This award isn't about innovation, the best way to do things, or job requirements.
This about supply chain security and national defense. So many of our components are made overseas and under governments who are not close allies. This is in order to operate things in our country.
When you have the FABs in the US and under US control you can handle international foreign policy and the security of the nation differently.
The chip supply chain is a lot shorter and more concentrated than the mining supply chain. If you're thinking of "rare earth" metals in particular, it's probably better to focus on the refining rather than digging out of the ground. Between South America, West Africa, and Australia there are lots of mines for most of the metals, but only refining in China (because it has been highly subsidized by both monetary and regulatory means since the 90s). Silicon refining is similarly bottlenecked even though the high quality input material is mostly US sand.
Refining is dirty and dangerous so it has been pushed out. Used to work for a Canadian gold mine in Montana in the mid 90's. Most of the friends I graduated with went overseas for new mines or were Environmental engineers focused on cleaning up messes from the late 1800's early 1900's.
What's a few inland lakes of acid residue toxic metal soup along with tailings piles classified as low level radioactive waste between friends though?
These are still being created today, not just as a practice from the 1800's.
It is the price of technology, better to address these as we progress rather than pushing them out of mind and sight and kicking the can down the road for future generations.
There's substantial wafer capacity in the US, from silane production, through polysilicon granule production and wafer making. There are several different wafer makers in the US with both 200mm and 300mm wafer capacity.
Some of the silane and polysilicon companies are US owned, but I don't think that any of the wafer makers are US headquartered anymore.
We HAVE have to focus on the rare earth part or you are basically just giving China the whole thing as they control more then 90% of refinement (and almost all of mining)
Fair enough. But then the question is: How did this happen in the first place? If the Pentagon is playing out scenerio after scenerio after scenerio, how did we allow ourselves to be so embarrassingly venerable?
And now the taxpayer is on the hook for $8.5B and growing?
This is way bigger than trade policies. Intel was the world leader in chip-making until fairly recently. Steve Jobs wanted them to build the iPhone chips because they were a generation or two ahead of any other fab in the world. Today, Intel is no longer leading the world in chip fab process.
Intel at the time wasn't interested in fabing ARM chips, and the rest is history.
Intel and American fabs fell behind for a number of reasons. Some of it is tied to our education system and the kinds of people we are training. Some of it is probably related to Intel turning their nose up at the iPhone chip making, losing billions upon billions of money they could have put into R&D. Some of it is a story of American corporate culture not innovating enough.
> Intel at the time wasn't interested in fabing ARM chips, and the rest is history.
Fun fact, in the late 90's, Intel was the biggest manufacturer of ARM chips. I was there at the time, and I wrote lots of software to aid in their design.
What happened to Intel was twofold: The first problem was that Robert Noyce, Andy Grove, And Gordon Moore died. Each one was a once-in-century intellect, and it took Intel a while to be able to find somebody who could remotely fill those shoes.
The second problem was Intel was making so much money on x86 chips, that dedicating any fab capacity to anything else--including chips for Apple's iPhone, would for years have had such a huge opportunity cost, that the shareholders would have sued, and with cause. Because literally (not metaphorically) anything they would have manufactured instead would have had a drastically lower profit margin, and the stock would have tanked.
I suspect that the only reason Intel made a foray into ARM chips in the first place was to head off anti-trust accusations, and once the political heat was off, they dropped them like they were hot.
By the time the market shifted, almost a generation of mediocre management had left Intel less paranoid, and therefore, less likely to survive.
> would for years have had such a huge opportunity cost, that the shareholders would have sued, and with cause.
I've been considering the Intel issue (had family there) and the other post in the thread mention the decade of misses.
This actually seems like one of the most reasonable rationales that I don't hear mentioned very often. You might want to do something, yet your hands our tied, because the investors will sue for poor leadership.
I don't think it was that Intel didn't have enough capacity to manufacture more. Intel was a manufacturing-first company that beat out "high end" and specialized competitors by economies of scale. Over the long term, the strategy was to build as much high performance silicon as possible.
The problem looks like they went down the typical dinosaurification route that their vanquished high end competitors the likes of DEC, Sun, HP, SGI, IBM, etc., which was to switch from manufacturing as much as possible, to protecting high margin x86 parts. Their x86 PC and server organization out-muscled their manufacturing organization (either that or finance did), and so the ended up being very reluctant to adopt GPGPUs or ARM mobile because those were a threat to x86. By the time they realized they'd missed the boat in those markets, they put out these ridiculous x86 mobile cores and x86 GPGPUs that were costly failures.
