So will Intel need to return some of the 7.9 billion in federal grants as a result of this delay? It looks like 1.5 billion of that was already awarded as recently as last November.
Why would they need to return money they haven't yet received? As you noted, they've only received 1.5 billion so far, not 7.9 billion. The money is milestone based, so the rest of the money will be delayed appropriately.
Because this is what happens. You try to bribe companies and they just take the money and say “oh, yeah fuck off”. Just like all the telecom companies took billions of dollars to build high speed internet and did jack shit.
Instead impose tariffs and make building in the US mandatory.
> Instead impose tariffs and make building in the US mandatory.
I am always amazed at how people that repeat this bullshit seemingly have no idea how trade works, but are always very confident in their sheer ignorance.
Is SpaceX going to return the billions for the Artemis contract from missing their milestones? This is generally what happens with corporate welfare - the people getting the handout win contracts by over-promising the most and then under-deliver.
Turns out you don’t actually have to hit milestones on grants. The unfortunate reality is grants are typically unrealistic in the same way VC backed startups vastly overestimate their growth curve. In order to win the grant, you’re competing against other ideas. It’s easy to win grants with ideas that aren’t feasible because they sound better than ideas that are actually feasible. It enables incredible amounts of grift once you understand how to exploit the dynamics. Look up SBIR mills
I had the displeasure of submitting a few honest SBIRs at one point in time. Needless to say, they were rejected for not being ambitious enough. It is actually so bad that there is an inverse relationship between your ability to get an SBIR and your ability to produce a commercial product - startups who try and fail are statistically more likely to succeed in the market than startups who get an SBIR (even with the benefit of the money).
I’ve had the displeasure of working for companies that did get SBIRs and firmly believe you are correct that there is an inverse relationship on producing products. The machine knows how to get grants, and it does not care about delivering anything.
Do you have any references on this topic I can look into further? I find it difficult to articulate that particular behavior to management
Starship has been progressing relatively well because delays in these things are the norm, not the exception. A big issue is that the previous administration was weaponizing regulatory agencies against SpaceX to intentional delay launches.
It led to some amusing stories like this one. [1] SpaceX were required to prove that Starship wouldn't hit a shark when coming down in the ocean. So they asked if they could have the data on sharks, but the answer to that was no - apparently it was pseudo-classified for fear that shark fin hunters might get their hands on it. It all comes off as a comedy sketch, but it's real!
Artemis will never go anywhere, but it won't be because of SpaceX. SLS/Boeing play a key role, and the astronauts they barely managed to send up to the ISS like 9 months ago are still stranded there. By the time they're ready to fly SpaceX will certainly be fully capable of single-handedly delivering people to the Moon completely obsoleting the point of the big convoluted multi-company mission.
“ 3.3.4.1
Impact by Fallen Objects
Direct strikes by debris from Starship are extremely unlikely for all species of concern, fish, sea turtles, and marine mammals. This is due to the small size of the components as compared to the vast open ocean.
If debris from the vehicle struck an animal near the water's surface, the animal would be injured or killed.
As stated in the 2022 PEA, given the low frequency of the Starship/Super Heavy ocean descent and landing operations, and the fact that marine wildlife, marine mammals, and special status species spend the majority of their time submerged as opposed to on the surface, it is extremely unlikely they would be impacted. The relative occurrence of these animals at the ocean surface, spatially and temporally, combined with the low frequency of the Proposed Action, reduce the likelihood of impacts to extremely low. Additionally, there are no known interactions with any of these species after decades of similar rocket launches and reentries. Further, the projected landing areas for both Super Heavy and Starship are well offshore where density of marine species decreases compared to coastal environments and upwelling areas (FAA 2017).”
Pretty much every subsection of the report regarding risk to biological life ends on a similar note.
A quick search finds the environmental impact report that is the basis of this story: https://www.faa.gov/media/76836. To land a spacecraft in the ocean required a certification by the FAA. That certification required an environmental impact assessment.
Perhaps you prefer a world in which corporations can dump (even more) waste in the ocean?
It has nothing to do with waste. It's about species impact. And it's done completely maliciously. You're splashing down in a relatively random area that's tens of trillions (for the Indian Ocean alone) of square meters large. Advanced life density near the surface is going to be very close to zero.
That is immediately obvious to just about anybody with a decent head on their shoulders. But now actually proving that takes what almost certainly amounted to thousands (if not tens of thousands) of manhours followed by months of review, and adversarial engagement. It was the outright weaponization of government.
