public institutions.
| 1-6 wrote:
| Could her health problem stem from the fact that she worked at
| the chip fab? Those places are notorious for using chemicals
| that are harmful to humans.
| mfer wrote:
| This award isn't about innovation, the best way to do things,
| or job requirements.
|
| This about supply chain security and national defense. So many
| of our components are made overseas and under governments who
| are not close allies. This is in order to operate things in our
| country.
|
| When you have the FABs in the US and under US control you can
| handle international foreign policy and the security of the
| nation differently.
| chiefalchemist wrote:
| Fair enough. But then the question is: How did this happen in
| the first place? If the Pentagon is playing out scenerio
| after scenerio after scenerio, how did we allow ourselves to
| be so embarrassingly venerable?
|
| And now the taxpayer is on the hook for $8.5B and growing?
|
| There's a certain smell to all this.
| rhelz wrote:
| > How did this happen in the first place?
|
| By not pursuing protectionist public policies.
|
| > the taxpayer is on the hook for $8.5B
|
| $8.5B is a big price tag, but whether the government should
| spend it or not depends on whether or not the investment
| pays off.
| pwthornton wrote:
| This is way bigger than trade policies. Intel was the
| world leader in chip-making until fairly recently. Steve
| Jobs wanted them to build the iPhone chips because they
| were a generation or two ahead of any other fab in the
| world. Today, Intel is no longer leading the world in
| chip fab process.
|
| Intel at the time wasn't interested in fabing ARM chips,
| and the rest is history.
|
| Intel and American fabs fell behind for a number of
| reasons. Some of it is tied to our education system and
| the kinds of people we are training. Some of it is
| probably related to Intel turning their nose up at the
| iPhone chip making, losing billions upon billions of
| money they could have put into R&D. Some of it is a story
| of American corporate culture not innovating enough.
| smallmancontrov wrote:
| > the kinds of people we are training
|
| I was a physics student who took a nanofab class, fell in
| love, and desperately wanted to go down this path...
| until I learned about how complete and utter dogshit the
| wages were. I kept in touch with two classmates who stuck
| with it a bit longer. The free market had to beat them
| over the head a bit longer to get them to let go, but it
| eventually succeeded. Intel was absolutely printing money
| for investors the whole time, of course, and now that the
| material consequences of their poor management have come
| home to roost they are getting bailouts. Yay, capitalism!
|
| Our education system over-produces qualified scientists,
| but if semiconductors are a road to not having a house or
| family and if it pays 5x better to sell ads or stocks...
| you get what you pay for.
|
| I hope this has changed but I wouldn't bet on it.
| rhelz wrote:
| > Intel at the time wasn't interested in fabing ARM
| chips, and the rest is history.
|
| Fun fact, in the late 90's, Intel was the biggest
| manufacturer of ARM chips. I was there at the time, and I
| wrote lots of software to aid in their design.
|
| What happened to Intel was twofold: The first problem was
| that Robert Noyce, Andy Grove, And Gordon Moore died.
| Each one was a once-in-century intellect, and it took
| Intel a while to be able to find somebody who could
| remotely fill those shoes.
|
| The second problem was Intel was making so much money on
| x86 chips, that dedicating any fab capacity to anything
| else--including chips for Apple's iPhone, would for years
| have had such a huge opportunity cost, that the
| shareholders would have sued, and with cause. Because
| literally (not metaphorically) anything they would have
| manufactured instead would have had a drastically lower
| profit margin, and the stock would have tanked.
|
| I suspect that the only reason Intel made a foray into
| ARM chips in the first place was to head off anti-trust
| accusations, and once the political heat was off, they
| dropped them like they were hot.
|
| By the time the market shifted, almost a generation of
| mediocre management had left Intel less paranoid, and
| therefore, less likely to survive.
| markhahn wrote:
| It's also interesting that Intel made some specific bad
| technical choices.
|
| (ie, not investing in EUV, assuming SAQP would work
| forever, ignoring the consequences of everything being
| power-limited...)
|
| This kind of decision is hard, because it's a technical-
| economic tradeoff, and the latter is more voodoo than
| math. And that's not even addressing whether you get
| surprised by things like the LLM boom...
| rhelz wrote:
| You say:
|
| > It's also interesting that Intel made some specific bad
| technical choices.
|
| That's like saying Saudi Arabia made some bad policy
| decisions. If you are in Saudi Arabia, nothing has a
| higher return on investment than petroleum. If you invest
| in anything else, you are leaving money---A LOT of money
| --on the table.
|
| The result is that capital is drained out of any other
| business, and the country gets so dependent on just one
| industry that when the oil runs out, it is a major
| crisis.
|
| Put yourself in the place of an Intel CEO. You've just
| invested $4 Billion in a fab. People will by absolutely
| every single x86 chip that fab will make ~$40 billion
| over the course of the technology node's life time.
