Intel's New Funding Came From Already-Awarded Grants. So What Happens Next? (techcrunch.com) 93
The U.S. government's 10% stake in Intel "is a mistake," writes the Washington Post's editorial board, calling Intel "an aging also-ran in critical markets" that "has spent recent years stumbling on execution and missing one strategic opportunity after another."
But TechCrunch points out that the U.S. government "does not appear to be committing new funds. Instead, it's simply making good on what Intel described as 'grants previously awarded, but not yet paid, to Intel.'" Specifically, the $8.9 billion is supposed to come from $5.7 billion awarded-but-not-paid to Intel under the Biden administration's CHIPS Act, as well as $3.2 billion also awarded by the Biden administration through the Secure Enclave program. In a post on his social network Truth Social, Trump wrote, "The United States paid nothing for these shares..." Trump has been critical of the CHIPS Act, calling it a "horrible, horrible thing" and calling on House Speaker Mike Johnson to "get rid" of it...
According to The New York Times, some bankers and lawyers believe the CHIPS Act may not allow the government to convert its grants to equity, opening this deal to potential legal challenges.
Reuters writes that the money "will not be enough for its contract-chipmaking business to flourish, analysts said. Intel still needs external customers for its cutting-edge 14A manufacturing process to go to production, says Summit Insights analyst Kinngai Chan, "to make its foundry arm economically viable." "We don't think any government investment will change the fate of its foundry arm if they cannot secure enough customers..."
Reuters has reported that Intel's current 18A process — less advanced than 14A — is facing problems with yield, the measure of how many chips printed are good enough to make available to customers. Large chip factories including TSMC swallow the cost of poor yields during the first iterations of the process when working with customers like Apple. For Intel, which reported net losses for six straight quarters, that's hard to do and still turn a profit. "If the yield is bad then new customers won't use Intel Foundry, so it really won't fix the technical aspect of the company," said Ryuta Makino, analyst at Gabelli Funds, which holds Intel stock.
Makino, who believes that Intel can ultimately produce chips at optimal yields, views the deal as a net negative for Intel compared with just receiving the funding under the CHIPS Act as originally promised under the Biden Administration. "This isn't free money," he said. The federal government will not take a seat on Intel's board and has agreed to vote with the company's board on matters that need shareholder approval, Intel said. But this voting agreement comes with "limited exceptions" and the government is getting Intel's shares at a 17.5% discount to their closing price on Friday. The stake will make the U.S. government Intel's biggest shareholder, though neither Trump nor Intel disclosed when the transaction would happen...
Some analysts say Intel could benefit from the government's support, including in building out factories. Intel has said it is investing more than $100 billion to expand its U.S. factories and expects to begin high-volume chip production later this year at its Arizona plant. "To have access to capital and a new partial owner that wants to see you succeed are both important," said Peter Tuz, president of Chase Investment Counsel.
But TechCrunch points out that the U.S. government "does not appear to be committing new funds. Instead, it's simply making good on what Intel described as 'grants previously awarded, but not yet paid, to Intel.'" Specifically, the $8.9 billion is supposed to come from $5.7 billion awarded-but-not-paid to Intel under the Biden administration's CHIPS Act, as well as $3.2 billion also awarded by the Biden administration through the Secure Enclave program. In a post on his social network Truth Social, Trump wrote, "The United States paid nothing for these shares..." Trump has been critical of the CHIPS Act, calling it a "horrible, horrible thing" and calling on House Speaker Mike Johnson to "get rid" of it...
According to The New York Times, some bankers and lawyers believe the CHIPS Act may not allow the government to convert its grants to equity, opening this deal to potential legal challenges.
Reuters writes that the money "will not be enough for its contract-chipmaking business to flourish, analysts said. Intel still needs external customers for its cutting-edge 14A manufacturing process to go to production, says Summit Insights analyst Kinngai Chan, "to make its foundry arm economically viable." "We don't think any government investment will change the fate of its foundry arm if they cannot secure enough customers..."
