[srvo]

The problem here isn't that the government gets involved in businesses. That has always been something they do.

The problem is that these days they do it capriciously, without any sort of plan or intention.

The government played a foundational role in supporting the early stage research that enabled companies like Intel to emerge. Underwriting that sort of long-term investment that wouldn't easily attract commercial capital is a great place for them to be.

Meanwhile, is it even the case that the American chip industry is declining? Apple, Nvidia, and Google all have significant chip manufacturing operations. And this isn't an industry I even follow particularly closesly.

[xethos]

> Apple, Nvidia, and Google all have significant chip manufacturing operations

No, they all (as well as AMD) all have significant chip designing operations. Not one of them can actually fabricate their own chips. Every single one of them must speak to TSMC or Samsung if they want to take their designs from the whiteboard to the physical world.

[srvo]

Thanks for clarifying! I misspoke there, but from my standpoint (portfolio manager/equities investor) that's better.

Wafer fabs are capital intensive, complex, and need constant retooling. The bulk of the commercial value lives in the stuff you do on your whiteboard.

From a geopolitical standpoint, I'll concede there's value in having the ability to actually make the stuff without acceding to the duopoly. But I'd still rather see the capital invested in basic research which might change the capital dynamics of the industry in the intermediate to long term.

[disgruntledphd2]

> Thanks for clarifying! I misspoke there, but from my standpoint (portfolio manager/equities investor) that's better.

From a national security point it really, really isn't. Like, I'm not a fan of the Trump administration, but having basically all chip manufacturing in Asia is not a good idea if you think there'll be a war with China in the next few decades.

[altcognito]

Another commenter already noted the CHIPS[1] act, which was a deliberate act to try and specifically bring fundamental high value chip manufacturing and science to the United States.

It is extremely relevant to this conversation. Regardless of whether you think China engages in a war with Taiwan, it is a crucial resource the US will want developed locally (similar to any critical resource like farming, steel, or rare earth metals).

CHIPs seemed more well thought out than simply taking control of 10% of Intel.

[1] - https://en.wikipedia.org/wiki/CHIPS_and_Science_Act

[LeafItAlone]

>but having basically all chip manufacturing in Asia is not a good idea if you think there'll be a war with China in the next few decades.

I see this a lot, but I’m not smart enough to understand it.

The US still has immense military power. Is the suggestion China/Asian is going to make the US so desperate for lack of chips that they use this power? Whether the manufacturing plants exist in Texas or Taiwan, the US military basically ensures they exist. And if that supply is cut off and that is forecasted to be the turning point of a war, then with a figurative push of a button, the US military makes sure that other countries also don’t have chip manufacturers (i.e. blows them up). Similarly, other countries can target plants on US soil if war breaks out anyways. I don’t see a war coming to that point or to the US losing access to chip manufacturing because of one. What don’t I understand from this angle?

That said, I do think it’s important for the US to have their own chip manufacturing on shore. Not as some protective measure over some combat war, but (1) to ensure less possible influence from foreign governments and decrease likelihood of possible backdoors or intentional sabotage and (2) to protect against other factors from shutting down the facilities, like natural disasters.

[petralithic]

This is quite a naive take, sorry to say. It is absolutely true that a war is brewing in East Asia, part of the explicit intent being to control other countries' chip usage. This is the same sort of argument that was used during World War I when the major powers said there'd never be a war on the continent because every country was interconnected in commerce and culture, and well, it turns out that reasons for war aren't always rational.

[bpt3]

What happens if the PRC annexes Taiwan without bloodshed?

The options available to the US are: attack the PRC to blow up the chip manufacturers and probably start WW3, or frantically try to replicate the capabilities of the Taiwanese fabs before the PRC decides to cut the US off.

In the meantime, the PRC will have immense leverage over the rest of the world, and there is no scenario where they don't extract as much as they can from that advantage.

[chrsw]

I’d rather prepare for life with China in total control of Taiwan than try and defend Taiwan from China. I believe they will take Taiwan without bloodshed, anyway. Which is why it is critical to build up the US advanced manufacturing base. It will take a long time and cost a lot of money.

[LeafItAlone]

>What happens if the PRC annexes Taiwan without bloodshed?

Do you realistically see that happening? Why would the US allow that to happen when they are so reliant on it not?

https://en.m.wikipedia.org/wiki/Taiwan%E2%80%93United_States...

[infecto]

I am not sure what you are trying to say? That the US can simply press a button and end a conflict with China? China has been posturing forever on Taiwan being a part of China. They love to show of bridges and boats that would be able to facilitate a land invasion. We have already seen how quick China integrated HK. It is not a nonzero chance that China makes a move on the US. If that happens, where are the chips coming from. It’s smart to want to increase geographical diversification for something that is used in almost all tech products.

[LeafItAlone]

>China has been posturing forever on Taiwan being a part of China.