|
| Or, you could make chips for the iPhone, which maybe,
| perhaps would be a hit? And even if Apple's wildest
| projections come true, you'll make $8 billion instead of
| $40 billion, because Apple is not going to pay for Intel
| to pocket a 90% profit margin, when it could just go to
| TSMC.
|
| So you are a CEO, and wondering how on the next earnings
| call you are going to justify turning an asset worth $40
| Billion into one worth $8 billion....
| andyferris wrote:
| Was it not possible to build two fabs and make $48
| billion?
| HarHarVeryFunny wrote:
| It seems that what happened to Intel was a lot worse than
| just missing Andy Grove's paranoia...
|
| - They missed the mobile market
|
| - They missed the gaming market
|
| - They missed the AI/ML market
|
| - They got multiple generations behind TSMC and Samsung
| in the fab business
|
| - They lost a whole bunch of market share to AMD,
| including datacenter
|
| The NY Times article is paywalled, so I can't read it,
| but I have to wonder what kind of fabs they are meant to
| be building for our (taxpayers) $8.5B ? I wouldn't have
| any faith in them building a SOTA fab at this point.
| chiefalchemist wrote:
| When you connect those dots this feels more like a pseudo
| bailout in disguise.
| rhelz wrote:
| Oh, its not a pseudo bailout. It's a bailout full stop.
| Doesn't mean its a bad idea.
| rhelz wrote:
| You are forgetting two things:
|
| 1. All those happened after Andy Grove's time.
|
| 2. And when Andy Grove _was_ at the helm, Intel did not
| miss opportunities like that. E.g. when Intel 's memory
| chip business started losing market share to the Japanese
| (who were at the time a low-wage country), they were able
| to transition to CPUs in time.
| jjtheblunt wrote:
| to your point, right around the time of the iPhone
| (roughly)
|
| https://en.wikipedia.org/wiki/XScale#Sale_of_PXA_processo
| r_l...
| chiefalchemist wrote:
| > By not pursuing protectionist public policies.
|
| Perhaps. But the more likely correct answer is: The MIC
| doesn't make chips. They couldn't and wouldn't push for
| something that didn't deepen their pockets.
| jart wrote:
| > How did this happen in the first place?
|
| Texas Instruments didn't give guys like Morris Chang enough
| opportunities to advance.
|
| That's why TSMC was founded.
| faktory wrote:
| While I agree with you I would say that supply chain is
| upstream of chip-production.
|
| The mining industry needed those money not Intel. It's the
| mining industry that's been neglected the last 20 years or
| so.
|
| It will take at least 10 years to get anything resembling
| chinese supply chain in place.
| kurthr wrote:
| The chip supply chain is a lot shorter and more
| concentrated than the mining supply chain. If you're
| thinking of "rare earth" metals in particular, it's
| probably better to focus on the refining rather than
| digging out of the ground. Between South America, West
| Africa, and Australia there are lots of mines for most of
| the metals, but only refining in China (because it has been
| highly subsidized by both monetary and regulatory means
| since the 90s). Silicon refining is similarly bottlenecked
| even though the high quality input material is mostly US
| sand.
| faktory wrote:
| We HAVE have to focus on the rare earth part or you are
| basically just giving China the whole thing as they
| control more then 90% of refinement (and almost all of
| mining)
| beauzero wrote:
| Refining is dirty and dangerous so it has been pushed
| out. Used to work for a Canadian gold mine in Montana in
| the mid 90's. Most of the friends I graduated with went
| overseas for new mines or were Environmental engineers
| focused on cleaning up messes from the late 1800's early
| 1900's.
| BostonEnginerd wrote:
| There's substantial wafer capacity in the US, from silane
| production, through polysilicon granule production and
| wafer making. There are several different wafer makers in
| the US with both 200mm and 300mm wafer capacity.
|
| Some of the silane and polysilicon companies are US
| owned, but I don't think that any of the wafer makers are
| US headquartered anymore.
| okasaki wrote:
| > under governments who are not close allies.
|
| I wonder why...
| UncleOxidant wrote:
| Aren't the vast majority of line workers in a fab people with a
| bachelors degree (or less)? The process engineers might be
| PhDs, but not most of the folks working in the fabs. Also, fabs
| are becoming more and more automated, so less people are needed
| overall.
| kevin_thibedeau wrote:
| Intel became the biggest sponsor of EE H1Bs in this time frame.
| They were trading competent citizens for compliant serfs.
| Raydovsky wrote:
| IIRC The original chips act had a provision that companies
| would have to train and hire X% of non-white/non-asian
| engineers.
| gen220 wrote:
| It wasn't just intel, it was every semi-conductor manufacturer
| in the valley (hence the inability to find other work).
