Thursday, December 2nd 2021
Intel CEO Asks US Government for More Backing, Calls Taiwan Not Stable
Since Intel CEO Pat Gelsinger joined the company earlier this year, the messaging language from Intel has changed radically, as it has become a no-nonsense message of Intel going back to its roots as a leading foundry and a leading chip maker. However, Gelsinger might've overstepped a little bit as of lately, as during a conference in California, he went on record saying that Intel deserves special treatment by the US government, in favor of some of its competitors.
At the same time, it's not hard to see why Intel thinks the US government should favor it and other US companies like Micron and Texas Instruments, over Samsung and TSMC. However, Intel's selling argument here is that investing in non-US companies means that the R&D money and IP ends up abroad, which isn't entirely true when it comes to foundries. Gelsinger also complained about the fact that Samsung and TSMC was getting large government subsidies in their home countries and claimed that because of those subsidies, Intel was competing with Korea and Taiwan, rather than with Samsung and TSMC.
As if that wasn't enough, Gelsinger went on to call Taiwan "not a stable place" due to the current situation between the PRC and Taiwan. He also highlighted the fact that the PRC is infringing on Taiwan's air defence identification zone (ADIZ) on a regular basis, with as many as 27 military aircraft encroaching on a single day. It should be noted that the Taiwan ADIZ actually stretches well inside the PRC, although the areas that the PRC normally enter that are being reported are quite close to Taiwan, rather than flights over PRC territory.
The US government still hasn't reached a conclusion on the CHIPS Act, which is meant to set aside as much as US$52 billion for chipmakers in the US. There's no secret that Intel wants a large share of that money, deservedly so or not. As Intel is slowly moving towards offering foundry services, it makes sense that they would need to invest even more heavily into building foundries, since as we know, there simply aren't enough cutting edge foundries at the moment and too many companies are fighting over the cutting edge nodes these days. That said, scare tactics isn't the way forward, instead Intel should show that they can operate a foundry business just as well as its competitors and try to win over business from them, as that's how you show that you deserve both the business and the investment.
Sources:
Taiwan News, image courtesy of @PGelsinger
At the same time, it's not hard to see why Intel thinks the US government should favor it and other US companies like Micron and Texas Instruments, over Samsung and TSMC. However, Intel's selling argument here is that investing in non-US companies means that the R&D money and IP ends up abroad, which isn't entirely true when it comes to foundries. Gelsinger also complained about the fact that Samsung and TSMC was getting large government subsidies in their home countries and claimed that because of those subsidies, Intel was competing with Korea and Taiwan, rather than with Samsung and TSMC.
The US government still hasn't reached a conclusion on the CHIPS Act, which is meant to set aside as much as US$52 billion for chipmakers in the US. There's no secret that Intel wants a large share of that money, deservedly so or not. As Intel is slowly moving towards offering foundry services, it makes sense that they would need to invest even more heavily into building foundries, since as we know, there simply aren't enough cutting edge foundries at the moment and too many companies are fighting over the cutting edge nodes these days. That said, scare tactics isn't the way forward, instead Intel should show that they can operate a foundry business just as well as its competitors and try to win over business from them, as that's how you show that you deserve both the business and the investment.
128 Comments on Intel CEO Asks US Government for More Backing, Calls Taiwan Not Stable
spend more profits on R&D perhaps??
I guess we lived ling enough to see this too.
The bulk of TSMC's fabs are still in Taiwan though. But spreading out the risk by building fabs in other countries is clearly mutually beneficial.
I really don't care if the semis are made in Germany, or Mexico, or Canada, or the US, or Australia, or even India for that matter. No one does I think. You just have to have a complete supply chain in the democratic westernized countries, you have to have the capability to do it and ramp it within a few years if needed.
In comparison, TSMC and Taiwan are far more valuable. TSMC producing leading edge chips for various companies and one major reason to avoid letting it fall into Chinese hands, and Taiwan is a smaller but still notable producer of other goods, with "Made in Taiwan" mostly being seen a few steps above "Made in China".
---
As for the main topic, rather than investing into Intel, the US government should invest more into GloFo and TSMC; getting TSMC to open a leading edge fab as well as a research fab in the states to help hedge against some tech loss while also getting their hands on leading edge development (moreso since Apple funds it anyway), and Global Foundries, which has at least 3 stateside Fabs and could use a boost to once again be semi-competitive with Intel, Samsung, and TSMC. Intel has more than enough money to put into matching and countering the rivalry a stateside TSMC and a resurgent GloFo would put up against them, so they don't need the extra investment.
I trust Taiwan, but I don't trust Taiwan's defenses (vs China). There's simply no way that Taiwan's 290,000 person-strong military can go up against China's 1-million+ men, not in any reasonable scenario. At best, Taiwan can stall out China maybe long enough for the USA to help but things get hairy after that (I could very well see China beating USA in Taiwan... much like how USA could beat USSR in a Cuban fight. Home-turf advantage is very big).
Similarly, I trust South Korea, but I don't trust South Korea's defenses (vs North Korea). In this case, I think South Korea + US would win a North Korean fight, but North Korea almost certainly would artillery strike the fabs / factories in South Korea, so those factories / fabs cannot be relied upon.
In the first case: China probably won't attack the fabs / factories, they probably want that expensive equipment for themselves. But I can very easily see China winning that fight. In the second case, North Korea would use the threat of blowing-up factories with easy artillery strikes as a bargaining chip.