And yet they continue to just posture instead of doing it.

The US does maintain a small military presence in Taiwan already. Answer me this: if the US is so heavily dependent on Taiwan _not_ being part of China, then why would they let them take it?

US bringing chip manufacturing in country weakens Taiwan’s position and only then will China take it, when it feels safe from retaliation from the US.

[DeonRob]

I think this is where youre missing it > The US still has immense military power. Because this isnt true anymore and its been proven over and over in the past few years. As industrial power goes so does military and the US military is showing huge cracks while facing 3 massive wars in the pacific, ukraine, and middle east. Its already admitted it cant protect all 3.

The chinese just this week shut down the entire US auto industry because of rare earth if they blockade taiwan how long until they win that.

[LeafItAlone]

>Because this isnt true anymore and its been proven over and over in the past few years.

This is just incorrect. It has not “been proven over and over in the past few years”.

[kasey_junk]

The CHIPs act passed Congress during the Biden administration. The only thing Trump added was this weird non-elected post hoc equity grab.

[DeonRob]

You explained the issue perfectly we are moving past a age and time where we care what portfolio mangers/equity investors want. The point is to do things those investors hate but benefits the US government which you explained they wont do without force.

[qwopmaster]

If you can't manufacture your chips while your only geopolitical rival is pumping infinite money to homegrow their own fab business, it probably should cause some concern.

If the only source of high quantity and high quality chips is located in your competitor's backyard, and they spent several decades repeating how it's their wayward province that they fully intend to reclaim one way or another, it's pure stupidity to sit around and do nothing.

Let's not pretend that the money would be spent on basic research instead, by the way. US pumping some money into chip production is a rare spark of intelligence amidst an avalanche of stupidity and grift.

[anonfordays]

Amazes me how many self-proclaimed "techies" don't know this simple fact.

[jajko]

You would be amazed how many seemingly basic things about this world and IT you don't know... a bit of humility goes much longer way than this.

[anonfordays]

If I don't know something, I don't make statements such as "Apple, Nvidia, and Google all have significant chip manufacturing operations..." a bit of humility goes much longer way than this.

[jajko]

I don't think you understood my post

[anonfordays]

Nor did you understand mine.

[petralithic]

Which American companies manufacture chips on the latest node? Certainly not Texas Instruments, Global Foundries and one might even argue Intel, compared to Samsung and TSMC. It is a matter of national security that Intel not fail.

[SirMaster]

What government or military things use anywhere near the latest node chips though? I thought all that stuff usually uses really old chips, because that stuff only changes like once every couple decades.

[petralithic]

The government wants to build AI data centers and I'd assume they're not using decades old nodes to do so. There is always a use case and therefore national security interest for the latest nodes.

[freeopinion]

It is a matter of national security that state-of-the-art fabs exist within the nation and that the expertise to operate them also exists within the nation.

As you point out, it is questionable whether Intel has either of these.

It might be argued that it is critical to national security that Intel be replaced by HP. Or Nvidia. Or Sun, or Motorola, or Micron, or TI, or...

What's that you say? Most of those companies had their chance and failed? None of those companies are really in the game?

Why among all the list of failed or current fab owners is it so important that Intel be declared sacred?

Why not recognize that Intel is getting its clock cleaned by a company that doesn't design chips? Why not look outside of the chip design industry to save the chip fab industry?

[qwopmaster]

The bet seems obvious - Intel has been failing for a while, but they're still much better positioned to produce what the US government wants than some random companies like HP or TI. Their fabs aren't quite on the bleeding edge and the yields aren't quite what they'd like to have but it's still much more advanced than TI's 45-250nm fabs.

If HP, or Nvidia, or Sun, or Motorola wanted the bag maybe they should've tried building their own modern fabs.

[petralithic]

Because Intel is the only player left. What do you mean look outside the chip design industry to save the chip fab industry? It takes a very long time and lots of money to spin up a new state of the art fab, while Intel already has it mostly set up.

[tomp]

> Why among all the list of failed or current fab owners is it so important that Intel be declared sacred?

Has TI ever made anything nearly as complex as CPUs? Has NVIDIA? (Hint: the answer is "no"). Intel is pretty much the only option, though ChatGPT suggests GlobalFoundries as a potential other option (spun out of AMD).

[JeremyNT]

Intel is definitely special in that it's the only truly American fab.

I don't have a problem with a US government owning a stake in Intel given its massive strategic importance, but I have a problem with this government owning a stake in Intel given its brazen corruption.

[jacknews]

Exactly, and indirectly supported all business, with roads, the police, schools...

Government should own a stake in every business, and citizens should then get shares in that government fund.

[srvo]

I think that stake is called taxes. As for the shares, they're supposed to come in the form of government services.

[jacknews]

In theory, but there's a bit of a chasm of trust between the two.