Friday, February 10th 2017
On Intel and Their $7B White House Affair
By now, we've all seen, or at least heard, about Intel CEO's Brian Kraznich Fab 42 announcement (done from the Oval Office, no less). It was to be a joint press conference to announce a highly impactful investment on U.S. soil, which also turned into some welcome PR for Intel, and got the CEO some face time with the President.
It has to be said though, that hailing this as a Trump administration win is simply politics doing its best: spinning the truth for its own benefit. I say this because the original announcement for the construction of this Arizona fab was done way back in 2011, with then Intel CEO Paul Otellini breaking the news that they would spend $5 billion on the plant during the Obama Administration. Construction started that year, with overall expectation for its completion being somewhere around 2013. Cue the usual delays, and enter 2013's 10% decline of the PC market, and Intel did what any sensible company would do in the wake of lower expected volume of shipments (and respectively lower production needs) - they postponed the opening of the factory, indefinitely, instead choosing to improve manufacturing capability of its then already-operational fabs. So, the factory wasn't announced because of President Trump's policies and overall government acumen, nor is it probably going to be finished by the time his first term ends.
Krzanich didn't make this announcement because the "tax and regulatory policies" of the Trump administration are "advantageous". Kraznich did it in a show of force and open support for President Trump (as Kraznich has a past of doing), and if there's one thing we know of Intel (and every other major corporation focused on profit) is that everything happens for the bottom-line. The question of "why now" isn't answered with "because of President Trump's policies". It's answered by Krzanich's internal memo to Intel employees: because growing demand means Intel must increase production capacity. A sign of the times is the fact that the Arizona fab was originally projected to push Intel's 14 nm manufacturing capability, but has now been re-purposed as an accelerator towards Intel's 7 nm aspirations.
Although it has to be said, as President Trump himself would, that Arizona workers will be very happy: 10,000 jobs is a whole big number - full of zeroes. Arizona is second only to Nevada in overall population growth rate, and job creation is one of the most important economic growth factors. Though that's not the real number of workers: that's the best-case scenario. The real number of direct jobs to be created by this investment is around 3,000, with up to 10,000 jobs being created "in support" of the factory, as Kraznich himself put it (such as new businesses opening to support the infrastructure and the increased number of employed workers).
In fact, President Trump's administration hasn't even made a concrete, thought-out move towards tax breaks on American companies, though he did promise a 15% reduction in taxes while campaigning. So far, the only thing they've done on that camp is freezing new and outstanding regulations to fall into place, as well as adopting a purely "less is better" approach to tax regulation: for every new tax regulation, cut two previously existing ones".
Now personally, I find it to be extremely disconcerting that President Trump's administration has the most clearly-defined trend of donations having bought top spots in the Trump administration, in what can be called influence peddling, even avoiding such boresome proceedings as ethic reviews for conflicts of interest.
All in all, I just think these are way too many coincidences to be just that. It seems simply as just yet another pivot, another case of one hand washes the other in the cutthroat world of corporate interests and political favor, of chess played (and paid) with billions. Let's face the proverbial elephant in the oval office: Intel's announcement is a complete farce, being indicative of an unhealthy balance of powers between those that be at the White House and corporate interests.
I understand how negative all of this sounds. But every case must be considered as-is, and this one simply isn't. There are healthy, transparent, strengthening bonds that a government can have with the corporations that are the lifeblood of its economic development, which positively impact the every-man's life. Tax cuts may be one of them, by increasing the amount of leeway a company can have on its own internal investment, R&D, increased employment and better conditions for its workforce. Government subsidies, which propel promising startups which then grow on to provide new, competitive businesses and thus reinforce the economy - of which Intel has received at least $5.9 billion dollars itself, from tax rebates to federal grants, including almost $100 million in property tax immunities (while AMD itself has received only about $11 million). Another good example is how governments supported what were, at their infancy, extremely low-margin business (like the solar panel and renewable energies companies), eventually ushering us all into developments that will only improve the quality of life for us and our children.
There are ways of doing things; both President Trump and Kraznich may even know how to do them, and have certainly done some of them before.
But then, then there are ways of how not to do things.
It has to be said though, that hailing this as a Trump administration win is simply politics doing its best: spinning the truth for its own benefit. I say this because the original announcement for the construction of this Arizona fab was done way back in 2011, with then Intel CEO Paul Otellini breaking the news that they would spend $5 billion on the plant during the Obama Administration. Construction started that year, with overall expectation for its completion being somewhere around 2013. Cue the usual delays, and enter 2013's 10% decline of the PC market, and Intel did what any sensible company would do in the wake of lower expected volume of shipments (and respectively lower production needs) - they postponed the opening of the factory, indefinitely, instead choosing to improve manufacturing capability of its then already-operational fabs. So, the factory wasn't announced because of President Trump's policies and overall government acumen, nor is it probably going to be finished by the time his first term ends.