Reuters has reported that Intel's current 18A process — less advanced than 14A — is facing problems with yield, the measure of how many chips printed are good enough to make available to customers. Large chip factories including TSMC swallow the cost of poor yields during the first iterations of the process when working with customers like Apple. For Intel, which reported net losses for six straight quarters, that's hard to do and still turn a profit. "If the yield is bad then new customers won't use Intel Foundry, so it really won't fix the technical aspect of the company," said Ryuta Makino, analyst at Gabelli Funds, which holds Intel stock.
Makino, who believes that Intel can ultimately produce chips at optimal yields, views the deal as a net negative for Intel compared with just receiving the funding under the CHIPS Act as originally promised under the Biden Administration. "This isn't free money," he said. The federal government will not take a seat on Intel's board and has agreed to vote with the company's board on matters that need shareholder approval, Intel said. But this voting agreement comes with "limited exceptions" and the government is getting Intel's shares at a 17.5% discount to their closing price on Friday. The stake will make the U.S. government Intel's biggest shareholder, though neither Trump nor Intel disclosed when the transaction would happen...
Some analysts say Intel could benefit from the government's support, including in building out factories. Intel has said it is investing more than $100 billion to expand its U.S. factories and expects to begin high-volume chip production later this year at its Arizona plant. "To have access to capital and a new partial owner that wants to see you succeed are both important," said Peter Tuz, president of Chase Investment Counsel.
What do you mean, "what happens next"? (Score:5, Insightful)
What happens when a "small government party" takes over a company and begins to micromanage?
On top of everything else, government corruption is applied directly to the company's forehead, it fails, and the government officers that meddled become a lot richer.
Collective ownership of the means of production, Socialism, etc.
The stuff the trump party is and has always been against, except when in power.
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Trump is beating the hyper-nationalist drum for a company whose products are circling the drain. Intel is a failing business with no direction whose competitors have outwitted it.
Why would nvidia, AMD, Apple, Qualcomm, Ti etc switch to fabbing their stuff on inferior technology unless something were to happen to TSMC?
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Re:What do you mean, "what happens next"? (Score:4, Insightful)
"Why would nvidia, AMD, Apple, Qualcomm, Ti etc switch to fabbing their stuff on inferior technology unless something were to happen to TSMC?"
Because la Presidenta will pee on them until they give Intel some of their business. Those companies, being sharp operators, will give Intel some toke business that they will not care about. la Presidenta will honk on wildly about how he "saved" Intel. Everyone wins.....until la Presidenta goes tits up, then Intel goes tits up as well.
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They're all "US companies"... the main corporate office is in the US.
Where is their stuff manufactured? Not on US soil... workers are too expensive! I'd bet they do the design and layout stuff here, e-mail it to someone overseas, they assemble it in India or Malaysia (for 1/2c on the dollar), and ship it here to be sold for 100x more.
Very little manufacturing is done on US soil these days... I think Electrolux still makes stuff in Greensboro, maybe. And, maybe a few cars are assembled here, but all those
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Taiwan is immaterial to la Presidenta and the Maggots he has surrounding him. When a trade "deal" finally arrives with China, China will eat the U.S.'s lunch. la Presidenta will whine incessantly he gets no credit for avoiding a war with China. Part of the deal will be that China gets Taiwan and agrees to sell chips to the U.S. at inflated prices. la Presidenta's "companies" will be cut in for their take. He isn't difficult to predict.
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Let's be honest, the CHIPS Act was already a mistake since it did too much to help Intel without doing enough for the also-ran foundries that Intel put into the dirt.
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More to the point, as President Trump controls financial, economic, export, and import levers -- especially as Congress has currently abdicated their authority and responsibility. What do you think he'll do to control Intel's share price, or just to keep it from falling below what was paid? Let me re-phrase that, what won't he do? You know, to preserve the "winning". This s bad idea and a slippery slope ... I thought Republicans were staunchly against picking winners and losers.
Re:What do you mean, "what happens next"? (Score:5, Informative)
Biden already allocated the money to Intel. This has nothing to do with your TDS
That was for grants, not shares / a stake in the company - there's actually a difference.