This, btw, is what leads to extremist viewpoints on regulation. Regulations, done in good faith, are a very good thing. But they can easily be weaponized both by the government against enemies of the state, and by other companies, in the case of regulatory capture, to prevent competition. And there is no entirely clear way to prevent these sort of abuses.
Boeing right now is in a terrible place. They have cost+ contracts for Orion and SLS - key components of the Artemis program. Cost+ means the government pays all of their costs and then gives them a fat chunk of profit on top. The problem for them is that when/if they ever deliver on those contracts, that's pretty much the end of them. They simply lack the technical capability to compete with SpaceX.
This means that so long as they keep working on the SLS and Orion, the money keeps rolling in. But if they ever succeed then their Golden Goose, of taxpayer money, dies. There was a recentish WSJ report suggesting that they are looking into spinning off/selling their space division, and it's probably related to this. Great legacy, but they seriously need a complete reboot in the present.
SpaceX by contrast is, more or less, in their prime. They're going to complete the project, not because of Artemis, but because they want to get people to the Moon as well as to Mars. It's just a part of their operational goals which they have been directly and working towards, with steady progress, for many years now.
The real question is whether the fabs will ever come, or if they will be “too little too late”. As a former resident of Columbus, I’m skeptical of the Ohio government and Intel’s ability to get a value-positive operation running here.
So much of the Ohio population is hostile to the very acts like CHIPS which are funding this project and Ohio infrastructure generally. I have that on account of a couple civil engineers in Ohio who are friends and family.
I don’t think it’s a coincidence that Intel announced the delay to the next presidential term.. The current administration is also hostile to the CHIPS act.. they’ve fired many of the administrators (the act is new enough that there were many probationary employers supporting it) and have told already-approved recipients that they are going to renegotiate the agreements. I’ve never seen such a self destructive administration..
Election in 2028, next president takes office in 2029, realistically 2030 is the earliest the CHIPS act and staff could be rebuilt.
The people overseeing the CHIPS act have mostly been fired or flagged for firing. Many of them were in their “probationary” period because they were recent hires.
The CHIPS act can’t be instantly restarted when the next president takes office. It has to be rebuilt. It has basically been sabotaged.
That's one of the most frustrating things about the wrecking ball far right administrations going through America and parts of Europe right now. They're causing damage that will take 5-10 years to fix, so even if we get more sane administrations, the public will complain "why aren't we seeing any improvements" because all they can accomplish at first is cleaning out the rubble.
Worst of all, it could become cycle. Trump / DOGE is basically doing a wholesale cleanse of left-leaning public sector employees at all levels, replacing them with yes men and cronies. A new administration will have to revert that, meaning firing and hiring and training people yet again. And an administration after that might try do undo that. What a quagmire.
In general it's a classic that left-leaning governments fix various policy and economic problems, which often carries big cost, which gets them voted out, and then the fruits of that labor are claimed by / wrongfully attributed to rightist administrations.
Meh, starve the beast is just another cliché of minds that want simple answers to complex issues. Life tariffs and Trump. He has no imagination. Anyway, government is the only thing that can stand up to the broligarchs and that's why Trump is doing is his best to destroy it. If you want a simple explanation for what's going on there it is.
Appreciate your concern and pedantry - the typo was saying presidential election instead of administration. Believe it or not, I do know when the next election is.
Kyle Benzle, your widely known infamous posting of "All women are whores" to Hacker News that you're desperately trying to white-wash wasn't a typo either. You fully meant what you said, you intentionally did it on purpose, you've never apologized or admitted you were wrong, it was an error in thinking and judgement, and prima facie evidence of your lack of experience with women who aren't whores.
>"All women are whores. Sorry to break it to you." -Kyle Benzel, Sept 28, 2022, Hacker News
What’s still totally unclear to me is how much money Intel has actually received. If they got all of the 7.9 B, then I would assume it doesn’t matter to them if the act is cancelled? But it’s not clear to me how much has actually been paid out so far.
There's absolutely no way they already have all the $7.9b. That's not how government contracts and accounting works. DOGE/Trump can just slice whatever remains of the rest of the contract and then they'll bicker at each other in court for a decade until nobody cares anymore.
It’s a definite concern but fortunately elections are largely administered by the states so there’s at least a buffer between centralized authoritarians and the voting process.. That being said, I’m sure this DOJ is going to get up to all sorts of shenanigans with whoever is nominated.
I think there are probably limits to that though.. when you control all branches of government and are making big splashy displays of firing tens of thousands of people and erecting big trade barriers - there really isn’t anyone else to (convincingly) blame.