Although it has to be said, as President Trump himself would, that Arizona workers will be very happy: 10,000 jobs is a whole big number - full of zeroes. Arizona is second only to Nevada in overall population growth rate, and job creation is one of the most important economic growth factors. Though that's not the real number of workers: that's the best-case scenario. The real number of direct jobs to be created by this investment is around 3,000, with up to 10,000 jobs being created "in support" of the factory, as Kraznich himself put it (such as new businesses opening to support the infrastructure and the increased number of employed workers).
In fact, President Trump's administration hasn't even made a concrete, thought-out move towards tax breaks on American companies, though he did promise a 15% reduction in taxes while campaigning. So far, the only thing they've done on that camp is freezing new and outstanding regulations to fall into place, as well as adopting a purely "less is better" approach to tax regulation: for every new tax regulation, cut two previously existing ones".
Now personally, I find it to be extremely disconcerting that President Trump's administration has the most clearly-defined trend of donations having bought top spots in the Trump administration, in what can be called influence peddling, even avoiding such boresome proceedings as ethic reviews for conflicts of interest.
All in all, I just think these are way too many coincidences to be just that. It seems simply as just yet another pivot, another case of one hand washes the other in the cutthroat world of corporate interests and political favor, of chess played (and paid) with billions. Let's face the proverbial elephant in the oval office: Intel's announcement is a complete farce, being indicative of an unhealthy balance of powers between those that be at the White House and corporate interests.
I understand how negative all of this sounds. But every case must be considered as-is, and this one simply isn't. There are healthy, transparent, strengthening bonds that a government can have with the corporations that are the lifeblood of its economic development, which positively impact the every-man's life. Tax cuts may be one of them, by increasing the amount of leeway a company can have on its own internal investment, R&D, increased employment and better conditions for its workforce. Government subsidies, which propel promising startups which then grow on to provide new, competitive businesses and thus reinforce the economy - of which Intel has received at least $5.9 billion dollars itself, from tax rebates to federal grants, including almost $100 million in property tax immunities (while AMD itself has received only about $11 million). Another good example is how governments supported what were, at their infancy, extremely low-margin business (like the solar panel and renewable energies companies), eventually ushering us all into developments that will only improve the quality of life for us and our children.
There are ways of doing things; both President Trump and Kraznich may even know how to do them, and have certainly done some of them before.
But then, then there are ways of how not to do things.
199 Comments on On Intel and Their $7B White House Affair
I live in a social-democratic monarchy, challenging ideologies is part of our childhood, not a reason to scream at people.
I am a fiscally conservative social Democrat, my significant other is a communist and my best friend is a conservative libertarian, and we get along just fine...try to do the same, screaming at people will just increase the divide.
I love this site and I enjoy all content that is presented in such a thoughtful way.
Signed,
Mark Little
(I sign my name as I am not afraid to listen and understand the world without hiding behind aliases)
Intel's stock went up about 10% since election day so investing that surge in 7nm seems like a no-brainer.
Altogether it was a happy coincidence for both sides (American jobs for Trump and cheap advertising for Intel).
Romney was right about a lot of things. His problem was that inconvenient truths (e.g. that 47% of the population will never vote for Romney) are politically incorrect. And look what that got us four years later: the most politically incorrect president in US, nay, world history! :roll:
Good points, short term over a few years Obama won it seemed, but whole party lost...and now they got a president they can't handle and has no political ties and zero political correctness...hence why they are in literal meltdown, panic, and all out destroy-everything-in-their-path-AKA Berkeley college-riot loot and burn mode.Arrogance and condescension much? First off, my humble opinion it's tough to separate liberals from political assholes generally, the two are sadly rarely mutually exclusive and more like mutually inclusive:), or mutually concordant if you want a proper antonym. Second "let me break it down for you" such arrogance is seldom shown from someone confident of their position and words. Also I agree a lack of respect isn't exclusive to liberals as a "liberal disease", but I do think "liberalism disease" would be much more accurate using only those two words with no prepositions etc.
Then saying you worked at a newspaper, and runner up to this OP then saying you know more than everyone about journalism ethics is more self aggrandizing while talking down to those who disagree...why not leave that shit out and just make your case not tell us how you know all that we don't?