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That was for grants, not shares / a stake in the company - there's actually a difference.
Not anymore. The President is now the owner of ALL of America. Grants are a thing of the past. You must give equity in every transaction as the President is America. Nobody else matters.
Sounds a lot like being a King in previous centuries. Ah well. That is what we want; if we didn't, this wouldn't be happening. All of those corrupt fools are going to lose their mind when the figure out they can not fully control the King.
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TDS
Doesn't all the Trumpanzee Dick Sucking make your knees tired? To say nothing of your jaw.
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More to the point, as President Trump controls financial, economic, export, and import levers
To see how scary this really is, for "President Trump" substitute "financially illiterate (near) octogenarian" and for "controls [...] levers" substitute "world's largest economy". There must be at least some Republicans left who realise that playing Jenga with your economy isn't a good thing.
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With a guy who makes decisions solely based on who kisses his ass and what (he thinks) makes him look good.
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...President Trump controls financial, economic, export, and import levers
Those levers might as well be attached to a Fisher-Price Activity Centre, for all the thought and reasoning that the flailing man-baby puts in to pulling them.
Re:What do you mean, "what happens next"? (Score:5, Informative)
Republicans have never been a small goverment party and they've never been a fiscally conservative party either, at least not in the lifetime of most Americans. Just because they say they are doesn't mean anything.
Nobody expanded the power of the goverment like Bush and Trump. They also did a huge amount for the sake of expanding the size of our debt.
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They also did a huge amount for the sake of expanding the size of our debt.
Let us not forget Reagan and Trump's contributions to the debt.
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Only those two?
Haven't every single President (or, if you prefer... administration) pushed that debt further and further?
At this point, I don't even think draining every single US bank account would help (if you sucked the balances out). The 'national debt' has always been around and will always be around, regardless of who is in office, sorry to say. Would Harris have helped it?
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"Budget deficits relative to the size of the economy were lower on average for Democratic presidents."
https://en.wikipedia.org/wiki/... [wikipedia.org]
Would Harris have helped it?
Yes.
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Haven't every single President
Only the last 3. Clinton had reduced the debt after Reagan ran it up. Prior to Reagan, a balanced budget was seen as the norm.
Would Harris have helped it?
Maybe, if she started taxing the rich. The campaign was kind of mute or muddied on that. But even if she would have promised that, I would expect her not to follow through. Similarly to how Trump never followed through on his promise to tax the rich.
Re:What do you mean, "what happens next"? (Score:4, Interesting)
No, but mostly those two. According to AI, this is the increase in national debt for each president:
Clinton: 2.34% (avg 1.17% per term)
W. Bush: 105% (avg 52.5% per term)
Obama: 70% (avg 35% per term)
Trump: 40% over one term
Biden: 23% over one term
Until we default - then it doesn't matter nearly as much. Most people are worried about the principal of the national debt (as well all should), but it's the interest that could really sting. According to AI, the US has $9.2 trillion in debt maturing this year with an average coupon rate of 2.75%. Meanwhile, current interest rates are between 4% and 4.5%, so assuming this new debt to pay off the old is really hurting due to the additional (and likely compounding) interest.
She probably wouldn't have been able to help it much, but she wouldn't have signed the Big Bloated Bill which is expected to increase our national debt by another $4.1 trillion.
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We'll just print more money!
And, what happens when the US defaults (doesn't pay it back in time)... does Canada or Japan come and take us over?
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Re:What do you mean, "what happens next"? (Score:5, Interesting)
What happens when a "small government party" takes over a company and begins to micromanage?
You get Lemon socialism [wikipedia.org].
No one without a vested interest thinks this is a good idea.
The stuff the trump party is and has always been against, except when in power.
That was the past. Trump has transformed the Republican Party from the party of the bourgeoisie to the party of the proletariat.
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No one without a vested interest thinks this is a good idea.
Don't make me laugh, a whole bunch of morons without vested interest voted for this crap.
That was the past. Trump has transformed the Republican Party from the party of the bourgeoisie to the party of the proletariat.
