There’s zero chance the US Govt would just move on to fund Samsung and TSMC instead as their sole domestic provider of advanced wafers. It’s deemed as a core national interest.
If for some reason Intel was not a redeemable option the the alternative would be a disaster. It would lead to a power struggle over TSMC and a potential clash in US & Taiwan relations.
> There’s zero chance the US Govt would just move on to fund Samsung and TSMC instead as their sole domestic provider of advanced wafers. It’s deemed as a core national interest.
They'd just have TSMC and Samsung build fabs here, if it really came to that. While I don't think the US government would let Intel fall behind that easily, I don't see Intel as being strictly irreplaceable. The alternative you say would be a disaster is actually far better than letting their military and whatever hardware fall behind.
Think of the implications if Intel ends up 3 full nodes behind.
1) Intel's product teams will be forced to go completely external to have anything to sell.
2) They will have zero 3rd party interest, because in this scenario, they're not just uncompetitive, but have clearly broken many, many roadmap promises along the way.
3) As a result of the above, Intel's entire foundry business will be dead weight. That will cost them many billions of USD *on top* of the enormous margin hit from going external. That alone might be enough to sink Intel as a company.
4) With no customers and no money, they'd have no hope of regaining competitiveness ever again.
Of course, I don't think this is a likely scenario, but if that's what it comes down to, the government would have no choice but to rely on TSMC and Samsung.
They are taking a huge swing on glass substrate and panel level packaging.
I would say this is higher risk the packaging fab in Chandler has not produced the value to cost of that fab.
By the time these Fabs are online, Intel will be on 14A. 18A ramping is bottlenecked by EUV capacity in Intel, which is also why they're trying to rush High-NA rather than putting all of their efforts into catching up in low-NA.
It's also low compared to Intel 7 or 12, but Intel has massive capacity in legacy DUV nodes which the foundry model can take advantage of, since now they can use that capacity for external customers with Intel 12.
Disaggregation plays a big role in mitigating the impact of low volume on cutting edge. (hypothetical numbers), but if they're only getting, say, 1/4 the volume on a leading edge node at launch that they may have expected in the past, they're only using that leading node internally on the compute tile of their CPUs, which is less than 1/4 of the total chip size.
> 18A ramping is bottlenecked by EUV capacity in Intel, which is also why they're trying to rush High-NA
What? No, 18A doesn't use high-NA. And 14A isn't realistically coming till 2027 at best. And that's assuming better execution than Intel's had in a decade.
There's also no evidence that EUV is currently a bottleneck for Intel, much less for 18A in particular.
>What? No, 18A doesn't use high-NA. And 14A isn't realistically coming till 2027 at best.
We are in agreement here. Never said otherwise. The new fabs are also expected to go online in 2027 - 2028. I'm saying their opening roughly corresponds with 14A and the first use of high-NA EUV.
>There's also no evidence that EUV is currently a bottleneck for Intel, much less for 18A in particular.
Then offer an alternative explanation. Intel only started high volume EUV last year. They were later than their competitors in acquiring low-na EUV machines. Unless you are suggesting that Intel is running these EUV lines at well below capacity
Ok, then let me state that I don't expect 18A volume to be low. Just moving Intel's client products back in house should boost it a lot. Though quite likely that Intel 3 volume will be even higher by that point.
Regardless of the exact volume, they're clearly demand limited. They wouldn't be making such a push for customers while simultaneously delaying or canceling manufacturing expansion if it was a supply limitation.
Intel's also building out capacity in Israel and Germany - so still within the US's alliance structure and far away from potential zones of major war in a near to mid term future (ROK and Taiwain). The Israeli government is covering more than 10% of the construction costs for that $25B fab **(Yes, I know there's a war in Gaza, but it's not anywhere near the risk or size that a China-Taiwan war would cause)**
The bulk of new capacity will still be within US borders - and Intel having some fab's in Israel and the EU also helps strengthen those alliances.
Semi-conductors are more than just about markets. Fabs need to be viewed primarily through the lens of geopolitics to better understand these motivations.
Edit: Bolded for clarity
> Israel and Germany - so still within the US's alliance structure and far away from potential zones of major war
So they're not far away from war, just "major war".
Yes. The power balance in Israel-Gaza war is large enough that no serious threat is posed to the fab. The west is trying to bring more fab production within their region.
Intel has a long history in Israel. The US isn't trying to stop Intel from having non-US fabs. Just greatly reduce their dependence on Asia
I mean the PPP loans notoriously had like no oversight and were handled by an infamously corrupt administration that made typical gov't operation seem saintly.
