Intel CEO Urges Lawmakers To 'Not Waste This Crisis' in Chip Push (bloomberg.com) 67
Intel Chief Executive Officer Pat Gelsinger urged the U.S. and Europe to push ahead with efforts to bring back chip manufacturing, arguing that government funding is needed to address an overconcentration of production in Asia. From a report: Governments need to learn from the disruptions of the pandemic and consider the national-security implications of having about 80% of production in Asia, Gelsinger said in an interview with Bloomberg News Editor-in-Chief John Micklethwait at The Year Ahead conference. Gelsinger said he was optimistic that the U.S. and European Union will push forward with proposed government funding to support the building of plants. "Let's not waste this crisis," he said. "It's good economics, but it's also national security."
A chip shortage has ravaged a wide range of industries in the past year, hurting sales of everything from cars to iPhones. That's put a spotlight on the lack of production outside of Asia. Increasing tensions with China also have added pressure on U.S. lawmakers to restore local manufacturing. Gelsinger, 60, said he will soon announce expansion plans for Intel's manufacturing in the U.S. and Europe. Bloomberg has reported that the chipmaker is planning to build a production base in Germany and other facilities in Italy and France. Its next domestic factory will be in the Columbus, Ohio, area, according to Cleveland.com.
A chip shortage has ravaged a wide range of industries in the past year, hurting sales of everything from cars to iPhones. That's put a spotlight on the lack of production outside of Asia. Increasing tensions with China also have added pressure on U.S. lawmakers to restore local manufacturing. Gelsinger, 60, said he will soon announce expansion plans for Intel's manufacturing in the U.S. and Europe. Bloomberg has reported that the chipmaker is planning to build a production base in Germany and other facilities in Italy and France. Its next domestic factory will be in the Columbus, Ohio, area, according to Cleveland.com.
Supply instability will only get worse (Score:2)
We can potentially avoid another world war if we aren't economically dependent on the outcome of the PRC's dispute with Taiwan. There would be no winners if China and the US went into a drawn out cold war or worse, a hot war.
Re:Supply instability will only get worse (Score:5, Interesting)
I think China's strategy is that when they decide to take Taiwan, they'll do it too quickly for us to respond, and we'll be too tied to them economically to do anything about it. Ultimately, it will be like Russia taking Crimea from Ukraine despite us having a defense treaty with Ukraine.
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If China and the US ever went to war there would be 500 million unemployed Chinese in a few months, and they'd all get hungry really quickly. What do you think would happen in China then?
The huge US corporation I work for makes nearly $1 billion in profit every year from its operations in China, and they're a long way from being the only ones. What makes you think the shareholders want to give that up?
The US military do need t
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The U.S. has and had no defense treaty with Ukraine. Stop making shit up.
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My understanding is that when Ukraine agreed to transfer all their nuclear weapons to Russia after the breakup of the Soviet Union, part of the deal was that the US and Russia mutually agreed to defend Ukraine.
https://en.wikipedia.org/wiki/... [wikipedia.org]
Yup. We have a treaty obligation to defend Ukraine, but we have no intention of doing so.
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That's not treaty, it is a memorandum. And agreeing on a memorandum with Russia is worth only the paper it is written upon. In a sense, it is more like an executive order. Treaties are passed by the Senate of the U.S. That's why we have so few of them.
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We have a treaty obligation to defend Ukraine, but we have no intention of doing so.
Even if it is a treaty, it does not require military intervention. It require consulting others and seeking action from the UN security council, which of course Russia would veto.
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I think China's strategy is that when they decide to take Taiwan, they'll do it too quickly for us to respond,
They can't. Taiwan has enough of an army that conquering the country is not that easy. It's not like Iraq where you could conquer as fast as tanks can drive.
Xi Jing Ping's Wolf Warrior diplomacy is starting (Score:2)
Wolf Warrior (think rabid nationalist Rambo, it's a series of movies too) diplomacy [wikipedia.org] seems to be starting to make him [wikipedia.org] unpopular internally in the CCP - as is his attempt to be Mao and grant himself infinite tenure [bbc.com]. But, that snake as a lot of heads and the removal of one won't matter much, "Oh, Bother".
Re:Xi Jing Ping's Wolf Warrior diplomacy is starti (Score:4, Insightful)
Yeah, I wouldn't recommend trying to dismantle the CCP by laying the blame at a single person's feet. It's not productive and they are just as likely to use the opportunity to sacrifice a few for the greater good of the Party. China's problems are way bigger than Xi Jinping, and will exist long after him. The institutions themselves are corrupt and dangerous to the well-being of humanity.
