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    US Intel

    (stratechery.com)
    539 points maguay | 14 comments | | HN request time: 1.409s | source | bottom
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    themgt ◴[] No.45026515[source]
    I’ll be honest: there is a very good chance this won’t work .... At the same time, the China concerns are real, Intel Foundry needs a guarantee of existence to even court customers, and there really is no coming back from an exit. There won’t be a startup to fill Intel’s place. The U.S. will be completely dependent on foreign companies for the most important products on earth, and while everything may seem fine for the next five, ten, or even fifteen years, the seeds of that failure will eventually sprout, just like those 2007 seeds sprouted for Intel over the last couple of years. The only difference is that the repercussions of this failure will be catastrophic not for the U.S.’s leading semiconductor company, but for the U.S. itself.

    Very well argued. It's such a stunning dereliction the US let things get to this point. We were doing the "pivot to Asia" over a decade ago but no one thought to find TSMC on a map and ask whether Intel was driving itself into the dirt? "For want of a nail the kingdom was lost" but in this case the nail is like your entire metallurgical industry outsourced to the territory you plan on fighting over.

    replies(19): >>45026609 #>>45026778 #>>45026847 #>>45027040 #>>45027203 #>>45027671 #>>45028085 #>>45028186 #>>45029665 #>>45029679 #>>45030185 #>>45031538 #>>45032843 #>>45034153 #>>45034357 #>>45034925 #>>45035444 #>>45035539 #>>45037189 #
    1. Neywiny ◴[] No.45026609[source]
    This and everything else. We outsourced manufacturing of almost everything then are surprised when the people doing it for decades are better than we were.
    replies(1): >>45027501 #
    2. marbro ◴[] No.45027501[source]
    We outsourced manufacturing because it's not very profitable. The Mag 7 make 50x as much money as TSMC. Apple and Microsoft are the most profitable businesses in history.
    replies(4): >>45027908 #>>45027955 #>>45028229 #>>45028745 #
    3. georgeecollins ◴[] No.45027908[source]
    Intel was very profitable until it was not. They spent over $800B on stock buybacks. That will buy you some fabs, some R&D. Its true they invested in R&D but not well. Maybe the answer was to fund an independent internal competitor to keep the org focused.

    Financialization is a dead end when you face a nation state determined to control steps in you value chain. How profitable will apple be if they can’t get chips?

    replies(1): >>45028004 #
    4. jandrese ◴[] No.45027955[source]
    The problem is when importance is not reflected in the quarterly profit margin.
    replies(2): >>45030076 #>>45030649 #
    5. jandrese ◴[] No.45028004{3}[source]
    I still think Intel missed the boat when they had the dominant process in focusing entirely on their own chips and not taking customers for third party fabbing. Samsung and especially TSMC have demonstrated conclusively that the real money is in producing chips for other companies. It might be lower margin, but the volume is undeniable and it keeps your company on its toes with node improvements.

    Intel switched to a "service the stockholders before the customers" mode and they have never recovered.

    replies(1): >>45028340 #
    6. ilikerashers ◴[] No.45028229[source]
    The EU outsourced manufacturing without any Mag 7.

    I'm sure it'll work out well for us...

    replies(1): >>45030873 #
    7. freeopinion ◴[] No.45028340{4}[source]
    TSMC does not compete with their customers. Intel would. I know that is not a new idea and there are some established mitigations. But it seems it would be better if it wasn't an issue at all.
    replies(2): >>45033182 #>>45038954 #
    8. davedx ◴[] No.45028745[source]
    No, we outsourced it for the same reason we outsource anything else: because someone else, somewhere else, is doing it for cheaper. It has nothing to do with the profitability of the manufacturing company and everything to do with the costs of the products and services to their customers
    9. Workaccount2 ◴[] No.45030076{3}[source]
    The true place where the government should steer the ship of the market.
    10. treis ◴[] No.45030649{3}[source]
    Chips are one of those things where being the best is simultaneously very important and not at all important. Making a 10% better chip gets you the entire market. But it makes practically no difference if your cellphone or laptop or server or whatever has a 10% worse chip.
    replies(1): >>45033199 #
    11. kazen44 ◴[] No.45030873{3}[source]
    mind you that a lot of this outsourcing is also happening inside the EU from high wage western countries to lower waged eastern countries (poland, hungary, romania etc).
    12. convolvatron ◴[] No.45033182{5}[source]
    I worked in a CPU group that used IBM for a fab when they still had one. it was definitely an issue.
    13. p1necone ◴[] No.45033199{4}[source]
    > Making a 10% better chip gets you the entire market

    Gets you the entire datacenter market maybe. End user (PCs, cellphones etc) stuff is much more concerned about perf/$ (up front cost) than perf/watt (long term cost), and the embedded market (electronics, appliances etc) mostly care about 'good enough' as cheaply as possible - performance isn't a concern at all for many use cases.

    And the corporate market mostly cares about (perceived) reliability/liability concerns over everything else - see how hard it's been for AMD cpus to penetrate despite being measurably better in every category compared to Intel at various points in time.

    14. vel0city ◴[] No.45038954{5}[source]
    Samsung competes with their customers and yet they still sometimes choose Samsung. Same with IBM when they were a big competitive chip manufacturer. It probably makes the sale harder but it has been a common arrangement in the past.