|
| They closed because it was cheaper to build in other countries,
| or to outsource from contractors who build in other countries
| (where organized labor doesn't exist). The U.S. lost thousands
| of high-paying (and tax-paying) labor positions and atrophied
| the skills that went with them. Intel profited from it.
|
| These people were disproportionately minorities,
| disproportionately well-represented by unions, and had made a
| lot of progress in improving their working conditions re: use
| of terribly corrosive chemicals. All of that backslid when
| labor went off-shore.
|
| Now, the taxpayer has to pay Intel $8.5B to bring back
| manufacturing capacity to the U.S.; nice job, if you can get
| it. It'll be really interesting to see who takes these jobs,
| and how quickly we can rebuild the muscles that Intel
| shareholders profited from decomposing.
| ancorevard wrote:
| Intel cleared the only hurdle necessary to get this money: they
| are willing to do the DEI hires.
| jjtheblunt wrote:
| Title on commerce.gov isn't quite what the first sentence says,
| which is they announced a _proposal_, not a done deal.
|
| U.S. Department of Commerce Proposes up to $8.5 Billion in
| Potential Direct Funding for Intel Under President Biden's
| Investing in America Agenda to Support Multiple Projects in
| Arizona, New Mexico, Ohio, and Oregon
| exabrial wrote:
| Oh good, another bunch of board members can now afford their
| yacht club memberships for 2024.
|
| These handouts need to stop.
| lenerdenator wrote:
| The alternative is to be dependent on the rest of the world for
| chips.
|
| The market decided that the most efficient transaction is to
| offshore all of this infrastructure to geopolitically-
| compromised areas and pray that China never does what every
| other emerging power in the history of geopolitics has done.
|
| The market chose wrong.
| aylmao wrote:
| > pray that China never does what every other emerging power
| in the history of geopolitics has done.
|
| I am curious what you mean by this precisely. What other
| emerging powers have done what?
| mortify wrote:
| The market chose what it could based on the conditions that
| exist. Make is easier to people to open new businesses and
| expand existing ones, and people will do so. Creating hostile
| environments and then choosing who gets free money to
| overcome those difficulties is not much of a market.
| ChrisArchitect wrote:
| More discussion: https://news.ycombinator.com/item?id=39764821
| WhereIsTheTruth wrote:
| Capitalism 101, get tax payer money to fund your big projects!
| TradingPlaces wrote:
| Now all they have to do is compete with TSM, which is widely
| known to be a very simple thing.
| maerF0x0 wrote:
| > The Biden administration, equipped with $39 billion in
| subsidies to distribute,
|
| IMO this is the major problem in American politics (maybe world
| too)- That we have the government picking and choosing winners
| before the game is even played.
|
| IMO we should be rewarding the winners in a after a fair game
| with rules tailored to what we want to incentivize. Eg: A per
| chip, per TFLOP or other intelligent metric reward AFTER the item
| is produced and sold on the free market. IMO The government
| should not be financing or changing the capital structure of any
| corporation, instead investors should take the risk and use
| financial structures available to chase the rewards.
| thunkshift1 wrote:
| > "fair game" : are you certain tsmc has not received handouts
| from their government
| maerF0x0 wrote:
| I'm not.
|
| But what I'm referring to here is the goal of having American
| produced chips. If TMSC wants to produce in America, and a
| foreign government wants to foot the bill, then what would be
| the issue?
| roody15 wrote:
| Often politics and fine print gets in the way. It's hard to find
| qualified talented people to build and run a fab Now imagine all
| the DEI requirements that are added into this grant.
|
| If it is really a national security issue to get onshore fans
| here in the US they really need to drop all the social equity
| attachments.
| Gerlo wrote:
| My employer spent hundreds of millions of dollars on Intel
| hardware for a major system, and it still hasn't seen the light
| of day due to complete incompetence on Intel's part. I look
| forward to seeing how they mismanage this money.
| andy_ppp wrote:
| I said this about China trying to make chip investments but it
| applies to the US too. It's extremely difficult for government to
| pick who should be winners with investments like this, and then
| the question of what is next, x-ray lithography, photonics or
| something else. I suppose this is quite far into the future and a
| moot point as the AGI will have moved the humans into a
| simulation by then to avoid any problems with them.
| aylmao wrote:
| I'm a foreigner native to one of the many nations where American
| influence led to the sale of sate enterprises, free trade, market
| liberalization, and overall loss of local companies to the hands
| of USA firms
|
| It's wild to see the same thing happen to the USA now, and to see
| their government be the ones handing out taxpayer money and
| caring about national sovereignty over liberalization and "market
| efficiency".
| cmrdporcupine wrote:
| It's been happening for decades in other industries. Especially
| automotive. Same (worse) here in Canada.
|
| To me it's a sign of a sector in decline.