This pattern of protecting profit margins on high end products while fixed costs every generation increase and performance increases so low end grows up and erodes high end, causing further retreat and protectionism, is exactly what happened with those aforementioned big iron companies. When the bean counters look at the state of things without an understanding of the technology trends, that's the logical thing to do, but they paint themselves into this corner.
Intel might have just been saved by the bell with Dennard scaling breaking down around the time they were losing their manufacturing advantage. That meant that instead of competitors on a generation or two process lead wiping the floor with them as they did to the minicomputers, it was a much smaller disadvantage and they've been able to somewhat hold on.
It seems that what happened to Intel was a lot worse than just missing Andy Grove's paranoia...
- They missed the mobile market
- They missed the gaming market
- They missed the AI/ML market
- They got multiple generations behind TSMC and Samsung in the fab business
- They lost a whole bunch of market share to AMD, including datacenter
The NY Times article is paywalled, so I can't read it, but I have to wonder what kind of fabs they are meant to be building for our (taxpayers) $8.5B ? I wouldn't have any faith in them building a SOTA fab at this point.
Actually, Intel has been consistent with their specialized CPU DNN libraries and whatnot for years. MKL and the likes are pervasive in modern deep learning stacks. Pretty sure they've captured as much of the AI/ML business as CPUs possibly can.
Also, by gaming do you mean gaming consoles or gaming PCs? Because Intel is popular in gaming PCs also.
Sure, but those are CPU libraries, but what has grown NVIDIA into a $2T company wasn't building CPUs - it was building processors specific to this new and exploding field of ML/AI, which grew out of them building processors (GPUs) specific to the growing field of realtime PC-based gaming...
Is the problem that Intel saw themselves too narrowly as in the CPU business rather than as in the compute business? I've no idea - it'd be interesting to hear the inside story of how all these missed opportunities went down.
You're missing the point - it's not about comparing Intel to anyone else, but rather about Intel's missed market opportunities. They make processors but missed all the new market opportunities for processors.
Any Steam hardware survey (the most relevant for gaming PC contexts) will show Intel handily beating AMD at around 66% to 33% for CPU[1], so your claim that Intel is somehow not popular is bunk.
Intel doesn't have and has never had a GPU line worth writing home about, so I don't know why you would bring up something Intel never had to say Intel is unpopular in gaming PCs.
They missed the GPU market (AI/ML/Gaming) and the console market. Hence they lost all of that to Nvidia and AMD. Both of those companies now have a bigger market cap than Intel.
How is this so difficult to understand? It is very simple, not obtuse, unless you are autistic.
Nvidia market cap is $2.26 Trillion.
AMD market cap is $290 Billion.
Intel market cap is $178 Billion.
AMD and Nvidia used to be a tiny fraction of Intel.
You guys are getting autistically stuck on this irrelevant detail about CPU popularity in gaming PCs and missing the bigger topic of the discussion. But even in that niche, Intel has lost significant market share to AMD.
2. And when Andy Grove was at the helm, Intel did not miss opportunities like that. E.g. when Intel's memory chip business started losing market share to the Japanese (who were at the time a low-wage country), they were able to transition to CPUs in time.
Yeah, but what I meant is that these can't all be explained by not being paranoid (letting the competition creep up on you), or even by not having an exceptional CEO.
If you are in the business of making CPUs, and obviously aware of how fast things move in the tech world, then how can you not be aware of industry trends going on like smart phones, gaming and AI? If you are somehow late to see the trend then double down and catch up. What about getting behind on process nodes/generations? This used to be one of Intel's core strengths, and you'd have thought they'd have institutionalized the things you do and don't take on in a new process to keep the change manageable.
So, I wouldn't say it just a matter of not having Andy Grove - it seems like a matter of having incompetence at many levels.
This is exactly what it is. With the added issue that, in all likelihood, $8B is not even enough to start making a change. The US gov would have a better time giving these $8B to startup companies in the chip space. Intel will just squander this money and give some of it to shareholders.
It's also interesting that Intel made some specific bad technical choices.
(ie, not investing in EUV, assuming SAQP would work forever, ignoring the consequences of everything being power-limited...)
This kind of decision is hard, because it's a technical-economic tradeoff, and the latter is more voodoo than math. And that's not even addressing whether you get surprised by things like the LLM boom...
> It's also interesting that Intel made some specific bad technical choices.
That's like saying Saudi Arabia made some bad policy decisions. If you are in Saudi Arabia, nothing has a higher return on investment than petroleum. If you invest in anything else, you are leaving money---A LOT of money--on the table.
The result is that capital is drained out of any other business, and the country gets so dependent on just one industry that when the oil runs out, it is a major crisis.
