Intel to Receive $8.5B in Grants to Build Chip Plants

https://www.nytimes.com/2024/03/20/us/politics/chips-act-grant-intel.html

by ece20 • 2 years ago

342 590 2 years ago

nytimes.com

hiddencost• 2 years ago

https://archive.is/XkIJs

OJFord• 2 years ago

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.)

rapsey3• 2 years ago

Intel has a monopoly?

hx83• 2 years ago

Due to the licensing agreements Intel and AMD have a duopoly on all modern x86 chips.

hx83• 2 years ago

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.

nahnahno2• 2 years ago

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• 2 years ago

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• 2 years ago

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.

bluSCALE43• 2 years ago

Absolutely. This is why Intel is basically nationalized and no different than an American Huawei.

chomp• 2 years ago

So when can we expect 8.5 billion in stock buybacks?

supertrope• 2 years ago

https://web.archive.org/web/20220812015804/https://semianaly...

barryrandall• 2 years ago

November 6, 2024.

a_wild_dandan• 2 years ago

Help me understand.

testhest• 2 years ago

I thought fabs require massive amounts of water to function, isn't AZ a pretty dry state?

alephnerd• 2 years ago

Water is reused.

Wafers have purity requirements so you'd be stupid to not recycle and re-purify the water used.

lizknope• 2 years ago

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...

ejb9995• 2 years ago

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• 2 years ago

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• 2 years ago

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).

aylmao6• 2 years ago

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.

Workaccount23• 2 years ago

It would extremely difficult to make an educated case that having domestic cutting edge semiconductor manufacturing ability is a "waste of money".

ejb9995• 2 years ago

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.

rockostrich3• 2 years ago

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.

ejb9995• 2 years ago

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?

humansareok12• 2 years ago

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!

ejb9995• 2 years ago

you mean other than the rampant inflation we are seeing now - and will almost certainly get worse - everything is fine?

light_hue_12• 2 years ago

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?

ejb9995• 2 years ago

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.

consumer4512• 2 years ago

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• 2 years ago

Stock-buy backs are basically just dividends with a better tax treatment.

kortilla3• 2 years ago

Buybacks and dividends are the same thing. Money leaves the company to go to shareholders. Neither is better/worse for R&D.

BeetleB6• 2 years ago

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_12• 2 years ago

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

shortsunblack• 2 years ago

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.

dyingkneepad• 2 years ago

I think since Pat Gelsinger took over as the CEO, no stock buybacks were made.

teleforce• 2 years ago

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• 2 years ago

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.

Workaccount23• 2 years ago

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• 2 years ago

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• 2 years ago

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

nickpsecurity2• 2 years ago

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.

jdblair2• 2 years ago

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.

bluSCALE43• 2 years ago

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• 2 years ago

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• 2 years ago

Yes. I too miss when wintel ruled the day … the music was better too.

bluSCALE43• 2 years ago

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.

unyttigfjelltol3• 2 years ago

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...

mortify2• 2 years ago

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.

orangecat2• 2 years ago

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.

yard20103• 2 years ago

China has their plan up to 2049. I doubt that something that other nations would do change it.

thedangler• 2 years ago

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....

kortilla3• 2 years ago

This doesn’t move the needle for intel, their stock price is barely up as of an hour after market open.

ChrisArchitect2• 2 years ago

[dupe]

Some more discussion: https://news.ycombinator.com/item?id=39764821

derelicta2• 2 years ago

Can't you guys just nationalize Intel instead of giving your hard earned money to oligarchs?

callalex• 2 years ago

That would make it much harder for all this money to be pilfered away through stock buybacks, which is the real goal here.

s1artibartfast16• 2 years ago

Which oligarchs own Intel?

derelicta2• 2 years ago

Western ones. They are the worst.

rgrieselhuber• 2 years ago

I had heard that this had been killed. Is it back on?

macksd2• 2 years ago

This is an official announcement from the Department of Commerce that was made this morning.

mikeyouse• 2 years ago

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• 2 years ago

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?

nahnahno2• 2 years ago

The money afaik has to be used for actual manufacturing activities.

redleggedfrog• 2 years ago

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.

346792• 2 years ago

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• 2 years ago

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.

bhhaskin2• 2 years ago

This isn't really a startup kinda business. It costs something like $10b to build a new fab.

uptownfunk• 2 years ago

Isn’t that what they said about rockets?

mrd3v0• 2 years ago

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.

