Comment by alephnerd

Comment by alephnerd a day ago

Good. It's very much a "Heartbreaking: The Worst Person You Know Just Made a Great Point" situation.

If Taiwan's NDF has ownership share in TSMC and UMC, China's CICIIF in SMIC, Japan's Master Trust in a majority of enterprises, and Abu Dhabi's Mubadala in GlobalFoundries, then we should as well.

The recent (50ish years) aversion to Industrial Policy in America has been pigheaded and ideological to a certain extent. If we wish to build capacity domestically, especially in high capex and low margins industry, some amount of government support is needed.

Funds that are overwhelmingly sourced via private capital cannot take the same risks to build an ecosystem that a Soverign Development Fund can. This is what the Master Trust (Japan), NDF (Taiwan), and Temasek (Singapore) did to build their own domestic industries in semiconductors and REE processing - industries with high capex, high IP barriers, and low margins.

This now sets the precedent to develop at sovereign development fund.

If we did this with GM and Solyndra a decade+ ago we would have been in a better position to protect our automotive and renewable industry, but ofc the GOP of that era along with a portion of the DNC was not ready to take such a risk.

The CHIPS and IRA acts were steps in the right direction, but couldn't really take full advantage of the stick.

Edit: Surprised that a forum that largely supports single payer healthcare opposes sovereign development funds, even though they themselves could help enforce pricing in a less complex manner than that which the CMS does today.

At some point this is just reflexive hatred.

lazide a day ago

I don’t know, it sounds like the US gov’t just stole $11 bln from Intel shareholders - while intel is failing - while promising nothing?

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alephnerd a day ago

It's a similar amount to the stake from the CHIPS act.

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- lazide a day ago
  
  And?
  
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  alephnerd a day ago
  
  And fundamentally, I believe that any industrial stimulus should come with a mixture of government ownership as well as claw-back provisions should interests contravene national security.
  Edit: cannot reply to you.
  This deal literally comes with claw-back provisions.
  
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jimbob45 a day ago

Would you still be saying this if Intel wasn’t floundering as badly as it is today? There’s no equivalent push to take any level of control in AMD.

Also this appears to be in exchange for CHIPS funds (per the article). HN has universally supported equity in return for bailouts over the years.

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alephnerd a day ago

> Would you still be saying this if Intel wasn’t floundering as badly as it is today
Yes.
I've been a proponent of a Temasek style model for the US since my undergrad days. This would make it easier to commercialize grant funded IP instead of the mess that SBIR/STTR is today.
It was difficult for the Biden admin to do something similar, but at least the traditional norms have been shattered.
As I said above, it's very much a "broken clock is right twice" type of situation.
> Also this appears to be in exchange for CHIPS funds (per the article). HN has universally supported equity in return for bailouts over the years.
Exactly!
And like I have said a couple of times on HN - I view the CHIPS and IRA as the carrot, and tariffs plus ownership stakes as the stick.
There is nothing wrong with with a public-private industrial policy. We ourselves used one until the 1980s with Reaganomics, as did our allies like Japan, Taiwan, Singapore, Israel, Ireland, and others.

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selimthegrim a day ago

What if the government demands they start paying dividends?

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alephnerd 5 hours ago

Also, good question - because as your rightfully pointed out, IME - deep down, I don't think dividends align with a net corporate benefit.
I should probably do the math, but excuse is I'm a VC - it just doesn't make sense from a long term perspective as I pitch to LPs about my thesis.

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alephnerd 14 hours ago

Ideally, a government or SDF holding is not a majority holding, but a controlling stake.
Generally, a SDF is expected to take decisions that help develop an ecosystem or market, and help act as a check against primarily profit-driven motives.
Assuming a stake is part of a well managed SDF similar to Temasek, Mubadala, or the Master Trust, then I'd tend to trust the decision being made.
That said, I also recognize that this administration is severely disorganized and amateur, so I wouldn't trust their choices. But, I do feel this sets a precedent to allow both the federal and state governments to build SDFs, especially in a post-Trump world.
For example, the CHIPS and IRA were able to be pushed thru by the Biden admin because of the trade norms the Trump 1 admin created and upended.

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bigyabai a day ago

The government support should have come in the form of a real competitor. Intel got this way because they had no competition - nobody thought a domestic EULV manufacturer would be an American prerogative in 20 years. All the customers for dense silicon were fine importing it from Taiwan.

Pouring more money into a proven dumpster fire won't put out the fire. This is the protectionist just-desert of refusing to regulate the top-dog competitors into a position where they're afraid to rest on their laurels. If we want an American lithography powerhouse, buying Intel stock rewards exactly the wrong incentives.

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selimthegrim a day ago

What’s your suggested remedy?

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- bigyabai a day ago
  
  Deregulate RISC-V, threaten Intel with loss of IP if they can't profit on fabs, threaten to cut Softbank off of American companies if Masayoshi Son won't onshore RISC manufacturing.
  There's soft-power coercion left on the table, the only thing we buy with Intel stock is a C-suite's dinner bill.
  
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  alephnerd 12 hours ago
  
  > Deregulate RISC-V
  What does that even mean?!?
  It's already OSS and royalty free. I've participated Series A and B rounds on startups working on RISC-V design.
  > threaten Intel with loss of IP if they can't profit on fabs
  Investing in Capex is inherently going to put you in a loss for several quarters
  > threaten to cut Softbank off of American companies if Masayoshi Son won't onshore RISC manufacturing
  He doesn't own RISC-V IP.
  -------
  This is why I hate HN now. ICs with no domain expertise think they should have a voice.
  
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scarface_74 a day ago

So tell me your plan that would create a competitor for Intel from scratch that could be making decent chips in 5 years? 10 years?

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- poslathian a day ago
  
  Given the circumstances and the relatively low dollars involved, it would be interesting to see the experiment: $10B darpa program to establish a scalable fab ecosystem in 5 years via consortium.
  This was how the internet was created, darpa stitched together dozens of performers to get the key ingredients (eg bbn gateways, academic subnets, experimental applications, protocol research.
  They even led the last ditch marketing Hail Mary after years of no-one caring about the program besides the zillions of engineers from all around building it by organizing a press day in a hotel ballroom for a demo day.
  As a taxpayer I’d strongly support 5B/.1% of the fed budget for a few years just to learn what happens in the attempt.
  
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  scarface_74 17 hours ago
  
  $5B wouldn’t be nearly enough to create a leading edge fab. Estimated cost for TSMC is $20B.
  China has been trying and failing to build a competitive fab for years, has the rare earth minerals in its back yard, etc and can’t do it.
  The second issue is, who exactly is going to use these fabs once they are built. One issue that Intel has is that its “customer service” sucks. TSMC will bend over backwards as a partner. No one wants to work with Intel.
  Can you imagine Apple or Nvidia wanting to work with a government owned chip fab?
  
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- bigyabai a day ago
  
  Is it too much "magic" for the moneyed geniuses down at Apple? Or is technology not quite their wheelhouse anymore?
  
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  JustExAWS 17 hours ago
  
  Do you apply the same standard to Nvidia, AMD, Microsoft, Amazon, Google and Tesla who are all trillion dollar market cap companies (besides AMD) who design their own chips and they are manufactured by TSMC - or for Tesla moving to Samsung
  
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