LOL. So much illusion and ignorance about the actual stance of the Republican party about the economy on slashdot...
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LOL. So much illusion and ignorance about the actual stance of the Republican party about the economy on slashdot...
What is the stance of the republican party on the economy?
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A very wide one, as evidenced by many a bus toilet encounter.
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I thought Larry Craig was more fond of airports.
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That may well have been the case, but the wide stance of the trump party straddles policies from gutting completely legal and justified government services when they are an inconvenient restriction on their sponsors, to using the government to suppress constitutional rights when they perceive those as undesirable.
So it is indeed a very wide stance.
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This is a troll account better left to fester on its own. Feeding it only makes it fatter and louder.
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He didn't transform anything. He wasn't an aberration, or surprise. He's exactly what the right wing media machine has been priming you for for decades.
There is perhaps no more succinct word than "Bourgeoisie" to describe him. I know you've seen the way he decorates his palace, the way he treats his servants, and more important than all that: the suffering he's imposing, now, on the "proletariat" at large, people who've got nothing to do with him.
The way you prostrate yourself before him and shit all over y
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Trump has transformed the Republican Party from the party of the bourgeoisie to the party of the proletariat.
That's severely dumb. Trump did use the proletariat to get to power, but absolutely nothing he does now is to their advantage.
Trump is only serving big money.
Re:What do you mean, "what happens next"? (Score:5, Insightful)
Re:What do you mean, "what happens next"? (Score:4, Insightful)
Before Republicans became the Trump Party, they had ideological principles.
Did they?
That's a new one.
When was that, during the dubbya administration, when they looked Putin in the eyes and saw his soul?
During the Reagan administration, when they negotiated with the Iranians to keep the hostages so that they get a win?
During the Nixon one, which, you know, ended with a resignation?
During the Ike one, which ended in that famous "OMG we've been bought wholesale" speech?
Perhaps earlier?
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The most striking break with history is the bit where Nixon-level criminality used to be politically problematic.
Re:What do you mean, "what happens next"? (Score:4, Insightful)
No, they don't have principles, they are complete opportunists, which is the opposite of "having principles".
Besides, they are the worst kind of opportunists, the kind that always takes the fastest payout possible.
This is a major strategic weakness, because it makes them very predictable and easy to beat, as demonstrated by putin, who won over "America" basically by scratching the ego of her president. A very easy win.
But the most striking break with history is the weak Democratic "leadership", which wasn't able to offer anything in response to trumpism.
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During the Nixon one, which, you know, ended with a resignation?
Nixon resigning was the result of ideological principles. I think that this particular example was not the right example.
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It was a result of an incoming and unavoidable impeachment and not of "principles" as far as it concerned Nixon and the people behind him. Then they, the future Neocons, learned their lesson and began the work to destroy the rule.
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Yeah we all miss Mitt Romney so much.
Bullshit. They haven't had principles since Nixon (Score:2)
Windows bastards that pick Reagan as their figurehead took over the party that's when shit got real. The ones that Goldwater warned everybody about. But that goes all the way back to reagan. That's when the party gave up any semblanc
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but he did have principles
No, Nixon did not have "principles". He was a poor guy who was always ready to sell out for more money.
His political career started because he received money from a club of wealthy bankers to run what today would be called a "fake news" campaign against his Democratic opponent, Jerry Voorhis, making baseless accusations of the latter of being supported by "Communists" [wikipedia.org]. And once elected, nixon delivered to his sponsors.
In fact, Nixon was the same type of candidate that Reagan was, a pretty face without own
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Before Republicans became the Trump Party, they had ideological principles.
Technically true if read in a particular way, however; the Republican party lost it ideals in the late 70s and early 80s when Christo-fascist fuckheads started intruding in the halls of power.
I am not entirely certain how they kept their tax free status when they were so involved with the levers of power.
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What happens when a "small government party" takes over a company and begins to micromanage?
On top of everything else, government corruption is applied directly to the company's forehead, it fails, and the government officers that meddled become a lot richer.
Collective ownership of the means of production, Socialism, etc.