346792• 2 years ago

That's where the innovation comes in.

lupusreal3• 2 years ago

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• 2 years ago

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• 2 years ago

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_wizard2• 2 years ago

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

Salgat2• 2 years ago

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.

aylmao6• 2 years ago

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...

pbiggar2• 2 years ago

Imagine announcing you're going to build a plant in Israel in the middle of Israel committing a genocide of the Palestinians in Gaza. Evil company

https://bdsmovement.net/Press-Release-BDS-Launches-Boycott-I...

Qem• 2 years ago

apartheid aboard is the new intel inside. They will need updated stickers.

snapcaster2• 2 years ago

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• 2 years ago

Samsung? Really?

Spivak• 2 years ago

I mean they're a company from a strongly allied nation who operates 13 fabs, why not?

resource_waste3• 2 years ago

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• 2 years ago

I am totally ignorant, can you explain more about Samsung's negative externalities?

snapcaster2• 2 years ago

Yeah will fully cop to being ignorant on this, can you expand your comment?

minhazm• 2 years ago

Samsung is expected to get $6 billion.

https://www.bloomberg.com/news/articles/2024-03-15/samsung-p...

zerreh50• 2 years ago

Both TSMC and Samsung are expanding in the USA and are expected to receive significant subsidies as well

dotnet003• 2 years ago

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• 2 years ago

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.

aylmao6• 2 years ago

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.

icyfox3• 2 years ago

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_waste3• 2 years ago

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.

lupusreal3• 2 years ago

Top down planning is the only way projects requiring massive capital investment get done. There's no such thing as grassroots fabs.

autoexecbat2• 2 years ago

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• 2 years ago

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.

Aloisius5• 2 years ago

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• 2 years ago

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• 2 years ago

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.

lenerdenator4• 2 years ago

Who would the competition be between?

RandomWorker• 2 years ago

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.

spaniard892772• 2 years ago

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.

nyokodo3• 2 years ago

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• 2 years ago

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.

zer00eyz• 2 years ago

> 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.

whimsicalism3• 2 years ago

Globalization is breaking down because of actions being led by the US. It is not some inevitable process that we have to pre-empt, rather it is actively precipitated by our actions.

contrarian12346• 2 years ago

"because East Asia devolves into a war stricken basket case"

The past decade of American media has been promoting this new cold war narrative as if there is inevitably going to be a major war with China.

If there is war in East Asia then the whole international economic system will collapse, people will be starving in the streets. That's if it's not a nuclear Armageddon and we're left to rubbing two sticks together. Nobody will care about chips if there is a war. That will be really far down the list of actual concerns

The world is so interconnected and everyone depends on everyone so much that there is basically no point in planning for this scenario

happytiger2• 2 years ago

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.

icyfox3• 2 years ago

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

hollywood_court• 2 years ago

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.

sfilmeyer2• 2 years ago

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.

icyfox3• 2 years ago

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.

autoexecbat2• 2 years ago

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.

bumby2• 2 years ago

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.

specialist• 2 years ago

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.)

s3p2• 2 years ago

Intel pays its employees very well. They also have generous vacation allotments, and paid sabbaticals every 4 years.

pondemic• 2 years ago

Hope you’ll excuse the somewhat off-topic nature of my comment: I’d be curious in hearing your story how you transitioned into software development from construction - would you mind passing along contact information or reaching out to me? I’m in a similar boat and thinking long and hard about my options!

eitally3• 2 years ago

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.

count2• 2 years ago

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.

Leary2• 2 years ago

What's the most advanced node Intel is producing in the US right now in mass production?

neogodless2• 2 years ago

https://siliconangle.com/2023/09/29/intel-begins-mass-produc...

I believe "Intel 4" is their current most advanced mass-produced process.

Leary2• 2 years ago

Thanks for the response. The article only mentions Ireland though, has Intel done the same in the US?

beefman• 2 years ago

If Intel got $8.5B how come the stock didn't go up?

https://finance.yahoo.com/quote/INTC/

kqr2• 2 years ago

That government money was probably already factored into the stock price.

doctoboggan• 2 years ago

Because everyone was expecting this to happen when the CHIPS act passed.

DSingularity• 2 years ago

It’s been priced in. Many indications that this was coming.