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China are friends with Russia again. If Russia wants to invade Ukraine, or the rest of eastern (and maybe western) Europe, China could fuck the USA and Europe royally because of the trade and production imbalance.
It's a good reason why pure unregulated capitalism is shit. It is the capitalists who have got the west into this mess. I believe in a social democracy, where the interests of the whole need to taken into account, not just the rich fucks. If you are all really nerds here, that translates to, "The n
Re: Supply instability will only get worse (Score:1)
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Which countries have, or has ever had, "pure unregulated capitalism"? I'll give you a hint: none.
Somalia after their civil war was pure capitalism and the absence of government regulation because there was no government. Individuals could invest in pirates and receive returns on successful raids.
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Get back on your meds, man.
Translation: (Score:5, Insightful)
We've saved billions by offshoring our manufacturing. Now, we need the government to hand us billions more to bring some manufacturing capacity back. (But in fifteen years when no manufacturing has materialized we won't admit we pocketed the government donations in the name of our investors and executives.)
This type of shit is getting way too common. Entire industries squander their own potential in the name of profit, then when they realize how utterly royally they screwed the pooch they go running to the government to bail them out. I know it happens, and it'll keep happening because we have to save the giants from collapsing on themselves and taking the rest of our society with them, but it's god damned maddening to be one of the little people watching it happen over and over and over again.
Re:Translation: (Score:5, Insightful)
privatize the profits, socialize the losses.
same as it ever was.
it's a grift.
it's a grift made possible by the idiots in congress.
it's a grift made possible because when they do break the law, they pay a far too small fine and nobody goes to jail.
10 years hence, Intel will have soaked up billions of dollars in government money and, if by some miracle they build the plants, they will have mothballed them.
Gelsinger is already working on how he'll be able to use the money for stock buybacks and to inflate the c-suite bonuses.
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No, Intel is actually stating that their core philosophy of maintaining the integrated fab structure and keeping the lion's share of fab in the US was actually the right move. They are criticized by their shareholders
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And yes, Intel will outsource a small percentage of their maufacturing to TSMC and Global Foundries. Global foundries is in the US. TSMC is in fact building an enormous plant in Arizona, next to Intel's plants, so it makes sense for Intel to send ove
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You're not wrong, but the first comment you responded to above was about a general state of affairs, not just Intel. The first comment above was complaining about handouts in general, for any reason that is self-inflicted, in any industry. Airlines, cars, and insurance come to mind from recent years. Yes, Intel will have an advantage with it's domestic manufacturing, but it's not all domestic and foreign assembly in their supply chain is still an issue. Anyway, from the taxpayers perspective, the tax money
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Intel has fallen way behind at their fabs. They are still making a lot of stuff on their ancient 14nm++++ process. It hurts their CPUs, they run extremely hot and are power hungry. AMD, which uses TSMC's 5nm process, is way ahead.
That's why shareholders are annoyed. Being the short sighted profit focused bunch they are, they don't really care if on-shoring manufacturing is the right thing for the country. All they see is that AMD is leveraging their relationship with TSMC to great effect and taking profits
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"Intel announced the opening of its first ever chip manufacturing facility in Asia on Tuesday, in Dalian, China.
The US$2.5 billion chip factory is producing chips on 12-inch (300-millimeter) silicon wafers, mainly chipsets to be used in desktop computers, laptops and servers, Intel said. The factory is already fully operational.
When it was originally announced in 2007, the factory project raised eyebrows because it was a major commitm
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"neo liberal capitalism "? Nice collection of words meaning nothing. And Perot didn't speak the truth. It was more or less a wash:
https://en.wikipedia.org/wiki/... [wikipedia.org]
Perot just went for headlines because he know people like you would eat it up. Perot was no economist, he was basically a loud mouth.
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The solution shouldn't be "build intel a fab". If the industry needs more capacity then it should be a fab everyone could use and the taxpayers should benefit.
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The dumbest thing is the taxpayers don't scream and shout when this happens, and that is because the politicians have unhinged the cost and consequences of government from taxes through creative accounting and debt.
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There's plenty of us screaming. The problem is getting the general public to remember this shit come election time and swat the incumbents with a massive and authoritative baseball bat to the butt.
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The problem is the politicians keep on smoothing the consequences over, like in 2008 and again with the pandemic. Each time we spend more and more with no 'immediate' consequences. But the problem is we keep kicking the ball down the road, and the politicians don't have to answer for anything. One of these days everything will catch up.
Intel CEO wants? (Score:1)
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What in the world are you talkin' about? Intel moved things out?
AMD is the company that moved all their fab work to TSMC and Dresden before that. Intel has always done the bulk of their fabs right here in the USA.