| dietmtnview wrote:
| As a US citizen, it's pretty wild to live through. Socialism
| for the rich, rugged individualism for the rest of us.
| Nifty3929 wrote:
| Unfortunately no, it's socialism for us too - just the wrong
| end of it. The government and their friends are the socialism
| winners, the rest of us are the socialism losers.
|
| But we do it to ourselves at the ballot box every time, and
| very reliably.
| yard2010 wrote:
| I don't know what the heck you are talking about. Socialism
| is not the kind of bs like capitalism or communism, it has
| no winners nor losers everyone is in the same boat.
|
| Anything else is just some crooked politicians, could be
| billionaires but don't have to, getting more rich and
| powerful and say whatever they have to say to keep it this
| way.
| s1artibartfast wrote:
| I don't see how socialism is any different. It is still
| the state taking from one person to give to another.
|
| How is anyone in the same boat with Socialism? Unless
| your metaphor is that some paddle and some don't, but
| everyone goes the same speed
| faktory wrote:
| This is such a horrible approach to succeeding and will not do
| anything good for anyone.
|
| Those factories will be mostly automated and so the idea that
| they will come with lots of jobs is misguided. On top of that to
| the extent this is a good idea the private market have no problem
| finding the money for that themselves.
|
| The real issue is in the actual materials i.e. rare earth etc
| which is where the government completely dropped the ball the
| last 20 years.
|
| 8.5B going to the mining industry would make sense not to Intel.
| Nifty3929 wrote:
| $8.5 in corporate welfare, out of a total of $39B that "Biden has
| to spend." - That's about $100 per person in the US. How about
| just give us each $100 instead, and we can vote with those
| Dollars for what we want? Maybe we'd rather invest it in food,
| clothes, shelter, transportation, etc.
| tgma wrote:
| I suppose at least the theory is $100/person invested in chips
| will collectively benefit us more as we will not lose the
| strategic advantage in chipmaking. Surgical planned economy to
| cover the gaps in market economy and tragedy of the commons
| situations.
| amateuring wrote:
| planned economies only enrich the planners
| tgma wrote:
| Strictly speaking that is manifestly false (the "only"
| part). At the very least, in practice they usually enable a
| bunch of unnatural markets/behaviors (usually falling under
| "corruption") that enrich many ancillary parties in
| addition to the planners, even if they don't enrich the
| general population (last I checked the west was filled with
| plenty of Marxist-adjacents who make arguments of such
| sort, so I suppose it it is not a given for everyone). To
| be clear, I am not advocating for the grant per se; just
| describing a theory the other side might be operating
| under.
| xyst wrote:
| Something about giving a multibillion dollar company government
| grants rubs me the wrong way.
|
| Most of the money probably goes into hiring useless consulting
| firms to "do the leg work".
| JonChesterfield wrote:
| Nah, this is intel. They'll spend it on a dividend.
| dheera wrote:
| Dividends don't make you any money because the rest of the
| passive-aggressive investors downvote the stock price by
| exactly the dividend amount when dividends are given.
|
| If everyone agreed to maintain the stock price when dividends
| were issued, the dividends would be useful.
| orangecat wrote:
| _the rest of the passive-aggressive investors downvote the
| stock price by exactly the dividend amount when dividends
| are given_
|
| This is the expected result if markets are correctly
| pricing stocks. The value of a company is its assets plus
| its future income streams. When a company pays a dividend,
| its cash assets decrease, so the value of its stock should
| decrease by that same amount.
| swarnie wrote:
| Its a faction of the money you'll spend defending East China
| from reunification.
|
| /s/s/s//s/s/s/s (because a lot of you struggle)
| alexnewman wrote:
| Call me hopeful and sceptical that you can do this in the USA.
| The employees are just ganna flip jobs
| stalfosknight wrote:
| It's frustrating that Intel is being given truckloads of taxpayer
| money after spending decades falling behind their competitors due
| to arrogance and complacency.
| huytersd wrote:
| I hope these have stringent, result based conditions applied to
| them.
| elihu wrote:
| There's one condition in particular that I think should
| absolutely be part of this: a requirement that Intel offers
| foundry services on an ongoing basis and giving equivalent
| access and prices to foundry customers as they give to their
| own internal customers.
|
| Foundry services are a small part of Intel's business
| currently, but in the event TSMC is disrupted then Intel would
| have a near-monopoly on high-end chip manufacturing. Whether
| Intel is obligated to work with Nvidia, Apple, AMD, etc...
| could make the difference between those companies surviving or
| not.
|
| It's in the interests of the American public that money
| ostensibly spent to mitigate the economic and technological
| fallout of something potentially happening to TSMC is actually
| effective at mitigating that risk in a sensible way, or if it's
| just a huge handout to Intel that they can happily use to dig a
| deeper moat around their business.
| lustrepnd wrote:
| Let's pump and dump.
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