Put yourself in the place of an Intel CEO. You've just invested $4 Billion in a fab. People will by absolutely every single x86 chip that fab will make ~$40 billion over the course of the technology node's life time.
Or, you could make chips for the iPhone, which maybe, perhaps would be a hit? And even if Apple's wildest projections come true, you'll make $8 billion instead of $40 billion, because Apple is not going to pay for Intel to pocket a 90% profit margin, when it could just go to TSMC.
So you are a CEO, and wondering how on the next earnings call you are going to justify turning an asset worth $40 Billion into one worth $8 billion....
What would you do? Build two fabs and make $48 billion, or build two fabs and make $80 billion?
It might be hard to remember now, but Intel was in the position NVIDIA is today: they could sell absolutely every x86 processor they could make, at pretty much any price they cared to name.
So even if Intel could have built another fab (which, btw, it couldn't, the world only graduates so many solid-state physics Ph.D.'s per year) but even if they could, they would STILL have used it to make x86 chips. Literally (not metaphorically or hyperbolically) nothing else they could manufacture would have as high a return on investment as making x86 chips did.
I don’t buy this completely. AMD’s 64-bit humiliation of Intel wasn’t that far in the past, and they knew GPUs were important. They could have hedged their bets a bit more on the basis of sound business management without incurring shareholder wrath.
Google/Alphabet and Facebook/Meta sunk billions into ventures that aren’t half as profitable as your hypothetical 8B deal, and shareholders haven’t sued yet.
Of course the founders have majority voting shares, but that doesn’t prevent them from being sued. It only prevents them/their designated CEO from being fired.
Theres a few differences between Intel and Google here. The first two points are from Peter Thiel:
1. Google really didn't know what to do with its excess money, which was why it was just stockpiling it and not using it to invest in its own business.
Intel, by contrast, always knew (at least in the Noyce/Grove era) what to do with its money.
2. Google's "side projects" were false-flags and smokescreens to make it look like it wasn't a monopoly. (Thiel says it much better himself in his article and speech titled "competition is for losers"-highly recommended).
Intel did a similar thing around the turn of the century, when it started making ARM chips--not because they were the most profitable thing they could be doing but because they didn't want to look like a monopoly.
And, of course, you really hit the nail on the thumb here:
> Of course the founders have majority voting shares
Yeah. The executives of google and facebook just don't face the same accountability from the shareholders that the execs of any honestly-governed public company does.
Its a two-edged sword: if google or facebook needs to spend a lot of money to pivot, they have the flexibility to do that in a way which other companies don't. However, the flip side implication is that, e.g. Zuckerberg can just spend $10 billion on a huge project, without being at all held accountable if it fails.
Right, and the ironic thing is that the founder having majority voting shares was allegedly justified by the idea that it would solve the innovators dilemma by not having the founders ("proven" capable of building successful products) being accountable to the short-term whims of the shareholder.
That said... my original point was that the shareholders don't sue in such situations. Rather, they just vote out the board (and hence CEO). If they could sue the board/CEO for not making as much profit as theoretically possible, they would have already sued Meta or Alphabet already despite having only minority shares. Proving to a court that the board/CEO isn't acting in the shareholder's best interest isn't as easy as comparing the projected returns of two mutually-exclusive deals -- they can argue that the ostensibly less profitable deal actually has great long term benefits.
I was a physics student who took a nanofab class, fell in love, and desperately wanted to go down this path... until I learned about how complete and utter dogshit the wages were. I kept in touch with two classmates who stuck with it a bit longer. The free market had to beat them over the head a bit longer to get them to let go, but it eventually succeeded. Intel was absolutely printing money for investors the whole time, of course, and now that the material consequences of their poor management have come home to roost they are getting bailouts. Yay, capitalism!
Our education system over-produces qualified scientists, but if semiconductors are a road to not having a house or family and if it pays 5x better to sell ads or stocks... you get what you pay for.
Perhaps. But the more likely correct answer is: The MIC doesn't make chips. They couldn't and wouldn't push for something that didn't deepen their pockets.
Similar mistake is being made right now by restricting sales of chips. It forces people to make their own. It is just a matter of time the consequence comes … like many other decisions made by some big wigs before …
Absolutely correct; same for banning any other tech sales to China. I’m not sure it’s terrible policy, though. It’s only speeding up the inevitable a little.
The pentagon is run by politics just like the rest of the country. The US wanted to move industry to other countries, so the Pentagon just played the party like they're used to do, and got the promotions and bonuses. Everything else is a second thought.