Exactly. You tried your best but powerful shadow powers worked against you so you need even more power to fight them. And you know it may sound bad but things have to get worse before they get better. The population has to bear with you for just a bit more and you assure them you won't abuse any powers given to you, and if you do, it's because you were forced to.
It's election day, you get re-elected, rinse and repeat until the next generation has no memory of it ever being different.
That's going to be difficult after such a public media campaign giving people the idea that they're trying to crash the economy. Even if this will also take a lot of industry-level incompetence to achieve.
The spin seems the be that the recession is intentional in order to devalue the dollar and make American labor competitive with manufacturing hubs, bringing back domestic manufacturing capabilities.
And people actually buy that? Hey we're gonna make things worse for you so you can get worse paying manufactuer jobs compared to 2023. BTW we're cancelling all the new manufacturing initiatives.
Almost no one wins from this. Rich people suffer the least as usual by having a diverse banking account, especially in multiple currencies. All working class is devalued so the only boon is jobless people who manage to find a job.
Bad enough that some GOP senators wake up and actually impeach trump. Which may not be possible because being rich to begin with shields you from the effects of a recession. It may have to be a depression to force their hands.
They won't really be affected by it, and they feel they'll come out of shiny and silky because they will have grifted all that money and still be in control and the 99% will have learnt their place.
We certainly have our share of dumdums here in Ohio but I think the actual leadership is fairly reasonable, and they do really like $$ and wouldn't do anything to jeopardize investment.
Now, I am not sure how long we'll have "the old guard" type guys like dewine, so this comment might not age well!
> We certainly have our share of dumdums here in Ohio but I think the actual leadership is fairly reasonable, and they do really like $$ and wouldn't do anything to jeopardize investment.
Mike DeWine is governor.
On the Federal level, Ohio has Representative Jim Jordan and the current VP of the US, J.D. Vance.
How do you measure that “the actual leadership [of Ohio] is fairly reasonable”?
The republicans in Ohio will do what the republican in Washington are doing right now. Mark my words, whatever the King says goes, unless there is a national disaster or he has a complete dementia break down in public. Luckily, it's all built around his cult of personality and falls apart when he's no longer viable.
Mostly because “China bad” and “Biden bad”.. same thing happening in Michigan. There were organized protests to stop Chinese and Taiwanese companies from building billion dollar battery facilities in poor rural areas. Just the dumbest timeline.
What happens if the EU-USA relationship deteriorates to the point that EU doesn't sell lithography machines and other equipment to the US, doesn't accept imports made with chips from USA and requires these things be made in China, Korea or Japan?
The reason I'm curious about this is that in my understanding for a fab to become financially viable it needs to produce grotesque amount of chips.
Can America have state of the art fabs for a market of 340M people if the world becomes partitioned in the upcoming years? In Europe that was the main problem, people like to say that Europe lost on tech because of regulations but Europe lost on tech before EU become a thing, they simply didn't have a large enough local market for electronic components. Europeans got out of this market because it wasn't profitable, not because they couldn't figure out transistors etc.
ASML's EUV Lithography IP is provided on contract by LLNL, and much of that IP is owned and implemented by Cymer LLC, ASML's US subsidiary.
And it's individual nation states (in this case Netherlands) that can even make decisions on export controls, not the EU. In most cases, the Netherlands has largely been aligned with the US, and knows how to manage Trump thanks to Mark Rutte.
EU Member states zealously guard their sovereignty in defense/NatSec and foreign relations matters, so it's less a question about the EU and more a question about Netherlands/France/Germany/<insert EU state here>
> requires these things be made in China, Korea or Japan
Most of the supply chain is already dependent on Japan and Korea and has been for decades.
European players have largely been limited to legacy node fabrication chains because of the heavy focus on the automotive industry in Europe and the capital crunch during the Eurozone recession.
That said, there are a decent number of European suppliers (eg. Merck for chemicals, ASML for EUV Lithography, Zeiss for optics, etc).
I get that but just because they use licensed IP doesn't mean that they have to sell it to the USA.
>And it's individual nation states (in this case Netherlands) that makes this decision, not the EU.
That's the current state of affairs, it doesn't have to be the same in the upcoming months or years because "decades are happening in weeks" lately. The sovereignty stuff is what kept EU from becoming like USA but things are on move now. Check the approval ratings and trust of Europeans about EU and their local government and you'll see that Europeans tend to trust EU much more than the national government. EU is actually very popular with the general public, its the far-right and the far left that demonize it(they see it as an obstacle towards libertarian utopia or communism).