The stuff the trump party is and has always been against, except when in power.
This doesn't strike me as socialism in the traditional sense. It strikes me as a government led version of the venture capitalism that has ruined company after company over the past few decades. It's just that someone in the government, and I doubt very much it's Trump himself, sees the opportunity to make some cash on the back of a dying company (i.e. Intel) and they're willing to make it look like they're trying to help them out by buying a stake, then nickel and diming them as they flounder and eventuall
Intel will sue the Federal Govt'... (Score:2)
... when a more moderate administration takes office, maybe in ~3 years, maybe in ~7 years, or maybe when the statute of limitations for this type of crime is about to kick in, and they will get their money back.
The important thing right now for intel is to live as a going concern long enough to fight another day.
TSMC is investing (Score:2)
Not a Great Idea (Score:2)
What happens when the government takes over a commercial enterprise? First. all of its competitors have to compete against the government. Next, the government starts participating in strategic decisions within the company. This is the way industrial concerns are run in China. Do we really want to emulate that? We can only hope that Intel makes a quick recovery and the government divests itself of interest soon, as Obama did when he bailed out Chrysler/Stellantis.
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That's an interesting comparison I had missed. Good call.
Presumably the military needs decent chips fabbed on US soil. Doesn't have to compete with AMD or Samsung in the PC CPU market.
GF bought IBM fabs, TI isn't relevant, TSMC is just coming online but is still controlled by Taiwan. Is Motorola/Freescale around anymore?
With an engineer in charge maybe Intel stands a chance of a rebound. Competition is good so let's hope so.
I haven't bought an Intel desktop or server chip since 2018 but plenty of their low
Re: Not a Great Idea (Score:2)
Which part? The GDP growth part or the totalitarian part? Ask plenty of people, and they'll say we're already getting the totalitarian part; it'd be a shame not to get some material benefit while we're at it, no?
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Republicans used to complain about how China operates but now they're alright with emulating it as long as they're the ones in control.
14A? (Score:2)
Just so we're all clear... 14A means 14Angstroms? That translates to a millionth of a micron, am I reading that right?
My big tower is a Threadripper 3960x... that's 7nm.
What the bloody hell are they making at that size? I could see some interconnects at that size... cache to core... but the whole kit-and-kaboodle, no friggin' way.
I think the bond wires are bigger than that.
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Not really true. Don't be fooled by marketing.
Intel 7 is a rebrand of 10 Enhanced SuperFin (10ESF). That is a node that is a refinement of their tragically-failed 10nm node. 10nm nodes included 10nm, 10nm+, 10SF, and 10ESF. Intel renamed 10ESF to Intel 7 without changing anything in hopes that no one would notice.
They also renamed their 7nm node to Intel 4. Intel 3 is a refinement of 4.
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Yes, I intended to add more but needed to find a reference, like Wikipedia: 7 nm process [wikipedia.org]: "Since at least 1997, the length scale of a process node has not referred to any particular dimension on the integrated circuits, such as gate length, metal pitch, or gate pitch, as new lithography processes no longer uniformly shrank all features on a chip. By the late 2010s, the length scale had become a commercial name that indicated a new generation of process technologies, without any relation to physical propert
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It's just a name. It doesn't necessarily mean that 14a has any transistor dimensions measuring exactly 14 angstroms. Most node names have been marketing for awhile.
Also your 3960X is on N7 which was definitely not a 7nm node, despite the name.
You'll have to do some digging to find actual transistor density figures for N7 and more-recent nodes to get an idea of how dense they're getting relative to N7.
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I know... there's no possible way to make anything on the Angstrom level. If there was a whole process that could fab a chip at that scale... I would love a peek under the hood!
I know my beast isn't 7nm (should it be nM... my understanding is nM would be nanometer... nm would be like nanomillimeter) per core or die (if the entire 24-core die was 7nm... I sneeze and the entire package flies into a corner... although, I'd wonder what that 7nm is referring to... a single transistor or an interconnect or who k
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should it be nM... my understanding is nM would be nanometer... nm would be like nanomillimeter
I think you need to take a refresher course in SI units. A meter is always a lowercase m. Then you had the scaling prefix in front, giving units like km, mm, nm. Prefixes are defined for the range of 10^-30 to 10^30. The same prefixes are added for other units (some are used more than others). For example, s, ms, ns... you could have a ks, but I have never seen it actually used (I am sure there is someone, somewhere who uses it...).