It is a joke but it's also true. The entire Japan South Korea Taiwan situation is at a high risk, if actual conflict breaks out, Taiwan is out, and SK and Japan become trickier on shipping insurance costs alone, assuming they choose not to get involved (they probably will)
Japan cannot get involved unless the US is directly attacked, their constitution and laws governing use of the JSDF are very explicit in forbidding any use other than defending themselves or the US.
If (when?) Taiwan gets China'd, that by itself cannot serve as a casus belli for Japan.
I have no intimate knowledge with regards to South Korea's laws and will thus refrain from commenting there.
>Japan cannot get involved unless the US is directly attacked, their constitution and laws governing use of the JSDF are very explicit in forbidding any use other than defending themselves or the US.
Japan can change this on a whim with one meeting of the legislature. You think Japan can't change its own laws?
>If (when?) Taiwan gets China'd, that by itself cannot serve as a casus belli for Japan.
Wrong. I don't know that they would, but Taiwan is a huge trading partner and great friend of Japan, in fact Japan's closest friend in the whole region. It's quite conceivable that Japan would get involved.
All that shit is irrelevant. The prime Minister of Japan is actively talking about defending Taiwan if it's attacked. The people of Japan probably won't complain. The US won't complain. South Korea won't complain. And that's not even counting a casus belli that might make it justifiable (e.g. some Japanese citizen in Taiwan gets harmed, or chind sends missiles to US based in Okinawa)
What exactly do you think is the punitive remedy for Japan breaking clauses in thosd documents in that political scenario?
Laws are just words on paper. They are irrelevant without people to follow and enforce them.
It is very common for Constitutional laws to be suspended in the event of war. Even without suspension, all it takes is a leader with enough support to ignore the law.
Nearly all Prime Ministers and their cabinets in recent history have suffered overall unpopularity and especially so in anything that might even remotely imply the potential for using the JSDF beyond its nameplate purpose.
Which is to say, no: No Japanese leader has had the kind of support necessary to ignore the law.
A militarily powerful China has also never attacked Taiwan before, so you're on sketchy ground asserting a prediction of popular support based on historical precedent.
China would attack US bases in Japan and that would trigger whatever needs to be triggered for Japan to enter the war. There’s no way that China would try and invade Taiwan while also not trying to stop the US from intervening.
I mean, if we are going to assume “China attacks Taiwan” means “China attacks US bases in Japan” we might ad well assume it means “China preemptively carpets Japan with nukes rendering any Japanese response irrelevant”, but in any case, no one is arguing that Japan would either not react to an actual attack on Japan that left them capable of response or would require Constitutional changes to do so. But “Japan” and “Taiwan” are still different things.
Since the US would come to the defense of Taiwan, it would use assets in the region so that includes naval and air assets. The air assets are based in locations such as Guam and Japan (among others). The US would launch sorties from those bases amongst others.
Can you think of a scenario in which China would attempt the worlds all-time largest amphibious invasion of Taiwan and then let the US just fly missions and drop in supplies or attack Chinese assets and not respond to the bases themselves? It seems incredibly unlikely to me.
There aren't any nukes that need to be involved here. Certainly there are potential scenarios in which those do get used, but neither the Chinese nor Americans have any strong desire to escalate a conventional war into a nuclear war. The scenario you are assuming would also include China and the US nuking each other and so that scenario itself is a bit silly whereas China attacking US air bases in the lead up to or during an invasion of Taiwan without escalating to nuclear weapons is a pretty serious scenario.
I get your point about Japan not being able to change their constitution so quickly and I don't disagree, but I think any scenario in which Taiwan is invaded and the US comes to its defense will drag Japan in to the war sufficiently enough that it will justify whatever it needs to do.
The US will never come to the defense of Taiwan. The US and China will never go to war with each other. Nuclear powers do not fight each other directly, they do it through proxies, like we are doing with Ukraine vs. Russia.
The U.S. might send money and materiel, they might get the U.N. to issue statements, but an actual shooting war between China and America? Forget it. It will never happen, because if it did happen, life would not be worth living anywhere on earth for the next 50,000 years.
And even sanctions are highly doubtful. Personally, I really like being able to design a circuit board and get it fabricated and shipped to my front door from China for $25. And massively interrupting the trade flow between China and the U.S. would lead to a world-wide depression which would make 2008 and the great depression look like boom times.
Surely Taiwan knows this, and I suspect that is why TSMC wants to build fabs outside of Taiwan.
This about supply chain security and national defense. So many of our components are made overseas and under governments who are not close allies. This is in order to operate things in our country.
When you have the FABs in the US and under US control you can handle international foreign policy and the security of the nation differently.