Salgat2• 2 years ago

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• 2 years ago

These (and probably all) are growth stocks. They have no relationships to the real world anymore unfortunately.

jjtheblunt3• 2 years ago

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_wizard2• 2 years ago

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• 2 years ago

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• 2 years ago

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.

dotnet003• 2 years ago

Intel has also been opening up their fabs to other customers in the past few months.

Symmetry• 2 years ago

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• 2 years ago

I think Intel wants to make chips for others as well...

Aromasin2• 2 years ago

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• 2 years ago

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.

BeetleB6• 2 years ago

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.

s1artibartfast16• 2 years ago

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.

randerson3• 2 years ago

Intel could have funded this themselves many times over if they'd reinvested their profits instead of paying huge buybacks and dividends.

lenerdenator4• 2 years ago

The goal of a corporation is to generate value for shareholders, and we don't give any incentives for them to do otherwise.

gamepsys4• 2 years ago

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

btbuildem3• 2 years ago

I ask again, who are these "shareholders" and why do we continue to play along with this monumental scam?

tgma3• 2 years ago

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.

randerson3• 2 years ago

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?

stock_toaster• 2 years ago

I'm fine with dividends, but less ok with stock buybacks. I feel like buybacks lead to perverse incentives and even _greater_ levels of short-term thinking.

demondemidi6• 2 years ago

They DID reinvest.

Intel built D1X and it took forever to get working and even longer to become profitable (if it even is yet). It was a 10 year 10 billion dollar project.

D1X was like their entire capex budget.

They just flew too close to the sun and imploded with too many technical challenges.

verisimi• 2 years ago

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• 2 years ago

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• 2 years ago

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• 2 years ago

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.

eitally3• 2 years ago

100% this.

maerF0x04• 2 years ago

Taiwanese PhDs, engineers, and technicians to come to the US

Isn't this already present in H1B and other Skilled / extraordinary persons programs?

FpUser2• 2 years ago

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.

FpUser2• 2 years ago

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.

BeetleB6• 2 years ago

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.

FredPret6• 2 years ago

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• 2 years ago

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.

FredPret6• 2 years ago

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.

Guthur• 2 years ago

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• 2 years ago

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• 2 years ago

No shock that profits are failing when they are investing heavily

FredPret6• 2 years ago

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.

metaphor3• 2 years ago

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• 2 years ago

Then let's look at TSMC: https://valustox.com/TSM

FredPret6• 2 years ago

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.

jp422• 2 years ago

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.

FredPret6• 2 years ago

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• 2 years ago

I don’t think twitter is a really good example considering its equity value has fallen precipitously under his reign.

UncleOxidant2• 2 years ago

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.

jasonwatkinspdx2• 2 years ago

They need to do some variation of what Elon did to twitter.

What nonsense. Since Elon's purge Twitter has had and endless number of persistent issues that frankly are amature hour level bugs.

He filtered developers by demanding they bring a printout of source code and explain it to him, when it's clear if you've ever seen him talk in detail about software he actually understands almost nothing about the process and details of writing code. This is both an ineffective and unfair way of deciding whether or not to fire someone.

He also lost about half of Twitter's advertisers in a matter of weeks.

I believe in fairness and honesty, so I will say Elon is exceptional at selling investors and customers on a technological vision. Saying his mindset and approach would have made Intel far more successful in recent decades is preposterous.

supportengineer• 2 years ago

> dog's breakfast

Native English speaker here, I've never heard this expression before?

slavik81• 2 years ago

It's an idiom meaning an unappealing mixture or a disorderly situation. https://en.wiktionary.org/wiki/dog%27s_breakfast

agd• 2 years ago

Not sure about elsewhere, but it’s a common expression in the UK.

jasonwatkinspdx2• 2 years ago

A lot of places and definitely historically whatever scraps were left from dinner would be the dog's breakfast bowl tomorrow.

tacocataco2• 2 years ago

Dogs get whatever is left over.

switch007• 2 years ago

I think dog’s dinner is way more common in the UK

dietmtnview2• 2 years ago

It blows my mind how much these large firms have totally dropped the ball. It's like IBM levels of decline.

mlsu• 2 years ago

Only one of the companies you listed makes chips.

madaxe_again• 2 years ago

Why worry about revenue and profits or sustainability when the government will just bail you out?

May as well just loot the coffers, pay seven figure bonuses, and then go back cap in hand to the taxpayer.

And we call this “capitalism”.

