Uncle Sam shouldn't own Intel stock

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.

> 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.

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.

> 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.

>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.

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.