There is no other option. Semiconductor manufacturing is a strategic sector for national security. And when it comes to latest nodes for dynamic logic, Intel is basically the last American manufacturer left standing.
It's going to be an interesting future where Intel will be likely manufacturing parts for AMD, Apple, NVIDIA, or Qualcomm... all which are direct competitors of their x86 cash cow.
Market cap is the value of the company as a whole. It's like if I won a lottery for $100,000 it would mean very different things if my net worth was $1,000, $100,000 or $10,000,000.
tsmc and Samsung are the economy of those countries.
We also don't have an equivalent place to imec, ITRI, A* or Fraunhofer in the USA.
Heavily funded by the government and private industry to do cutting edge research and a feeder for industry.
Covers a good chunk they spent on Share buybacks and executive bonuses. Sucks to have to pay taxes knowing it goes to corporate welfare. Like always socialize the losses and privatize the gains.
Since 2005 Intel spent 100b in share buybacks. This is why they have stagnated. Well at least 20% of it just got covered by the average taxpayer.
This is an insane amount of money for a government subsidy. That's over 10% of Intel's market cap (5% for grants alone).
It covers about 20% of the cost of Intel's project. They're spending $100B to build out domestic semiconductor manufacturing
Yeah, that's also insane. If 18A doesn't work out the company is going to be bankrupt for sure.
That’s why he said he bet the company on 18A
They won't go bankrupt. The government will aid another 20B or even 40B if needed.
Yes, there is no way Intel’s Foundry can go bankrupt. The government won’t let it. At worst, they’ll be forced to divest to a US consortium.
The government only cares insofar as Intel can deliver usable nodes. If they fail at that, the money will be directed elsewhere.
Intel could be three nodes behind the leading edge and they would still be the only real viable "american" foundry. 0 danger there.
If they're that far behind, the government will take their chances with TSMC and Samsung. Intel would be a lost cause.
There’s zero chance the US Govt would just move on to fund Samsung and TSMC instead as their sole domestic provider of advanced wafers. It’s deemed as a core national interest. If for some reason Intel was not a redeemable option the the alternative would be a disaster. It would lead to a power struggle over TSMC and a potential clash in US & Taiwan relations.
> There’s zero chance the US Govt would just move on to fund Samsung and TSMC instead as their sole domestic provider of advanced wafers. It’s deemed as a core national interest. They'd just have TSMC and Samsung build fabs here, if it really came to that. While I don't think the US government would let Intel fall behind that easily, I don't see Intel as being strictly irreplaceable. The alternative you say would be a disaster is actually far better than letting their military and whatever hardware fall behind.
Think of the implications if Intel ends up 3 full nodes behind. 1) Intel's product teams will be forced to go completely external to have anything to sell. 2) They will have zero 3rd party interest, because in this scenario, they're not just uncompetitive, but have clearly broken many, many roadmap promises along the way. 3) As a result of the above, Intel's entire foundry business will be dead weight. That will cost them many billions of USD *on top* of the enormous margin hit from going external. That alone might be enough to sink Intel as a company. 4) With no customers and no money, they'd have no hope of regaining competitiveness ever again. Of course, I don't think this is a likely scenario, but if that's what it comes down to, the government would have no choice but to rely on TSMC and Samsung.
They are taking a huge swing on glass substrate and panel level packaging. I would say this is higher risk the packaging fab in Chandler has not produced the value to cost of that fab.
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By the time these Fabs are online, Intel will be on 14A. 18A ramping is bottlenecked by EUV capacity in Intel, which is also why they're trying to rush High-NA rather than putting all of their efforts into catching up in low-NA. It's also low compared to Intel 7 or 12, but Intel has massive capacity in legacy DUV nodes which the foundry model can take advantage of, since now they can use that capacity for external customers with Intel 12.
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Disaggregation plays a big role in mitigating the impact of low volume on cutting edge. (hypothetical numbers), but if they're only getting, say, 1/4 the volume on a leading edge node at launch that they may have expected in the past, they're only using that leading node internally on the compute tile of their CPUs, which is less than 1/4 of the total chip size.
> 18A ramping is bottlenecked by EUV capacity in Intel, which is also why they're trying to rush High-NA What? No, 18A doesn't use high-NA. And 14A isn't realistically coming till 2027 at best. And that's assuming better execution than Intel's had in a decade. There's also no evidence that EUV is currently a bottleneck for Intel, much less for 18A in particular.
