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The U.S. government has been holding discussions on taking an equity stake in the chip maker Intel, Bloomberg and the Wall Street Journal reported on Thursday.

Archive: https://archive.is/1EOAh

    • tal@lemmy.todayEnglish
      81·
      2 days ago

      I’d generally rather not have the government involved in an ownership position in the market, but my guess is that:

      • The US considers having a domestic (and second global) fab operator to be a national security priority. This would not be terribly surprising and would be in line with US statements and actions regarding chip availability for some years now.

      • Intel might not be dead without support, but they aren’t doing so well. I suspect that they’re going to get support from the federal government.

      • One way that the government can get some kind of direct return is to get some ownership in return for support. As I recall, this was done with some of the US auto companies the second time they were bailed out. The US sold its ownership share later to recoup some of its money.

        kagis

        Yeah:

        https://www.nbcnews.com/businessmain/u-s-exits-gm-stake-taxpayers-lose-10-5-billion-2D11716261

        DETROIT — The U.S. government ended up losing $10.5 billion on the General Motors bailout, but it says the alternative would have been far worse.

        The Treasury Department sold its final shares of the Detroit auto giant Monday, recovering $39 billion of the $49.5 billion it spent to save the dying automaker at the height of the financial crisis five years ago.

        I don’t know how this works, whether existing shareholders get diluted or what, but I suspect that it may be kinda the convention for this kind of situation.

      My guess is that if the US gets some ownership, it will probably sell it off later when and if Intel is on more solid ground.

      • lectricleopard@lemmy.world
        17·
        2 days ago

        If I make a bad investment, I’m hosed. If these fucks make a bad investment, they use my money to prop up the market so they can sell high and then let it tank.

        I do not trust this administration to do anything more than cover their own and their donors, asses. Propping up a failing silicon fab company is a good way to set large sums of money on fire.

        • UnderpantsWeevil@lemmy.worldEnglish
          22·
          2 days ago

          If these fucks make a bad investment, they use my money to prop up the market

          But if the industry is critical for basic functions of the economy - say, education or medicine or transit - then maybe keeping the lights on is more important than maximizing rental profits.

          • Kirp123@lemmy.world
            5·
            2 days ago

            If an industry is so critical to the functioning of the economy or the state then maybe it should be owned by the state? Maybe critical components of our society should not be at the whims of shareholders.

          • lectricleopard@lemmy.world
            2·
            2 days ago

            Um what? Rental profits?

            As far as its importance, Im a silicon design engineer. I care a lot about that. There are US fabs that aren’t too far behind for now, and TSMC is building its next fab in Arizona, notTaiwan.

            Like I said this is all about investors. Don’t be fooled.

            • UnderpantsWeevil@lemmy.worldEnglish
              11·
              1 day ago

              Um what? Rental profits?

              Economic “Rents”. Surplus income earned by a resource owner.

              In Intel’s case, they thought they could avoid investing in new major capital projects and just milk the existing IP/facilities to draw out the return on the original investment.

              There are US fabs that aren’t too far behind for now, and TSMC is building its next fab in Arizona, notTaiwan.

              I guess we’ll see what comes of that. But I’m not sure sending Intel into receivership is going to improve the American tech sector landscape

              • lectricleopard@lemmy.world
                1·
                1 day ago

                Intel is not going to fab leading edge chips anymore. They dont have the ability. From an economic standpoint, it appears they just tried to wring everything they could out of their old tech, but the technical reason is they didn’t have another option. There are no new technologies that they could have moved to. TSMC and Samsung are the only people making valuable advancements. They are only able to do so with the cooperation of all of their fab customers’ input. Intel doesn’t manufacture customers’ chips, only their own. They will have to spin off their failing fab and hopefully recover with their design side.

                I didn’t say they’re going bankrupt. But their stock price is suffering. Go look at it over the last 5 yrs. Cronies want their money, so they’re gonna pump and dump.