Also, what if they just don't care about the license or replace the licensed IP with something from Korea/Japan? What if they just clandestinely sell those to China?
> I get that but just because they use licensed IP doesn't mean that they have to sell it to the USA
If ASML loses access to the IP they cannot sell it in any market that respects IP laws, nor can it raise capital as it now has extremely legal liability. And if the Netherlands is ready to tear up it's IP laws, it's going to be de facto sanctioned by the US and the rest of the EU, because IP Law is one of the few things European nation states devolved to the EU.
Also, around 20% of ASML's headcount is in the US, and much of that is R&D and manufacturing specifically for EUV Lithography.
> The sovereignty stuff is what kept from EU becoming like USA but things are on move now. Check the approval ratings and trust of Europeans about EU and their local government and you'll see that Europeans tend to trust EU much more than the national government
The EU has a better reputation amongst the population, yet at the end of the day, no actual power aside from single market and norms alignment has been devolved to the EU.
As I have mentioned multiple times at this point, politicans and businesses do not want to reduce their power by handing it to the EU. It might be good for the EU member states at a macro level, but it creates a lot of losers at the national level. And those losers can vote for the AfD, RN, etc.
For example, for a unified European army, either France, Germany, or Sweden is going to have to sacrifice their aerospace giants because Dassault, Eurofighter, and Saab compete directly and ferociously, and always undercut each other. And for tanks, Germany has to either sacrifice the entire chain for Leopold or France has to sacrifice the entire chain for Leclerc.
All of these are tens of thousands of jobs in France, Germany, and Sweden, and no party wants to become toxic for a generation by become the party that sacrificed their voters with mass layoffs for the benefit of the EU as a whole.
Individual European nation states need to align, and they just are not because Defense, Foreign Relations, and Internal Security has always been the mandate of individual states.
> That's the current state of affairs, it doesn't have to be the same in the upcoming months or years because "decades are happening in weeks" lately
It definetly is, but not in a good way. The major EU states had an emergency conference after Vance's horrid comments at MSC to try and align on a boots on the ground policy in Ukraine, but it was shot down by Poland and Germany [0]
> For example, for a unified European army, either France, Germany, or Sweden is going to have to sacrifice their aerospace giants because Dassault, Eurofighter, and Saab compete directly and ferociously, and always undercut each other. And for tanks, Germany has to either sacrifice the entire chain for Leopold or France has to sacrifice the entire chain for Leclerc.
This is absolutely correct. That’s why the common EU military cannot be an EU equivalent of the U.S. military.
However, the EU itself is a novel and unique structure that was invented out of thin air. A common EU policy would also have to be a completely new model. One that’s closer to NATO but also has an actual common command with actual teeth that can call upon its French or German division to take certain steps that those divisions cannot refuse.
I agree. I think Macron's proposal for a tiered EU membership model might work as well - give some states the unified market and contracts enforcements, give other states that plus unified military posture under a single command, give other states almost complete devolution of powers to the EU
> that can call upon its French or German division to take certain steps that those divisions cannot refuse
A major additional issue is national constitutions as well. For example, Germany's constitution doesn't allow an expeditionary force outside of NATO territory, which pisses off France and Netherlands because they both have dependencies outside of NATO that face pressure from China (French Polynesia, Mayotte) and Venezuela (Dutch Antilles).
--------
And the question of Turkiye remains, becuase it's the only NATO state that has direct combat experience against Russian forces (Libya, Syria, Nagorno-Karabakh in 2016) and mass deployment.
Turkiye needs to be integrated as part of the EU's structure, otherwise the EU will continue to lack the heft needed to defend itself.
But Greece, France, and Cyprus will continue to veto Turkiye because of North Cyprus (Greece, Cyprus) and business+geopolitical conflicts (France)
Ironically, Germany has been quietly receptive to including Turkiye in the EU as German businesses and MICs are closely aligned with Turkiye.
>What happens if the EU-USA relationship deteriorates to the point that EU doesn't sell lithography machines and other equipment to the US, doesn't accept imports made with chips from USA and requires these things be made in China, Korea or Japan?
It has been posted here many times that the US started the EUV LLC to research EUV and allowed ASML to join. ASML doesn't hold all the cards. I doubt Americans are stupid enough to let ASML walk away with all the EUV IPs.
But this is not a card game, they can just build and ship these machines. IP and licenses are made up stuff to facilitate certain business transactions. You can just disregard those if you no longer care about those business ties. What USA will do? Send China DMCA complaint to tear down their ASML machines?