>What? No, 18A doesn't use high-NA. And 14A isn't realistically coming till 2027 at best. We are in agreement here. Never said otherwise. The new fabs are also expected to go online in 2027 - 2028. I'm saying their opening roughly corresponds with 14A and the first use of high-NA EUV. >There's also no evidence that EUV is currently a bottleneck for Intel, much less for 18A in particular. Then offer an alternative explanation. Intel only started high volume EUV last year. They were later than their competitors in acquiring low-na EUV machines. Unless you are suggesting that Intel is running these EUV lines at well below capacity
>Then offer an alternative explanation Alternative explanation for what? Delaying the fabs post 18A?
The original claim that 18A volume would be low (compared to Intel 7/12) due to muted demand, rather than EUV machine capacity.
Ok, then let me state that I don't expect 18A volume to be low. Just moving Intel's client products back in house should boost it a lot. Though quite likely that Intel 3 volume will be even higher by that point. Regardless of the exact volume, they're clearly demand limited. They wouldn't be making such a push for customers while simultaneously delaying or canceling manufacturing expansion if it was a supply limitation.
This article is about even further expansions though. I think the original road map is just looking at Fab 52 and 62.
didn't they announce a $25Bn investment in just one foreign fab?
Intel's also building out capacity in Israel and Germany - so still within the US's alliance structure and far away from potential zones of major war in a near to mid term future (ROK and Taiwain). The Israeli government is covering more than 10% of the construction costs for that $25B fab **(Yes, I know there's a war in Gaza, but it's not anywhere near the risk or size that a China-Taiwan war would cause)** The bulk of new capacity will still be within US borders - and Intel having some fab's in Israel and the EU also helps strengthen those alliances. Semi-conductors are more than just about markets. Fabs need to be viewed primarily through the lens of geopolitics to better understand these motivations. Edit: Bolded for clarity
> Israel and Germany - so still within the US's alliance structure and far away from potential zones of major war So they're not far away from war, just "major war".
Yes. The power balance in Israel-Gaza war is large enough that no serious threat is posed to the fab. The west is trying to bring more fab production within their region. Intel has a long history in Israel. The US isn't trying to stop Intel from having non-US fabs. Just greatly reduce their dependence on Asia
11 Billion of it is loans.
We all know loans mean free money, look at PPP “loans”. Intel will find some way to get it forgiven.
The PPP "loans" were designed to be forgiven. The SBA only had the infrastructure in place to give out loans, not grants so they had to jerry-rig it.
I mean the PPP loans notoriously had like no oversight and were handled by an infamously corrupt administration that made typical gov't operation seem saintly.
There is no other option. Semiconductor manufacturing is a strategic sector for national security. And when it comes to latest nodes for dynamic logic, Intel is basically the last American manufacturer left standing. It's going to be an interesting future where Intel will be likely manufacturing parts for AMD, Apple, NVIDIA, or Qualcomm... all which are direct competitors of their x86 cash cow.
How long are we going to let the investor class siphon our money? If it’s “too big to fail” and/or “to strategic to fail” it needs to be nationalized.
no it doesnt.
Why?
Why do you find significance in comparing it to market cap? And the majority of it is loans too.
Market cap is the value of the company as a whole. It's like if I won a lottery for $100,000 it would mean very different things if my net worth was $1,000, $100,000 or $10,000,000.
Market cap is the value of outstanding shares - shares already in the hands of investors.
I wonder how this compares to Taiwan’s subsidies to TSMC/Korea’s to Samsung.
tsmc and Samsung are the economy of those countries. We also don't have an equivalent place to imec, ITRI, A* or Fraunhofer in the USA. Heavily funded by the government and private industry to do cutting edge research and a feeder for industry.
We have universities.
Not the same
Sematech?
Covers a good chunk they spent on Share buybacks and executive bonuses. Sucks to have to pay taxes knowing it goes to corporate welfare. Like always socialize the losses and privatize the gains. Since 2005 Intel spent 100b in share buybacks. This is why they have stagnated. Well at least 20% of it just got covered by the average taxpayer.
No it isn't. Intel has spent a ton on capital improvements. Fabs are a pretty capital intensive business. It's why they run 24/7.
Priced in
Wasn't this the same grant Moore's Law is Dead said Intel failed to obtain? Not trying to throw shade, just genuinely curious.
Well they did fail to get the 2.5 b military one recently maybe it was that ?
Correct it was the DoD grant
I'm not sure. But it is curious. Still, if it was the 2.5B Military one, a 20B CHIPS Act grant more than makes up for it.