__lbracket__• 2 years ago

nah, semiconductor design, fab and research would still pay like shit. Go back to building your CRUD apps.

rhelz21• 2 years ago

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• 2 years ago

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• 2 years ago

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.

II2II• 2 years ago

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.)

eitally3• 2 years ago

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.

curiousllama3• 2 years ago

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.

0xEF• 2 years ago

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?

nonethewiser2• 2 years ago

I think people are also underestimating the intelligence of people in the once very large manufacturing workforce.

znpy2• 2 years ago

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)

laborcontract• 2 years ago

You're missing the broader point here which is that TSMC pays roughly $50k/year for people with these skills. Sure, you may be able to find the talent pool, but at what price?

1-6• 2 years ago

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• 2 years ago

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.

chiefalchemist4• 2 years ago

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.

faktory3• 2 years ago

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.

okasaki• 2 years ago

under governments who are not close allies.

I wonder why...

ulfw2• 2 years ago

What governments that aren't your allies?

Chips are produced in Taiwan, in Korea, in Japan. In that order. Which of those governments is not allied with the US of A?

UncleOxidant2• 2 years ago

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• 2 years ago

Intel became the biggest sponsor of EE H1Bs in this time frame. They were trading competent citizens for compliant serfs.

Raydovsky• 2 years ago

IIRC The original chips act had a provision that companies would have to train and hire X% of non-white/non-asian engineers.

gen2208• 2 years ago

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.

gentleman11• 2 years ago

How long until all those new workers are laid off again as intel goes back to overseas fabs?

WWLink• 2 years ago

Honestly it blows my mind they were able to give control of one of the most important industries in the world over to a foreign country like that.

postpawl• 2 years ago

nice job, if you can get it

TSMC is paying around $23/hour to manufacturing technicians in Arizona. They’re also sending people to Taiwan to get trained and apparently it’s brutal enough that most people drop out of the program.

Asianometry did a video on this recently: https://youtu.be/Nk-lBok9_TU

typ• 2 years ago

It's wasn't just the semi-conductor manufacturers either.

The PRC had the supply chain from the bottom up (to some extent funded by the western consumers and corporations), whereas the US is trying to get reindustrializd from the top down, without first building a solid fundamental. To make the tough jobs easy, you must have the easy jobs done well first.

anonuser1234563• 2 years ago

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.

How about asking the workers in other countries who benefitted from this transaction if they were happy with the arrangement? Or do only Americans matter? Maybe you think foreigners are fit only to till dirt fields as subsistence farmers?

creato3• 2 years ago

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.

This doesn't make sense, Intel did and still does most of its manufacturing in the US, didn't it? (See: https://en.wikipedia.org/wiki/List_of_Intel_manufacturing_si...) I assume the thing that changed if there was a major loss of jobs was automation, not outsourcing. It's a lot easier to keep a clean room clean if you don't need to let people (with their hair and dead skin particles) in.

_heimdall18• 2 years ago

Now, the taxpayer has to pay Intel $8.5B to bring back manufacturing capacity to the U.S

The tax payer had nothing to do with it. This is yet another example of the government taking our money (or borrowing our future money) and spending it in ways that we never agreed to and had no input on.

demondemidi6• 2 years ago

Well, I was there in the late 90's and don't recall that anecdote. Most of the people in the fab shuttle the lots from station to station. Some even look at porn and get high while waiting (that's my anecdote, clean room alarms went bananas when he lit up). And robots that zip around the ceiling and drop down in dangerous areas do the rest.

Mind citing your anecdote? I realize I wasn't in every fab, but it's not rocket science, even on 300mm and beyond.

rhelz21• 2 years ago

chuckle Asking for further justification is always fair play, and I don't mind being checked....but I'm kind of a loss as to what to cite. It wasn't something I read in a book, it was lived experience.

But, I mean when you say:

clean room alarms went bananas when he lit up

you might have answered your own question...that stuff may have flied when we were at 180 nanometers, but lets face it, there's only so far down the road of Moore's law you can travel with people who smoke in a clean room...

imgabe• 2 years ago

You should hire the very smart people to figure out how to make the jobs doable for average people. Surely there must be a way to configure line work to not require a PhD...

rhelz21• 2 years ago

Anything which doesn't require a Ph.D. in solid-state physics to do must be automated, because only machines can handle/manipulate/transport the wafers with enough precision not to damage them.

joncrane• 2 years ago

Intel had to fire most line workers in their FABS, and hire people with Ph.D.'s in solid-state physics

Why did Intel HAVE to fire most line workers and hire Ph.Ds?

rhelz21• 2 years ago

Well, even back in my grandfather's day (he was a millwright for Ford) working on the line required more mental skills than most people realized. Remember when Elon Musk finally gave up trying to 100% automate his factories? He said "we undervalued the abilities of humans."

