Comment by cuttothechase
13 hours ago
Genuine question-
How does Govt picking winners and losers going to help?
Intel is no Too big to fail Bank. Why save Intel of all chip manufacturers? Wouldnt it be like 25 years too late, with Intel and its heydays !?
Would Govt now ensure parity by investing in "marquee" entities across different industrial domains?
There is only 1 winner and 1 loser: Intel.
It's the only chip manufacturer "left" in the US. The argument is national security: the US expects China to invade Taiwan and this will kill TSMC in the process.
Whether this will happen or not can be debated, but this is what the government expects.
> It's the only chip manufacturer "left" in the US
Global Foundries, Micron, and Texas Instruments all come to mind
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 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
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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.
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.
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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.
> the US expects China to invade Taiwan and this will kill TSMC in the process.
Would it though? The TSMC foundries are pretty much in every continent. Are they just going to stop operating if this happens? Because that seems akin to killing a golden goose.
Also what is up with Global Foundries? I don’t hear a peep about them.
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.
GF is like a decade behind in research. Without years to ramp up and update their fabs they're not relevant.
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Global Foundries is on 12nm. TSMC is at 3.
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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.
Exactly. Expect to see some kind of additional intervention such as forcing a certain number of chips that currently go to TSMC to go to Intel.
This is my thought on it too. I don't think this is meant to be a political win so much as US intelligence views chip manufacturing extremely strategically. I also don't know about what will happen to TSMC. But the US has been pushing for US made GPUs as well. This goes back to Biden's admin as well.
https://www.tomshardware.com/tech-industry/us-govt-pushes-nv...
And the current administration is unlikely to help Taiwan in the event of said invasion.
If the argument was for protecting Intel, then the US government should be placing huge orders with Intel for solutions that will fund R&D and allow the company to regain its position as a foundry. They should be tapping into the defense budget. DARPA should be involved. This was an opportunity for petty extortion and a step towards socialism.
A large bulk of CPU orders comes from Google, Amazon, and Microsoft. Want to say 50% of all AMD revenue is datacenters, and the Hyperscalers represent the largest chunk of that.
Huge order for... what? DoD's needs for chips are quite modest in quantity. Truth is that the US Gov doesn't need the volume which requires Intel to keep afloat.
Government involvement is the fastest way to corrupt the purpose of an organization, hollow out its soul and quickly get rid of all the competant people. There's a reason that the DOGE findings made a laughing stock of government employees.
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Texas Instruments and Microchip: Am I a joke to you?
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.
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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
I see it different. The loser is the taxpayers. The loser is the market, which is less and less free. When there’s no incentive to run your company correctly… we get another company not run correctly.
How to run a company correctly?
so.. shouldn't US take stake in TSMC instead?
What good would that do if China invades Taiwan?
And now China knows the US expects this and it also knows the US does not expect to stop China, so China knows that it can expect the US to do very little. It's game theory turtles all the way down...
Edit: I think it's a misconception that China cares much about fabs in Taiwan. It wants unification.
It also means that China can expect the destruction of Taiwan's fabs to hurt the US less than China.
Combine that with the US's ability to unilaterally destroy Taiwan's fabs, and it sways the calculation a bit
The only charitable answer I could give is national security reasons for having domestic chip production, and even that could be accomplished in ways that don’t require the federal government having an ownership stake in Intel. For example, I don’t think the federal government has ownership stakes in Lockheed Martin and Northrop Grumman, despite those companies’ dependence on the military.
There’s a legal precedent that’s no doubt being abused. The Lima tank factory and Watervliet arsenal, for example are owned by the US government.
I don't expect a good reason given the history of this Administration, but a reason in my mind to save Intel is there's only 3 license holders for x86 CPUs. Intel, AMD (American), and VIA (Taiwanese). A dead Intel leaves a single American company that is able to make x86 processors, and a monopoly for actually good x86 CPUs. But somehow I suspect there's no logical reason for this besides lining the pockets of those in the Administration.
What is missing is that Intel has US based foundries and US based talent.
Why would the ISA matter to the government? I could see this being about Intel's physical manufacturing capabilities, but the ISA should be pretty irrelevant. Recompile what code you can, run the rest via qemu-user-static.
I hope this is not the reason. I think x86 is a deadend technology. ARM's energy superiority makes it a better choice. x86 only still being used due to legacy/backwards compatibility but thats changing. Apple moved completely away from x86. Theres more and more ARM based windows computers being sold. Theres no x86 chips in phones.
A dead Intel could open the door to have more then three license holders. Isn't Intel the reason there are only three license holders?
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.
What about Hygon?
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.
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While there are other good reasons to save Intel, if it went under, someone could still buy the license. I can’t imagine why anyone would want a license to x86 in 2025. It’s not like all of the companies designing custom chips are going to be falling over themselves to design use the x86 ISA.
You are asking why save Intel of all chip manufacturers, and the answer is because there aren't any other major chip manufacturers in the US.
AMD no longer has a fab. TSMC dominates the global market and basically has no competition.
In the event that Taiwan is invaded, the US would suddenly have a huge problem getting access to any kind of high end chips, be they CPUs or GPUs. This would be a major problem economically and militarily for the US.
Some caveats: Due to the chip act, TSMC does now have fabs Arizona, though I'm not sure what their capacity is. TI, and some others building lower end components also have fabs I believe. For x86, high end ARM, and GPU's, virtually all of that is manufactured by TSMC right now, mostly in Taiwan.