"It's good economics but also national security" (Score:2)
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If it's good economics then the free market will bring back semi manufacturing on their own and Intel wouldn't need to approach the US government with tin cup in hand looking for handouts. It's amazing how corporations selectively decide when the free market works and when it doesn't.
Unless, maybe, just maybe, there's strategic government spending in China which has made manufacturing there artificially cheaper than competing locations. The control over specific chosen raw materials is particularly clever. Manufacturing with rare earth magnets just becomes impossible anywhere except China even as they can price the goods higher than they would be if they were produced elsewhere.
Boom and bust (Score:2)
Onshore manufacturing is definitely to be desired, but can it be profitable enough to survive?
I was just reading an article about the semiconductor industry;
https://www.schwab.com/resourc... [schwab.com]
"Is a bust coming? The reasons outlined above suggest coming excess supply. Once the foundries are built, it is very difficult to idle capacity. Huge capital investment requires cash flow to pay for it, which means production often continues—even at a loss."
$19.4B Q4 2021 revenue (Score:2)
But we're going to cry poor to the government that they need to fork over billions more in taxpayer money to fund chip plants.
So, billion dollar company asking for corp welfare (Score:1)
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Indeed.
Lets get someone to spin up a RISC-V business using Global Foundries' fab and make these chips in the US. Then, the Gov. can say, "Our services must be run on US-manufactured CPUs, except for certain administrative exceptions (super computers)."
Lets see how Intel's CEO responds to that.
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Oh your poor navie bastard. They want you pay to bring the manufacturing back, they won't be bringing any of the jobs back! Those position will be filled by H1bs
If you want them to onshore it... (Score:2)
...be prepared to pay up.
This is one of those cases where government has to get involved, because there's no compelling reason for them to be onshore.
For Intel, it's not good economics. If it's about national security, "national" should participate financially.
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Its only not good economics because the 'free traders' decided to let big business avoid paying their share - either by manufacturing their goods here and therefore contributing to the local economy and skills development of the domestic population or through tariffs on imported goods but still enjoy full unfettered access to our market.
Free trade is a shitty policy unless you only do it with true economic and social peers. The rich just get richer, everyone else is left with an ever shrinking slice of the
Hmm (Score:5, Insightful)
It's important to have a manufacturing capability in the country.
It's also important not to reward the corporations that moved it to Asia in the first place. They already made their profits from that move. Asking for a handout to bring it back is convenient for them, but not the right thing for the country.
If the government invests in bringing manufacturing back, there should be at least three conditions.
First, it should be for companies doing open designs where they publish the drivers and documentation necessary for anyone to integrate. That will help the economy by allowing more startups to make new products with the latest chips, and not just the big companies.
Second, the government should get a percentage of stock in the manufacturer with two seats on the board of directors. This is to get first hand insight into the company's operations and future plans, and to add two important perspectives to their discussions. One is a national security perspective, representing the department of defense. The second is a consumer security and privacy perspective, with representation from advocates such as FSF, EFF, CDT, ACLU, etc who maybe can get together, figure out an annual rotation, and take turns putting someone there who will then report to everyone but only on the relevant matters. They obviously need such adult supervision since this situation was entirely predictable when everyone was moving operations to Asia, or when proposing chips with anti-consumer tracking technology.
Third, the government will only buy chips from domestic manufacturers. This is a requirement for national security and also to create the market for domestic chips, since they will start out being priced higher than foreign chips.
Any manufacturer that doesn't want these conditions could do whatever they want, but they won't be getting a handout and they won't be selling to government agencies here.
That's how it should be. It's the right way to not waste a crisis.
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I would prefer the government just didn't give handouts at all. But if it does, it needs to make sure the American people funding those handouts get something in return, and it's not just welfare for the rich.
Intel is in this story asking for a handout. Nobody forced Intel to make more profits by moving their manufacturing to Asia. So they made their money at the expense of national security and domestic jobs. Now they want more money to bring the manufacturing back? If the American government gets involved
Re: Hmm (Score:2)
Nobody forced Intel to make more profits by moving their manufacturing to Asia.
So you want them to move manufacturing here, reduce their profits, and accept punishment for the "mistake" of moving manufacturing overseas ... Voluntarily?
Why would they do that? Spend more money, to make less money, because this is good for you _strategically_, and you don't want to pay for it. You're going to have to pay for that! Shit, do it the other way, tax the fuck out of imported manufactured goods, that'll make inflation look even awesomer.
I can't tell if you're way the hell out in left or righ
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Yes, increasing local manufacturing is of strategic interest.
It will definitely be economically interesting to a lot of people if we get into a conflict with China about anything and it escalates to the point that they decide to stop all shipments to the United States.
Yes.