If manufacturing cars is so complex you can't train monkeys, or build robots, to do it, how much harder must it be to make chips?

Making things that small, that precisely, repeatably, profitably, by the millions and billions, is spectacularly complex. And with each process node, the complexity grows even faster than Moore's law does.

Eventually, it gets to the point that even to tell somebody how to do something, you need to do it using the language of advanced physics, the kind of physics which requires you to spend studying 60-80 hours a week, for 5-7 years in grad school to learn. As the gen-X proverb goes, reality bites.

Spooky233• 2 years ago

Hardware people get boned.

I worked at a non-semiconductor tenant company in a semiconductor research campus/facility.

Parking lots tell the story. There was a pecking order for the lots, which made it easy to classify. The best off working people were the trades guys. The plumbers and electricians were high-skilled and well paid. Like guys commuting 2,000 miles and buying a second $90k F-250 to drive around town in.

The bigshots were Teslas, BMWs, big SUVs. There were a few corvettes and a Ferrari.

The Fab engineers and workers were all driving old Hondas and Hyundais.

One of my good friends from high school was a mechanical engineer at IBM and a master at some super-critical process for mainframes. They moved to a different architecture and his entire team was just nuked from orbit before they even knew what was happening. He was selling real estate for awhile and eventually got back into engineering.

fireflash38• 2 years ago

I don't think you can draw conclusions from that, considering you have absolutely no idea who is in massive debt for those vehicles. Especially with tradesfolk because the vehicle is a business expense.

anonuser1234563• 2 years ago

I work at a hardware company. Our parking lot looks like a Tesla, Rivian and Mazarati dealership.

davidgay• 2 years ago

There's something off in this thread, which seems to posit that all of this is about Intel moving fab capacity back to the US and away from unreliable places.

That is clearly not the reality: according to https://en.wikipedia.org/wiki/List_of_Intel_manufacturing_si..., 16 of 23 of Intel's fabs are in the US and 6 of the other 7 are in close allies (Ireland, Israel, Germany).

There may be something to be said about what's happened to the rest of the US fab industry, though.

jjtheblunt3• 2 years ago

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• 2 years ago

Oh good, another bunch of board members can now afford their yacht club memberships for 2024.

These handouts need to stop.

lenerdenator4• 2 years ago

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.

aylmao6• 2 years ago

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?

mortify2• 2 years ago

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.

dns_snek• 2 years ago

The actual alternative would be to publicly admit the failure of very loosely regulated free markets and regulate the chip industry instead, but apparently the charade must be kept alive at all costs (to the taxpayers).

The market chose wrong.

Oh no, the market chose right, but what the "market" wants doesn't align with what the nation requires.

demondemidi6• 2 years ago

Gelsinger is a weird dude. He had the Pope bless a wafer for good luck on a fab.

ChrisArchitect2• 2 years ago

More discussion: https://news.ycombinator.com/item?id=39764821

WhereIsTheTruth• 2 years ago

Capitalism 101, get tax payer money to fund your big projects!

TradingPlaces• 2 years ago

Now all they have to do is compete with TSM, which is widely known to be a very simple thing.

maerF0x04• 2 years ago

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• 2 years ago

“fair game” : are you certain tsmc has not received handouts from their government

maerF0x04• 2 years ago

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?

tester7562• 2 years ago

This was happening all the time in semiconductor industry

consider reading Chip War

roody15• 2 years ago

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• 2 years ago

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• 2 years ago

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.

aylmao6• 2 years ago

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• 2 years ago

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.

dietmtnview2• 2 years ago

As a US citizen, it's pretty wild to live through. Socialism for the rich, rugged individualism for the rest of us.

Nifty39292• 2 years ago

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.

tester7562• 2 years ago

Consider reading Chip War then

locallost• 2 years ago

Unfortunately a lot of that influence was done with the exact purpose of handing the markets to the US companies. I am not anti market and there are definitely good arguments in its favor (e.g. a better cheaper product even if imported will allow you to invest the money in something else) but it's a delicate topic and in reality almost no country operates like this.

