U.S. Government Takes 10% Stake in Intel

No you didn't, front running is a specific form of insider trading and you used the term correctly :)

Probably enough to lead to meaningful indictments and convictions, which will never happen.

And?

Is it too much "magic" for the moneyed geniuses down at Apple? Or is technology not quite their wheelhouse anymore?

Given the circumstances and the relatively low dollars involved, it would be interesting to see the experiment: $10B darpa program to establish a scalable fab ecosystem in 5 years via consortium.

This was how the internet was created, darpa stitched together dozens of performers to get the key ingredients (eg bbn gateways, academic subnets, experimental applications, protocol research.

They even led the last ditch marketing Hail Mary after years of no-one caring about the program besides the zillions of engineers from all around building it by organizing a press day in a hotel ballroom for a demo day.

As a taxpayer I’d strongly support 5B/.1% of the fed budget for a few years just to learn what happens in the attempt.

Deregulate RISC-V, threaten Intel with loss of IP if they can't profit on fabs, threaten to cut Softbank off of American companies if Masayoshi Son won't onshore RISC manufacturing.

There's soft-power coercion left on the table, the only thing we buy with Intel stock is a C-suite's dinner bill.

The US government is paying about $9B to Intel for this (on top of the $2B already paid).

They already are, in a replay of the robber baron era.

Maybe in this specific case, but I don't see this kind of policy as necessarily ideological.

It's just requires the government to not be totally market dogmatist.

It means Intel is far worse off than publicly acknowledged, and without this it might be worthless.

The CHIPS grants had clawback provisions, which carry risk. This transaction removes that risk, so it's very good news for Intel.

> The existing claw-back and profit-sharing provisions associated with the government’s previously dispersed $2.2 billion grant to Intel under the CHIPS Act will be eliminated to create permanency of capital as the company advances its U.S. investment plans.

Because the government having a financial interest in Intel’s success is expected by the market to result in the government acting in Intel’s interest, in order to profit.

Intel is now a meme stock. The gamestop crew is getting in

Government now has a vested interest in seeing Intel succeed. And as much as RW debate in bad faith about cutting public funding being good and private entities should pick up the slack etc. there is no bigger catalyst than government policy. Intel can now get preferential policies like bigger tax breaks/holidays, preferential treatment in government contracts, cheaper access to Federal land etc.

In the long term though, at least in hands of the government like the current admin, they will ensure Intel slows down innovation. They will push for every company in US to use Intel chips in one way or the other - national security and what not. Without competition companies often get complacent - not many can match the might of a government and US govt at that. So, yay for national security and nay for Intel becoming innovation powerhouse.

Haven’t you read Curtis Yarvin’s vision for America? Our leaders, VCs, and owners have

Doesn't matter. All of the US's advanced weaponry systems now use "state of the art" electronic systems, which in the context of defense only means "not decades out of date." Two or three generations old is perfectly fine. The military does not need the latest and greatest CPUs and GPUs going into the iPhone 17 or whatever, but it does need the equivalent of the chip in the iPhone 12 or iPhone 8 or whatever for integration into next generation weapons systems.

But if all of our advanced weaponry used chips from Taiwan or Korea, for example, then the strategic implications for war in East Asia would be radically different. People are right to say that China could engage in war over Taiwan for chips, but for the wrong reasons. It's not that they want access to the fabs (they'd love it, but they're not stupid and they know the fabs and know-how would be destroyed in the war), but it would deny the US defense industry access to those fabs.

If US missiles or drones use chips from TSMC, and TSMC is in occupied territory or a war zone... the US can't make more missiles or drones. And no matter how powerful your starting position is, you can't wage war without the ability to replenish your stockpiles. It's the bitter lesson Germany learned in both world wars.

China wants hegemony in Asia, and to remove the influence of the US, Japan, and their allies within what they perceive as their exclusive sphere of influence. How to achieve that? Invade Taiwan, which eliminates western access to TSMC one way or another, effectively blockading western defense industry from the core things they need to resupply their militaries in a war. Like WW1 all over again, a "preemptive war" becomes the game-theoretic optimal outcome, and the world suffers.

How to counter that? The US and its allies need to make sure they have access to chip fabrication facilities that can produce near-state-of-the-art chips, even at inflated prices that are not commercially viable in peacetime, as well as the necessary strategic minerals like germanium and lithium. Only then does calculus swing the other way in favor of peace. Hence Biden's effort to get TSMC to build SOTA fabs in Arizona, and when that failed/stumbled, this investment in Intel.

Labor is not the key factor driving chip prices or performance. Fabs are highly automated and filled with extremely precise machinery. The maintenance and upkeep of machinery, the yield per wafer, and consumer demand drive the prices. Labor is basically a rounding error.

I haven't heard of them until this comment, but reading through Wikipedia, and a techpowerup article, I'm not seeing that they actually own a license to manufacture x86 cpus freely. It seems like they were able to due to it being a partnership with AMD. I could easily be wrong though.

The major patents on all the most important parts of x86 expired years ago now. Nobody wants to take on a legacy ISA with tons of footguns everywhere when newer ISAs have learned a lot of lessons from x86 about how to do things better.

Sure tough business but, risky compared to what? Intel?

Yeah terrible position to be when your own government is investing in your competitors' company using your own tax dollars.

As a software engineer, this isn't an entirely new concept.

GF is a few nodes behind. Micron doesn't make semiconductors, they mostly make flash and whatnot. TI doesn't have the capacity or knowledge to expand to Intel's size/capacity

re: Micron - Memory is very different from logic chips. You vast number of repeating cells in memory. If any of them are bad you can just turn them off and bin them as lower capacity. You can do that to some extend with logic chips but not nearly as much as memory.

GF hasn't gone past the 12nm node. TI is at 45nm. Micron is on relatively recent processes, but they make RAM, not logic (which are totally different processes). Intel is the only chip manufacturer left that is working in logic at anything like the leading edge.

GF is a zombie company. Micron and TI are both far far away from leading edge. There is only one American company which is both developing and manufacturing leading edge nodes.

As far as I know none of them manufacture anything resembling a replacement for a Xeon, which is relevant to national security because those are uses in military applications.

Yes

I'm surprised to see on https://en.wikipedia.org/wiki/Microchip_Technology that Microchip does in fact have fabs. I thought it was fabless! Its fabs are in the US, but the assembly and test facilities are all across the Pacific.

Neither of them make high performance CPUs or GPUs

GF is like a decade behind in research. Without years to ramp up and update their fabs they're not relevant.

Global Foundries is on 12nm. TSMC is at 3.

I believe the most modern TSMC fabs outside of Taiwan are in Arizona. They are just moving to 4nm which is nearly 5 years old and just a revision of 5nm which is getting close to 7 years old.

TSMC aims to have N3 in Arizona by 2028 at the earliest which is 6 years after it first released. By that time, TSMC will have released N3X, N2, N2P, N2X, A16, and A14.

TSMC is heavily sponsored by the Taiwanese government and was created with the express purpose of making Taiwan so valuable that the West would be forced to defend them against China. Moving newer processes out of the country is against their national interests and they've made it clear that there's no plan to do that.

Outside of Taiwan TSMC foundries are just pumping out already developed non leading edge fab processes. Everyone who matters to TSMC tech development is in Taiwan.