See: asia.nikkei.com/Business/Tech/Semiconductors/South-Korea-plans-to-invest-450bn-to-become-chip-powerhouse
Likewise, they aren't investing in foreign companies but their local ones such as Samsung and SK Hynix for S.Korea and TSMC, UMC and etc for Taiwan. This would likely unbalance the market more towards those nations and companies.
I wish to think that EU is less prone to put hardware backdoors in its chips, compared to the US, Rasa or Chaina for example.Winning wars is no longer a matter of who has the largest number of cannon fodder, i.e. soldiers.
Yes, highly trained teams of spec-ops are still indispensable but sheer numbers mean nothing.
Korea, different topic. Any attack there would mean running over 50,000 US soldiers. Korea could be blockaded too though.
This all coincides with the 100-year anniversary of the CCP (2021) and of the PRC (2049). We know they like a big spectacle, we know they like wolf-warrior diplomacy. And... there's in fact a chance that they can beat the USA's Navy in this scenario. Given that chance, and the prestige associated with such a win, why wouldn't China try? (No, they can't rival us on the open seas. But "home turf advantage" means China's Navy will be operating in collaboration with its Air Force and missile-forces. In contrast, US Navy + US Marines will be the only thing reasonable to deploy to help Taiwan).
It all comes down to the confidence behind those "hypersonic ship-killing" missiles China has recently developed. If they think they can kill the US Capital ships, then they've pretty much won the fight. The carriers are the cornerstone of our naval strategy, and the airplanes on board would be necessary for helping Taiwan in almost any scenario. If our carriers are dead (or threatened to leave the area), China probably wins. (US Submarines may be effective... but submarines don't project force into Taiwan, so Taiwan's army would be on their own)
It all comes down to whether or not our AEGIS Cruisers can shoot down those missiles. A completely untested scenario. 3000mph hypersonic is really fast, and will be a challenge to shoot down.
------------
Remember: China's official stance on Taiwan is that Taiwan is in rebellion, and that Taiwan rightfully belongs to China. The US official stance is ambiguous, we haven't officially declared official support of Taiwan. The diplomatic route would be for the USA to give up Taiwan without a fight, much like Hong Kong's democracy disappeared overnight with very little said/done about it. I have my doubts that the USA will give up on Taiwan like we did with Hong Kong though.North Korean artillery has a range of 40 km (standard round) and 60km (long-distance round). Seoul is 23km from the DMZ. The entire city would be leveled with only artillery strikes, no such "North Korean invasion" needed at all. Furthermore: its a well known fact that North Korean artillery positions are heavily fortified, designed to withstand a nuclear attack from the USA (Korean War was post-nuclear after all). Only a direct assault with land forces would deal with that entrenched artillery. As such, North Korea can easily level Seoul in its entirety.
Those 50,000 US Troops are there to invade if this scenario occurs. They'll be racing against the clock. North Korea on the other hand, just sits back and watches their artillery do all the work.
The only defense is a strong offense. But there's reason to believe our offense simply isn't capable of saving Seoul, or other major cities within 40km of the DMZ. We will probably win the war, but North Korea has many options to really hurt South Korea if it decides to go 100% crazy suicidal on us.
I have very little confidence in the ability to save South Korean cities in this scenario, but I have high confidence in "winning" in the long term, after months or years of combat. (Where "winning" is removing North Korea's ability to conduct such strikes again).
------------
Bonus points: the two scenarios can happen simultaneously. If North Korea decides to attack South Korea, China almost certainly will take advantage of US-weakness and use that as the time to attack Taiwan. Our military forces in the area would be forced to choose between helping South Korea or Taiwan. We will probably try to save both, but... its not like China is stupid about these things. They're savvy and opportunistic. They'll take any advantage they can get.
Naturally, by another country I mean one of political or strategic value to some superpower. For example, not many African countrues fit the previous description, so it's pretty much battle royale for the local powers and the local peoples.
I also know this, the world, our wold, may seem very big, but our every action or lack thereof will sooner or later catch up with us, no matter how far away we think we are from danger.
It'd be a war of prestige: China would want to finally fix the Taiwan issue, while demonstrating to the world that it can win a fight vs the USA.
There probably wouldn't be any reason for North Korea to attack South Korea, but they're not exactly the most sane of nations. Little Kim isn't an idiot, but there's some kind of Game-of-Thones game being played in that monarchy. If some internal political reason comes out for people to doubt Kim's competence, monarchies (see Henry the VIII, or the Romanovs) are known to start wars to distract their internal populations. As such, the politics of that country can change at the drop of a hat.
www.ford.com/trucks/maverick/?gnav=header-trucks-vhp
Also, don't think that MAD will hold for very long. Simple fact is that all the nuclear alrsenal is in the hands of select few people. While in a nuclear war it's GG for the common folk, the said 'elite' can tuck away in their deep, deep bunkers. There are levels of survival they are prepared to face. It just sucks to be us.
I remember 2008 the US government bailing out the corps, and all the execs just gave themselves a bonus with the cash.
Now if they want to sell controlling shares to the government they could raise more capital like that ;)
But I go back to the blockade. What exactly would the western powers do if China blockaded Taiwan? Who would fire the first shot? Don't say China, that wouldn't be part of the plan. This would be just like the US blockade of Cuba in the 60s, and the USSR backed down at that time.