In this unrealistic worst case, shut down the ability for ASML to raise any sort of capital by litigating in just about every market, threaten $60B in Dutch exports to the US, and threaten felony status for much of ASML, Philips, and NXP's leadership. Oh and nationalize Cymer LLC, as the manufacturing and IP for ASML's EUV work is in ASML's US Subsidary (Cymer llc [0]), not the Dutch parent that's a spinoff of NXP and Philips
I'm not convinced that legal structures can do anything between hostile countries. If that was possible they could have just sue Russia and get the war sorted out.
IPs only matter when both countries agree that they matter.
In the eventuality that the US is seen as a foreign hostile country by EU members, which seems increasingly likely, those IPs do not need to be respected anymore.
Unless your argument is that "EU chimps cannot figure out how to do lithography thenselves". Then I'll have a very hard time to take your argument seriously.
What do you mean they don't have access? Maybe they kept copy of the technical documents and just keep building the machine and send them to China and not send them to USA?
National Labs are part of the US Defense apparatus and have massive compliance and firewalling requirements, and constant audits.
Any attempt by ASML Holdings to exfiltrate data and IP from Cymer LLC (a DoE contractor) opens ASML leadership to criminal charges, and makes them toxic in any deal.
It might not matter to you, but it absolutely puts the Dutch economy at risk.
And anyhow, all the manufacturing is done in San Diego and Livermore anyhow.
These things are important only at peacetime. Also, some parts being made in USA only means that they need to find a new supplier and if that doesn't exist then can help someone to figure it out.
USA is an important partner but nothing is more important than the wellbeing of the immediate neighboring countries because USA is actually a distant 5th trading partner for the Dutch with less than %5 of the trade, it is as about as important as Italy. You can't have prosperous Netherlands with struggling Europe.
The manufacturing for the EUV portions of EUV Lithography machines built and sold by ASML is done entirely in America (SoCal area) by an autonomous subsidiary (Cymer) that is a partnership with a National Lab. As a result, the Dutch portion has limited access to the intricacies.
I don't know why this isn't getting into your head.
> And anyhow, all the manufacturing is done in San Diego and Livermore anyhow
Could you define "all"?
From your comment it seems all stories about ASML having a quasi-monopoly in lithography machines are nonsense. So it's the US holding the chip cards? That makes the China vs Taiwan debacle even less important to the US, since there's nothing to worry about.
> ASML having a quasi-monopoly in lithography machines are nonsense
They absolutely do, and it's becuase the US chose to give it to ASML Holdings instead of Nikon due to antitrust concerns in the 2000s-early 2010s.
> Could you define "all"?
Lithography machines are complex and filled with several parts. The primary part that allows you to do light based lithography is the Light Source - a very advanced form of Laser. This is what Cymer manufactures and developed in conjunction with Lawrence Livermore National Labs. But technology in isolation is useless - it needs to be capitalized in order to be built and utilized. This is why LLNL brought ASML in as a private sector partner for Cymer.
> That makes the China vs Taiwan debacle even less important to the US
The "Taiwan Chips" aspect was always nonsense that was literally lobbied by Intel in 2019 to force TSMC to burn $20B building a factory in Arizona while giving Intel some breathing room to build a Foundary IDM.
Also, the intermediate parts for fabrication are largely manufactured in Japan and South Korea. There are a number of vendors in Taiwan now, but there is an ecosystem in the other two as well.
> less important to the US, since there's nothing to worry about.
Wrong. Taiwan is part of the first island chain. Without Taiwan, much of the US's Pacific seaboard becomes very difficult to defend, and leaves us open to a Pearl Harbor 2.0.
Even in 20th century, the only time the US ever lost land was to the Japanese when they invaded American Phillipines, portions of Alaska, and planned to invade Hawaii.
This is why you see horrible unseriousness about Ukraine by US admins. Ukraine is bad, but Taiwan is existential for the US, and why just about every US admin is much more worried about China compared to Russia.
No European nation other than France has the capacity to help us in the Pacific, so they may as well help load balance/burden share in Europe and MENA. It will make both North America and our European allies stronger.
China would be salivating at the prospect of getting these machines that EU can't/won't sell to the US.
I don't understand why Trump is so anxious to be buddies with Putin when Russia is aligned with China. It's feeling like an oligarch's world where under the table deals are what matters and the nationalist rhetoric is just a smoke screen.
At some point, we start to talk about military action.
It's not clear where the current US government will draw the line, and they would be crazy to draw the line at IP licensing... but well, I have some bad news.
I have absolutely no idea what is the Trump's (or Musk's, or whoever is calling the shots) endgame is. There is the chance that military action is inevitable. It's really bad either way.
