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US Intel

(stratechery.com)
539 points maguay | 1 comments | 26 Aug 25 10:47 UTC | HN request time: 0s | source
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themgt ◴[26 Aug 25 13:47 UTC] 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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nonethewiser ◴[26 Aug 25 15:48 UTC] No.45028186[source]▶
Is it just me or is the author only making an argument for why Intel is too big to fail? He says hes steelmanning the equity stake but then he doesn't argue why it's necessary. He devotes 2 sentences to CLAIMING its necessary after aruging that Intel is too big to fail.

The article is basically like this:

> Leading edge domestic foundry companies are a national security concern. Therefor Intel is too big to fail.

OK. Many can agree with this. And I think the author makes a very good argument for it. He makes some good points:

- Startup cant replace Intel - US cant rely on TSMC alone - Artificial demand could actually improve Intel by solving the chicken and egg problem

But that doesn't answer the question, "why the equity stake?" And for more context, it's replacing what would have been grants with the equity stake. So it's, "Why replace the $XB in grants with an equity stake?"

He does touch on it but it's just a claim thrown in at the end:

>The single most important reason for the U.S. to own part of Intel, however, is the implicit promise that Intel Foundry is not going anywhere. There simply isn’t a credible way to make that promise without having skin in the game, and that is now the case.

OK, maybe. But that now needs to be argued for. The US can give them money as grants. Grants put skin in the game for the US because they require Intel to meet the terms.

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davedx ◴[26 Aug 25 16:29 UTC] No.45028820[source]▶
Yeah he could have explained that more, maybe he's assuming familiarity with other public-private ventures around the world?

If I was explaining it I would say "a huge equity stake gives you a lot of votes and influence over the company's strategic direction", including what the returns to shareholders should look like.

Think of railways in countries where the government has say, a 50% stake.

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1. cthalupa ◴[27 Aug 25 02:42 UTC] No.45034894[source]▶
Except what the government purchased is a block of non-voting shares as long as the government holds them. So what benefit does that provide over grants?