Again if this administration wasn't so corrupt (Score:4, Insightful)
And yeah Intel gets a bail out. If they go under we only have one viable x86 CPU manufacturer and like it or not virtually every single work computer on the planet runs off x86. There are a handful of people running Macs mostly for web programming or a handful of specialized animation tools.
It's the same reason we got stuck bailing the auto companies out. We need their capacity so we can't let them go under.
These companies know that and they are abusing it. That's why buying a stake would be a good thing. Normally.
We passed normality around the time a guy with a Nazi iron Cross got appointed to head the military because he was the only one that will order troops to fire on American citizens...
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I much prefer the government buying stock in a company instead of just handing my taxpayer dollars to it with no strings attached.
I don't. I prefer the government not have a voting say in how a company operates. If they want to influence they should do so on an industry level with a policy. 10% stake is a MASSIVE amount of power for a government to dictate business direction.
If you weren't afraid of FBI backdoors in Intel processors before ...
Then don't take the money (Score:2)
As for influence if you don't think giving somebody 50 billion dollars in free money doesn't get you some influence I don't know what to say. The whole reason Intel is building anything in this country is that cash money influence. All buying stock does is formalize it into ownership.
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The grants did have strings attached.
The US is in a position where it has a policy objective - keeping chip manufacturing in the US (or in the case of auto-bailouts, keeping car companies in the US). There are multiple ways one might conceivably create policies to achieve the objective (and of course some combination of these can be used and without a doubt I've missed options)...
* The government is a larger purchaser. It could require that the chips it buys be made in the US. This can be complicated... mos
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.... like it or not virtually every single work computer on the planet runs off x86. There are a handful of people running Macs mostly for web programming or a handful of specialized animation tools.
You must have some big hands. Apple shipped over 22 million Macs in 2024 [idc.com]. MacBooks seem to be popular at universities.
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I much prefer the government buying stock in a company instead of just handing my taxpayer dollars to it with no strings attached.
LOL, fuck you. I will not bear water for a government that owns the means of wealth. Go live in a different country you fucking asshole. You do not belong in America and your opinions are not the opinions of Americans. Go away.
What? (Score:3)
So, are the CHIPS Act grants really grants or stock purchases?
"According to The New York Times, some bankers and lawyers believe the CHIPS Act may not allow the government to convert its grants to equity, opening this deal to potential legal challenges."
So, if the US can convert its grants to equity, does this apply to TSMC as well as Intel?
Or it this just more extra-legal daydreaming on Trump's part, daydreaming that has practical value for Trump because the Republicans have seized control of the judiciary.
This could actually work... (Score:2)
Put the right guy in charge and force the board (and the shareholders) to accept the kind of "short term pain for long term gain" repair plan that the previous guy was planning to do before the shareholders decided they only cared about "share price go up" and short term returns and maybe Intel can actually survive.
White House burglar (Score:2)
It converts federal cash into stock certificates that Trump can steal. That's the only purpose of this deal. Well, it's also looking like he'll demand 9 $billion of certificates for 6 $billion of cash. So he steals from the people and from Intel: He spends time being stupid (and obviously, most o
does that means Americans own Intel (Score:1)
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The biggest takeway from the 10% stake in Intel (Score:1)
If you buy Intel, you finance American fascism.
Don't buy Intel.
Just Stahp (Score:2)
Please quit pretending that this is a "stake" in the company. It's simply handing the billionaires yet more to stick in their pockets. Well, you might say, that the money trail goes right into R&D, or building a new factory, so how is this a typical Republican hand out? Look at any state lottery. Here in Illinois they justified the lottery by saying that all the money will go to education, and then cancelled all other existent funding. Same here. The execs will give themselves more billion bonus t