Also even free market proponents draw the line somewhere. They will always advocate privatising healthcare but never the police or the army. Somehow it's important that keeping people healthy is economical and efficient, but not upholding the law.

faktory3• 2 years ago

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.

Nifty39292• 2 years ago

$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.

tgma3• 2 years ago

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• 2 years ago

planned economies only enrich the planners

xyst2• 2 years ago

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”.

JonChesterfield3• 2 years ago

Nah, this is intel. They'll spend it on a dividend.

dheera2• 2 years ago

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.

demondemidi6• 2 years ago

More likely a stock buyback.

swarnie• 2 years ago

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• 2 years ago

Call me hopeful and sceptical that you can do this in the USA. The employees are just ganna flip jobs

stalfosknight• 2 years ago

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• 2 years ago

I hope these have stringent, result based conditions applied to them.

elihu• 2 years ago

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.

alex_young• 2 years ago

http://web.archive.org/web/20240320153008/https://www.nytime...

pbiggar2• 2 years ago

Meanwhile, BDS just announced a boycott of Intel

“Ethical responsibility and international law aside, by insisting on investing tens of billions of dollars in Israel, a ‘war zone,’ only miles away from occupied Gaza, Intel is putting its leaders’ fanatic ideological commitment to Israel over financial and fiduciary responsibility. Why else would Intel freeze plans to expand its chipmaking manufacturing in Ohio while throwing those billions into Israel, a state committing genocide?

https://bdsmovement.net/Press-Release-BDS-Launches-Boycott-I...

machinekob• 2 years ago

lol who cares about that? they can boycott like 95% of US big corporations cause all of them do business in Isreal

osigurdson• 2 years ago

I guess the trick is to convince governments that your industry is vital for national security.

BobbyTables23• 2 years ago

I think HPE spent about this much for Autonomy!

Just imagine if they had invested in domestic semiconductor manufacturing instead of a shady analytics company!!!

whatshisface• 2 years ago

Does the government get shares as a result of this, or is this investment a gift? Are they really just handing money to a giant corporation?

SmellTheGlove2• 2 years ago

So Intel will be buying back $8.5B of its own stock starting when?

ufocia4• 2 years ago

I've noticed a trend of pay-walled articles lately on HN. Nothing wrong with journalists being paid, but I'm beginning to think that they are self-promoting rather than bubbling up organically.

synergy20• 2 years ago

We spent trillions on the war not so long ago, who knows how many billions just spent in Europe, and hundreds of billions on various programs that do not really produce anything, so when I saw numbers like $8.5B from the government these days it's like nothing to me, why is this even a headline? I just can not make sense of it myself anymore.

perryizgr8• 2 years ago

Why does Intel need grants to invest into expanding their own business? They have more than enough cash. Just a way to waste taxpayer dollars IMO.

nojvek• 2 years ago

I liked that US govt approved the Chips ACT, but I'm skeptic whether that will actually meaningfully change the manufacturing ability in-house.

The problem with US corporations is they are run by MBA management who are experts in stock price manipulation instead of manufacturing and engineering. So you could spend 100s of Billions and they don't materialize into much.

We see the same troubles at Boeing.

US has over-optimized for finance shenanigans at the cost of hard engineering.

SpaceX is perhaps something that truly stands out in terms of radical engineering mindset. If the same funding was applied to NASA they wouldn't have achieved a 10th of what SpaceX did.

Some corporations are just very inefficient. Intel being one of them.

I am for public funds being invested into companies only if they meet certain milestones, and new funding is only done if previous milestones are met.

Otherwise it goes from tax payers to some exec's pocket.

sargun• 2 years ago

I think that this will be a good case study in the future of whether or not you can de-MBA an organization.

I can’t remember too many cases of organizations fixing themselves in this context. Microsoft is the largest example I can think of.

oglop• 2 years ago

Cool. So, where you getting that labor you smothered out for shareholder value all those years ago? I both hate this but support this. I hate it because no one will learn their lesson and Chicago economics will go on being a theory from autists imposed on the rest of us with constant “externality” costs. Supportive because any fool not indoctrinated into the Chicago school could have seen what happens on a long enough timeline in such a fragile situation and this technology will make or break a nation in the current zeitgeist.

typon• 2 years ago

Good to see capitalism and the free market are alive and well in the US.

Intel to Receive $8.5B in Grants to Build Chip Plants

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