It' really interesting to see how interconnected supply chains work.
Query: who are ASML's subsidiaries?
//
1. Cymer (Acquired in 2013)
A U.S.-based company specializing in EUV and DUV light sources. Cymer provides the laser-produced plasma (LPP) EUV sources used in ASML's EUV scanners.
2. Berliner Glas (Acquired in 2020)
A German company specializing in high-precision optical components. Helps ASML develop optical lenses and mirrors for lithography machines.
3. HMI (Hermes Microvision, Acquired in 2016)
A Taiwanese company focusing on e-beam inspection and metrology. Enables ASML to enhance defect detection in semiconductor manufacturing.
4. Carl Zeiss SMT (Strategic Partner, Not Owned)
ASML has a strategic partnership with Carl Zeiss SMT, which supplies high-precision optics and mirrors used in EUV systems. While ASML doesn’t own Carl Zeiss, it invested heavily in their R&D for EUV optics.
Yep! And ASML Holdings itself is a spinoff of NXP Semiconductors (primarily legacy nodes used in aerospace and automotive - VERY mission critical), which itself is a merger of the older Motorola Semiconductor division which landed us on the moon as well as Philips N.V.
One thing that will make the re-industrialization of the West fail is if it turns into a rural/flyover state development program.
Chinese manufacturing is efficient because of the tight supply chain integration and centralization that has emerged in the big cities of the Pearl River Delta Area.
The decades old dream to manufacture cutting edge chips in Europe has also repeatedly failed because it keeps being turned into job development programs in Eastern Germany.
Yup. The problem with democracies in the West is that they keep trying to make unsustainable places sustainable.
China essentially says “here’s where all the talent is and where the talent is willing to move to…let’s focus there”.
Because of policy reasons Texas, for example, has been able to kind of grow, but it would be much better if the likes of California and New York fixed their bad policies so they could grow instead, as the potential is much greater.
Except China isn't democratic and builds with such ferocity that completely overlooks quality and standards that us "westerners" expect or regulate -- hence, projects that appear more like potemkin villages than anything else.
The delays have nothing to do with it being in Ohio, and the CHIPS Act didn’t dictate where these would be built. Intel picked the site, just like TSMC and others picked theirs. Cost of land, energy, labor, etc all taken into account. The “flyover” states are the more cost effective place to do these things.
With Ohio specifically it’s being built just outside of a city too. Yes, we have those here. It’s actually not just one big state of a bunch of rural hicks demanding handouts from the government.
People in the US really have a hard time hearing this:
It's probably because TSMC is in China. They're across the straits from the world center of the electronics industry, instead of across the Pacific, and they can hire the sort of people who pay private tutors for their kids instead of the sort of people who refuse to wear facemasks in a pandemic of a deadly respiratory infection. TSMC executives in Arizona have been consistently amazed at the laziness and ignorance of the workforce there.
60 years ago the US had the human capital and industrial base to found Intel. Now it probably doesn't have the human capital and industrial base to sustain it.
TSMC is based out of Taiwan; China is West Taiwan. /joke
The narrative on "people who refuse to wear facemasks.." needs to be diffused if not wearing them for other reasons, eg: lessening the impact of particulate air pollution while commuting on a moped or, manufacturing not adequately maintaining their HEPA air filters during the "burn-in" test flow of server racks with fans pegged at 100%, 24/7.
Speaking of diffusion, what's with some of boxed retail processors with laser engravings on the heat spreader as being "Diffused in China"? Oh right -- TSMC and other foundries are not responsible for the entire chip manufacturing cycle.
Packaging began moving to China in the 2000s when Malaysia reached Mexico level salaries and costs, but it's returned to Malaysia (along with Thailand, Phillipines) after trade wars with South Korea and Japan happened.
Yes, as I said, the company is based in China. Maybe you're trying to say Taiwan isn't in China because it isn't governed by the CPC, which makes as much sense as saying Switzerland isn't in Europe because it isn't part of the EU. Even if it were correct, it's irrelevant to the advantages I'm talking about.
TSMC in Arizona is implementing fabrication processes brought to production readiness by the hard work and expertise of people at TSMC in China, which can draw on the whole Chinese electronics ecosystem that doesn't exist in the US anymore.
It has been in the news that Trump did or about to cancel Biden's Chips act. So without those funds there is no incentive for Intel to build the fab, especially with how unstable this admin is when it comes to policies. You do not know what will happen one day to the next.