> TSMC does now have fabs Arizona, though I'm not sure what their capacity is.
180,000 wafers a year. Globally they do 17 million. They announced first profit yesterday.
They are the only US company that can produce cutting edge chips now and realistically within the next 15+ years. It doesn’t matter that TSMC produces chips in the US. That is nice for the short term but doesn’t do much for the US in the long term if TSMC falls under China’s influence.
Intel is in the midst of a dramatic turnaround and huge shift in strategy. It might fail. But if they succeed it puts Intel and the US in a much stronger position in terms of technology and military leadership.
It mattered for China to have Apple/Foxconn/etc assemble phones in China. By this same logic, won’t TSMC have more tacit knowledge to offer America than Intel, even if their independence is short-lived?
Why would TSMC or Taiwan want to give that information to the United States? There is a strategic reason why TSMC does not build their latest nodes and processes in the United States and why their R&D happens in Taiwan. They want / need The United States to protect Taiwan and their interests. It opens up strategic options for the United States if Intel or another US based company can produce cutting edge chips in the ballpark of TSMC.
This is a sure giveaway that the US military depends on Intel. It is the only major chip producer that has fabs in the US, and it is also the creator of the x86 architecture. That would mean that without Intel the military would become dependent on chips from Chinese Taiwan.
Not just the military, but the majority of consumer devices as well.
With Intel maintained, if China invades Taiwan and takes TSMC the US will still be able to make usable processors. They won't be the latest and greatest like TSMC, but they will be good enough. Maybe not the most powerful or efficient, but still rather close.
My only worry is this will mean management will start resting on their laurels and things will just continue to deteriorate. Or maybe the government can convince them to get rid of the bad management and start thinking more long term and less about immediate profits.
>This is a sure giveaway that the US military depends on Intel.
"Giveaway?" This isn't some secret, everyone knows the military depends on x86 processors, and having a company that can produce them domestically is a national security concern.
All I can think here is the government forcing back doors
(like the failed Clipper chip) https://en.m.wikipedia.org/wiki/Clipper_chip
The thinking might be the government needs a local industry for security. Think submarine manufacturing. Not a huge private market for that, but best to keep local so the supply can’t be cut off.
Though usually the government isn’t the best stewards of companies. When I worked for a large government contractor someone joked “yesterday’s technology tomorrow”. Some of that is for reliability, but it wasn’t cutting edge in a lot of ways.
This isn't a generalizable problem. There just aren't many companies that would be in a comparable situation to Intel.
Intel is:
* Critical to national security
* An advanced, industry that's extremely hard to spin up
* Essentially, one of two companies in it's industry.
Very few other companies meet all of those criteria.
What beats Boeing or Apple then so as to put Intel over the top of these guys?
Intel wanted the 9 billion in CHIP Act money that was being withheld and was willing to make a deal for 10% equity in order to get it.
Most of the answers are going to be national security. That is the reason used by third world countries to nationalise companies.
They supply components for the defense industry, where foreign production isn't a viable option. No one bank is more important than that. This is also why Micron is getting a free fab for strategic redundancy despite no clear reason why they would need 2x capacity after onshoring back to Boise.
Free market capitalism is great until you’re about to be the big Loser. And then the big dog steps in and yells for time out.
I think if this was a domestic thing it would be all kinds of dumb and wrong. But as a US National Security thing, it makes sense if you’re of the mind that significant intervention is fine when it’s in your country’s best interest.
The next phase is watching the U.S. government keep Intel on a palliative drip of softball contracts and tax dollars. I guess there’s a fair argument that this form of bail out could help Intel thrive again… or at least secure a domestic supply of chips for natsec reasons?
This government? Bribe them on the side.
I take that back. It's the old one you bribe on the side, this one you can bribe in the open.
What other US based chip manufacturers are there?
>Wouldnt it be like 25 years too late, with Intel and its heydays !?
wtf? what do you mean, they're like less than 1 year behind TSMC when it comes to leading node
(disclosure Intel Shareholder) I don't think they are one year behind. I think it is more than one year and for a long time they have not been closing in.
If they actually release Panther Lake on 18A this year, so one year to fix yield should be reasonable assumption, right?
> How does Govt picking winners and losers going to help?
By ensuring that the US retains at least the ability to manufacture second tier CPUs vs complete reliance on Asia? This doesn't seem unreasonable.
Achieving that doesn't need to take the form of a 10% stake in a flailing company.
Maybe Intel should have invested in the USA instead of Israel.
The US can't employ poverty-tier labor to enable competitive margins, though. American businesses and global trade partners already largely reject Intel's foundry services.
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.
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.
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Haven’t you read Curtis Yarvin’s vision for America? Our leaders, VCs, and owners have
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x86
Because Dump personally pictures being able to instruct all personal computers to "dont do woke"
The end result is more like all the rich people take their cash and jump off the top of the pyramid as it crumbles
Yeah why not fund a new foundry startup?
It would take a decade and hundreds of billions of dollars with no guarantee it would work.
It's a terrible idea
That's extremely risky, like 100 to 1.
Sure tough business but, risky compared to what? Intel?
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If you think getting a couple million dollars of funding and expecting to show profitability in a few years is hard, just wait till you try it with billions and 5+ years.