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US Intel

(stratechery.com)
539 points maguay | 9 comments | | HN request time: 0s | 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.

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mvc ◴[] No.45027203[source]
If all advanced countries follow this reasoning, where does that leave us?
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minkzilla ◴[] No.45027509[source]
Robust and redundant manufacturing spread across the world with more opportunity for innovation?
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mallets ◴[] No.45027711[source]
Trillions of dollars spent just for redundancy? Most wouldn't even succeed in building a working process, forget profitable.
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throwawaymaths ◴[] No.45029013[source]
Starfleet code requires a second backup?

In case the first backup fails.

What are the chances that both a primary system and its backup would fail at the same time?

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1. twoodfin ◴[] No.45029933[source]
This is too glib: If you imagine a world where every critical industry is replicated in every large nation, often inefficiently or inadequately, that’s a world where the average person is much, much poorer.

And for what?

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2. j4coh ◴[] No.45030881[source]
Security, perhaps.
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3. lovich ◴[] No.45031718[source]
It’s a tradeoff between resilience and efficiency.

You can go for full efficiency if you want, but then like the US auto manufacturers learned during Covid, you don’t have any way to handle disruptions to your business

4. twoodfin ◴[] No.45032832[source]
In all seriousness, that’s basically what the Soviets thought they were doing—and why—from (at least) 1945 on.

It really didn’t work out, despite sometimes giving the appearance of a plausible alternative to the capitalist world.

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5. mpyne ◴[] No.45032906[source]
Why? The efficiency gains are a matter of size of the average company, not a matter of the total number of companies.

If what you said were true, it would be cheaper for there to be only one flavor of soda (as Bernie Sanders might have put it) rather than dozens.

Competition is better for consumers than monopoly, and that applies even when the consumers are nations.

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6. twoodfin ◴[] No.45033565[source]
The premise of this thread is that efficient markets and comparative advantage won’t leave even a large nation with enough of the right competitive local industries for national security or whatever objective.

Thus to sustain those industries (semiconductor fabrication in this case) industrial policy (subsidies, tariffs, government investment, “Buy American” rules, … ) is essential.

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7. mpyne ◴[] No.45034840{3}[source]
I agree that industrial policy is essential for a nation that wants to ensure that competitive industries exist within the nation's economy.

But the justification I replied to was that the nation must inherently suffer material inefficiencies for a nation to do this, due to how economies work, which is not the case (or at least, no real justification was offered other than the heuristic that larger firms are somehow inherently more efficient, which if anything is opposite to my experience in a very large org).

A nation might well implement an industrial policy so as to pessimize its local industries that survive, but that is not required to happen either.

8. prewett ◴[] No.45035221{3}[source]
I don’t think the problem with the Soviets was doing everything themselves, which seems to be working okay for China. The problem is that centralized planning doesn’t work, and the system dehumanized people and destroyed incentives for people to innovate.
9. minkzilla ◴[] No.45041851[source]
Maybe instead of all the wealth flowing to a couple huge companies in a couple countries wealth would be distributed more broadly.