I am sure we will see more of this, I thought I saw the company in Taiwan (forgot the name) is scaling down or maybe cancelling their fab in AZ. Probably for the same "real" reason as Intel.
I don’t know what news you’ve all been reading, but I don’t see anything about Trump cancelling the CHIPS Act. The 2 main things I’ve seen is trying to get TSMC to take over Intels manufacturing, and wanting to remove things like union labor requirements from the CHIPS Act.
I love how I Was downvoted last year when I pointed out their plans were unrealistic, Americans will keep being delusional over intel, it's a failing company that wasted 10 years with a monopoly in CPUs until AMD caught up, company leadership should completely change
1. Over time, profits will tend to decrease. The only way to sustain or increase profits is to cut costs or increase prices;
2. Executive compensation is tied to short-term profit making and/or (worse) the share price;
3. The above leads to eery aspect of a company becoming financialized. We put the accountants in charge of everything. If you look at pretty much any company (eg Boeing) you can trace back their downfall to an era of making short-term profit decisions;
4. Intel has spent ~$152 billion in share buybacks over the last 35 years [1]. Why they need any subsidies is beyond me;
5. We keep giving money to these companies without getting anything in return. We fund research. Pharma companies get to profit off that without giving anything back. We bail out banks after 2008. Why didn't we just nationalize failing those failing banks, restructure then sell (like any other bankruptcy)? We hand out subsidies with no strings attached. A lot of political hay is made out of "welfare" abuse. Well, the biggest form of welfare abuse is corporate welfare;
6. It is important to maintain a high corporate tax rate. Why? Because a low corporate tax rate means there is little to no cost to returning money to shareholders instead of investing in the business. You make $1 billion in profits. What do you do? If you invest it in the business, you get to spend $1 billion. If you pay a dividend or do a buyback, you get to give back $790 million (@ 21% corporate tax rate). Now imagine that corporate tax rate was 40% instead. It completely changes the decision-making process.
7. The Intel of 20 years ago was a fabrication behemoth that led the industry. It's crazy how far it's fallen and how it's unable to produce anything. It's been completely eclipsed by TSMC. Looking back, the decade long delays in 10nm should've set off alarm bells at many points along the way.
8. There is no downside to malfeasance by corporate executives. None. In a just world, every one of the Sacklers would die penniless in a prison cell.
> Now imagine that corporate tax rate was 40% instead. It completely changes the decision-making process.
Seems more like a question of degree. Dividends are also taxed as income so ~36% is already paid in tax depoending on the income of the shareholder. Increasing the corporate tax rate to 40% brings the effective tax rate to ~52%.
In my experience there's a more fundamental problem with large companies. In a small company, the best way to succeed as an individual (whatever position you have) is for the company as a whole to succeed. At a very large company, the best way to succeed is to be promoted up the ladder, whatever the cost. This effect is the worst at the levels just below the top: you have everything to lose and nothing to gain by the company being successful. It's far more effective to sabotage your peers and elevate yourself rather than work hard and increase the value of the company by a couple of percentage points.
The thing is, the people that have been there since the beginning still have the mindset of helping the company as a whole succeed, but after enough time and enough people have been rotated out, you're left with people at the top who only care about the politics. To them the company is simply a fixture - it existed before them and will continue to exist regardless of what they do.
You're alluding to the double taxation problem with dividends. This is a problem and has had a bunch of bad solutions (eg the passthrough tax break from 2017) when in fact the solution is incredibly simple.
In Australia, dividends come with what are called "franking credits". Imagine a company has a $1 billion profit and wants to pay that out as a dividend. The corporate tax rate is 30%. $700M is paid to shareholders. It comes wiht $300m (30%) in franking credits.
Let's say you own 1% of this company. When you do your taxes, you've made $10M in gross income (1% of $1B), been paid $7M and have $3M in tax credits. If your tax rate is 40% then you owe $4M on that $10M but you have already effectively paid $3M on that already.
The point is, the net tax rate on your $10M gross payout is still whatever your marginal tax rate is. There is no double taxaation.
That being said, dividends have largely fallen out of favor in favor of share buybacks. Some of those reasons are:
1. It's discretionary. Not every shareholders wants the income. Selling on the open market lets you choose if you want money or not;
2. Share buybacks are capital gains and generally enjoy lower tax rates than income;
3. Reducing the pool of available shares puts upward pressure on the share price; and
4. Double taxation of dividends.
There are some who demonize share buybacks specifically. I'm not one of them. It's simply a vehicle for returning money to shareholders, functionally very similar to dividends. My problem is doing either to the point of destroying the business.