No, I don't want to reduce their prof
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Regarding #2, this national security train wreck where the integrity and availability of chips are both vulnerable was not only predictable, but actually predicted by people right here on Slashdot. If common sense and patriotism didn't help companies do the right thing in the past, what make you think they'll do the right thing in the future?
Intel currently has 10 people on the board. Two more is fine. Remember only one would represent the national security interest, and one would represent the people's int
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You didn't think about propriety technology but it's possible to publish most of the blue-prints with a few black-box areas.
Controlling the corporate board should be separate from running the corporation: The government should have no involvement in the latter. I'm thinking Sarbannes-Oxley-style reporting with the government being able to audit the corporate board.
This just takes us back to the #1 problem with US government, it's inability to ensure market competition: It's a corporatism fanboi, not a re
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Thank you for the constructive reply!
If someone can clone a product by just reading the driver source code and the developer documentation, it's not very proprietary. Your middle ground suggestion is interesting.
I agree the government should not be involved in running the day to day business of any corporation. I'm not even sure that government should be running most of the day to day business of the government. A lot of it (not all) could be outsourced. There would need to be some controls in place but I t
Never let a good crisis go to waste (Score:5, Insightful)
Intel can have my tax dollars in exchange for the same thing they give private citizens: stock. And not the cheap stuff (my tax dollars are valuable as hell). I want a voting share or no money.
No more free money for corporations. If they want my money, they better be ready to give up a piece of the pie. That's capitalism in a nutshell.
Re: Never let a good crisis go to waste (Score:1)
He wants socialism? (Score:2)
Why the hell should governments provide funding? Intel is a private company. Use investor money. Float some bonds. Put out more stock.
If Intel and other companies are so poorly run that they can't exist without taxpayer money, they should be allowed to fail. Having government use public money for private purposes is borderline fascism, but most
Give us money (Score:2)
Why? Just because. Also, we will demand subsidies from the states and counties where we build any plants.
It's not like chip manufacturers don't make money. But they would like more money.
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Intel is sitting on plenty of cash (Score:1)
Intel is sitting on 24 billion in cash. It costs a few billion to build a 300mm fab.
They could easily build the 3 or 4 they need themselves, without any government help, but how would that socialize costs and privatize profits for the corporate oligarchy?
No, its BAD econimics (Score:2)
Indirectly funding TSMC (Score:5, Interesting)
Intel laid out an unknown amount of cash to secure up to 40 kwpm (kilo wafers per month) of TSMC N3. Nobody knows how much they paid to TSMC, but it is well-known that less-loyal customers are expected to pre-pay for capacity, especially if those customers are competing for wafers with existing customers. Intel only recently started taking wafers from TSMC. In any case, Intel likely paid over $10 billion for the capacity, considering that TSMC had to refit a future research fab for N3 production to accommodate Intel's expansive order. Intel is also taking N6, N5, and possibly N4 wafers from tSMC, all of which will cost them significant amounts of money.
Meanwhile Intel will be lucky to sustain 20 kwpm of their 7nm Intel 4 process by the end of 2023, when N3 will already be shipping to Intel and Apple. No amount of Federal money will help them with that. The constraint is EUV equipment from ASML. Nobody knows exactly WHY Intel failed to order sufficient EUV machines to expand their production of Intel 4, but the fact remains that most EUV shipments have been and will for the foreseeable future to TSMC and Samsung. Intel won't be "back in the game" until their 20A node, assuming that ever happens.
Effectively, by asking the Federal government for more money to expand domestic production, they're offsetting the money they've sent to TSMC. In Taiwan. And what sort of fabs will Intel build with this support? Possibly fabs that will eventually produce Intel 20a, assuming the process can be made to work and that there are no problems with ASML's High NA EUV equipment (Intel should be receiving machines by 2024/2025, though in what quantity, we don't know). Without that Federal money, it may be hard for Intel to pay TSMC today for wafers that they need for near-future products and fund continued process research.
wealthy companies (Score:2)
It always amuses me that hugely profitable companies are actually charities requiring government handouts and tax breaks, usually paying $ZERO taxes.
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To be fair, Intel is very close to not being a profitable company.
Socialism is great! (Score:2)
Skin care Health (Score:1)
Oooooh, poor liddle Intel, gonna cry? (Score:2)
Guess that wholesale offshoring of production to an autocratic single-party ruled superpower and the associated risk is moving closer to "current fiscal quarter" territory, hmmm?
Well, I personally would strongly suggest Intel and Co. gets in gear and starts producing low-power computing chips (ARM, or, preferably, Open RISC V) on US domestic territory. And perhaps get some alternatives to the WinTel charade up and running. ... Just an idea.
Electric Longboard (Score:1)