That is my point here, it isn't JUST that I think you're wrong, it's you are doing it in a pompous manner while making snide remarks...like stupidly asking me something like "Are you new to politics?", or "You do realize Intel is a tech company no? " etc. I really don't care if you or anyone shits on me or gets sarcastic, all good, but no offense that is childish and just unintelligent and only detract from what you are trying to say...capiche?
Also it's "exaggeration" not "exageration" as you said, and "triggerable" isn't a word though I'm sure you realized that and just used it to make a point. However my point is as you claim you are the resident self-appointed guru of all things journalism and those who argue with you automatically know less than you, and as you make grammatical mistakes as well as other journalistic malpractices while talking down to all of us implied dunces is fairly delicious irony.
I make plenty of mistakes, I make argumental faux pas and "gasp" I misspeak, and I never claimed I was smarter than you or know all things journalism and English language...that's how you are presenting yourself in your words, tone and argument.Looking in a mirror perhaps? I thanked this response because it was humorous I'm sure you meant to call me useless but your ability to use English is such shit you weren't even clear and by quoting Rockarola and saying "this" person is useless etc you don't even clearly distinguish who you mean.
Labeling an article as commentary, opinion, nor editorial excuses the application of good journalistic ethics. Case in point: think of how making such a statement would reflect on TechPowerUp.
An editorial caused a massive exodus of users (including me) and moderators from Hardware Analysis.
It is and is pretty common in programming (Source Engine example). That said, Oxford English redirects to "triggering" and Merriam-Webster does not consider it a word.
At any rate, we all should admit we got a bit aggressive in writing style here. I think that's a big problem with american politics in general right now. I won't deny I did it, as it happens. Fact is, a good portion of americans (lol here come my stereotypes) have a bit of a way of thinking "I'm right and everyone else can suck it." It's something I'd argue we all need to work on as a nation. Can we agree on that note? ;)
PS: I don't know more than anyone here about all things journalism. Many here, Raevenlord included, likely know more than my skillset. But I do know more than someone who hasn't worked in the field, I'd wager.
Mods lock this thing up already. Please! Remember this one?!
www.techpowerup.com/forums/threads/ebola-and-you.205451/
If this is left open I want my discussion of nuking west Africa back open. Its about as a legitimate as this crap.
www.cbsnews.com/news/latest-trump-news-today-february-16-2017/The guy has seriously been in office just a month. Congress moves at Congress' pace. Trump is also not a legislature so authoring bigRemember Soyndra? The problem with subsidies is they require good government management and oversight. The government isn't good at managing anything except Congress' own compensation rates (not good for taxpayers, mind you). Look at the stock markets around the world. That is investment personified: private investment. Tesla, Google, Apple have done great because investors are confident their products will do well. There's also angel funds and the like where if you have a good idea, a private investor may bet on you succeeding. Because of the bipartisan JOBS Act, unaccredited investors can now invest as well and startups like Fig are leading the charge.
TL;DR: The role of government is safety nets for its citizens, not corporate welfare (a populist note Trump and Sanders were playing).
That said, there are projects government needs to invest in because the risks are too great for private research. Examples include the Manhattan Project and Apollo program. We could really use a massive government R&D investment into fusion energy.
More reason to concentrate on Tech and Facts.
Might not rise to the level of nuking Ebola but hey....I will say " I don't need a reminder" is fairly rich coming from one who reminded all of us of what you know versus what we don't.Agree with most of this...this article wouldn't have even gotten my or many peoples' notice if it didn't 1. mention prominently Trump by name, and 2. having the editorialized text GT90 crossed out which made it blatantly obvious it was a rub on Trump, while at the same time trying to prop up Obama when he nor Trump needed to be mentioned prominently in this article at all to get point across....unless, the OP simply wanted to become a political hack and pick sides and swipe at the current president and unsuccessfully (big league unsuccessfully) disguise it as an "editorial". Particularly since I will reiterate for 8 years TPU never mentioned Obama whatsoever even when this initial story started.
President Obama Visits Intel: CEO Paul Otellini Announces New U.S. Investment and Jobs
This actually isn't the first time POTUS and Intel had a little pow-wow yet, I don't think TPU covered that. So this is something TPU is going to start covering in the future or was it just an excuse to get political? If the former, that's grand (just keep the editorial stuff out); if the latter, please don't. And to be fair, similar events likely unfold when Intel/AMD/TSMC/Samsung open fabs in other countries. I would like to hear about those too. Fabs are the cornerstones of technology and, to be honest, we don't hear enough about them.
Yes, we could always do better and politics shouldn't be a excuse for bad behavior nor anything else for that matter ---> Blue vs Red (CPU) and Green vs Red (GPU) debates come to mind and those have a tendency to escalate just as much here even if they are entertaining at times.It was a well covered event in the media.