On #6, that's an individual income tax (or capital gain tax, depends on how you define things). Corporate income tax is the one that is applied independently of the money being invested on the corporation or distributed.
I'm don't think you should subsidize reinvesting in huge companies anyway. What do you expect to gain from them becoming larger?
It's much better (for society) to let them send the money back to shareholders so they can invest on something else.
Reinvesting in the company is the one thing we should absolutely subsidize. That goes to wages, capital expenditure and other measures to sustain and grow the company.
Paying out dividends and doing share buybacks just strips the company for cash until there's nothing of value left. It's why entshittification is a thing.
Treating all wages as expenses seems fine to me. But have you noticed that large companies just stop growing at some point and it doesn't matter how much money you pour at them?
That is, unless they use the extra capital to buy legally-enforced monopolies, or bribe regulators out of their way.
And no, enshitification is a thing because people want those companies to grow and grow, and keep growing. Some times even after they have the majority of humanity as customers.
Good points but AFAIK bank loans from 2008 were paid back with interests, those were definitely not some free money. I would focus on root causes instead of populists shallow statements like that - too few regulations and oversight that allowed creation of securities that should never have existed in first place.
No industry will self-regulate, as you write the lure of short term bonuses for execs is too high and punishment for failures are non existent. I expect current US admin will make this even worse, greed and short term profit seems to be the only focus.
I'm all for root cause analysis. A big part of that is that large companies become extremely risk-tolerant because history has shown there is little to no downside to their actions. If the government always bails you out, what incentive is there to be prudent? You may as well fly close to the Sun and pay out big bonuses now. Insolvency is a "next quarter" problem.
I'm aware that TARP funds were repaid. Still, a bunch of that money went straight into bonuses [1]. Honestly, I'd rather the company be seized, restructured and sold.
You know who ends up making sacrifices to keep a company afloat? The labor force. After 2008, auto workers took voluntary pay cuts, gave up benefits and otherwise did what they could to keep the company afloat, benefits it took them ~15 years to fight to get back. In a just world, executive compensation would go down to $1 until such a time that labor sacrifices are repaid.
This delay makes me wonder if Intel is struggling more than we think. With TSMC expanding in Arizona (despite their own delays), and Nvidia dominating the AI chip market, can Intel afford to push back its U.S. expansion? If the CHIPS Act incentives aren't enough to keep them on schedule, what's the real bottleneck—funding, demand, or execution?
Before people jump onto talking about partisan politics, the big issue driving this right now is the fact that Intel is mulling splitting their foundary business from their chip design business and selling both off to outside parties [0]
The Intel fabs in Ohio were at the early stages, and would be a significant capex hit that could scuttle any M&A opportunities in the pipeline.
I have some serious doubts about these rumours. TSMC wants to buy Intel's fab why, exactly? Even assuming it isn't shut down for antitrust reasons, what are they gaining? A fab that is struggling to compete with the ones they already have? Lithography equipment they can just buy from ASML or whomever?
Not to mention the fact that the rumours themselves caused a rally in INTC price that makes acquisition far less attractive.
The US wants Taiwan to transfer even more technology to the US (thus actively undermining Taiwan's Silicon Shield defence strategy) and also revitalise Intel's operations under pain of 100% tariffs, which Trump has repeatedly threatened.
> Before people jump onto talking about partisan politics
It is not "partisan" politics, it is money politics. No money, no fab. Intel cannot commit to anything with a fluctuating future that changes each minute.
> Four sources with knowledge of the discussions told Reuters that the White House is concerned about many of the terms underpinning the $39 billion Chips and Science Act industry subsidies.
> Those encompass additional clauses, including requirements added into contracts by the administration of President Joe Biden, including that recipients must use unionized labor to build factories and help provide affordable childcare for factory workers.
I would just like to say that Broadcom owning Intel's chip design business and TSMC owning Intel's factories would be a horrendous outcome for the industry.
From a consolidation aspect absolutely, but from an IP aspect it would be indifferent. You're most likely using Broadcom designed chips already if you're using any 4G and above cell phone.
> I think another problem is that Broadcom is even more poorly managed than Intel
> We can look at VMWare as a direct example
What do you mean by that?
VMWare has legitimately been ill managed for years now, and absolutely needed the chainsaw treatment. They had too many SKUs and their AEs gave ridiculously discounted quotes to make quota.
There's a reason Apple uses Broadcom for cellular modems.
https://www.industryweek.com/semiconductors/article/55246295...
https://www.news5cleveland.com/news/politics/ohio-politics/o...
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