Comment by jen20 20 hours ago
> How does Govt picking winners and losers going to help?
By ensuring that the US retains at least the ability to manufacture second tier CPUs vs complete reliance on Asia? This doesn't seem unreasonable.
The US can't employ poverty-tier labor to enable competitive margins, though. American businesses and global trade partners already largely reject Intel's foundry services.
Labor is not the key factor driving chip prices or performance. Fabs are highly automated and filled with extremely precise machinery. The maintenance and upkeep of machinery, the yield per wafer, and consumer demand drive the prices. Labor is basically a rounding error.
Doesn't matter. All of the US's advanced weaponry systems now use "state of the art" electronic systems, which in the context of defense only means "not decades out of date." Two or three generations old is perfectly fine. The military does not need the latest and greatest CPUs and GPUs going into the iPhone 17 or whatever, but it does need the equivalent of the chip in the iPhone 12 or iPhone 8 or whatever for integration into next generation weapons systems.
But if all of our advanced weaponry used chips from Taiwan or Korea, for example, then the strategic implications for war in East Asia would be radically different. People are right to say that China could engage in war over Taiwan for chips, but for the wrong reasons. It's not that they want access to the fabs (they'd love it, but they're not stupid and they know the fabs and know-how would be destroyed in the war), but it would deny the US defense industry access to those fabs.
If US missiles or drones use chips from TSMC, and TSMC is in occupied territory or a war zone... the US can't make more missiles or drones. And no matter how powerful your starting position is, you can't wage war without the ability to replenish your stockpiles. It's the bitter lesson Germany learned in both world wars.
China wants hegemony in Asia, and to remove the influence of the US, Japan, and their allies within what they perceive as their exclusive sphere of influence. How to achieve that? Invade Taiwan, which eliminates western access to TSMC one way or another, effectively blockading western defense industry from the core things they need to resupply their militaries in a war. Like WW1 all over again, a "preemptive war" becomes the game-theoretic optimal outcome, and the world suffers.
How to counter that? The US and its allies need to make sure they have access to chip fabrication facilities that can produce near-state-of-the-art chips, even at inflated prices that are not commercially viable in peacetime, as well as the necessary strategic minerals like germanium and lithium. Only then does calculus swing the other way in favor of peace. Hence Biden's effort to get TSMC to build SOTA fabs in Arizona, and when that failed/stumbled, this investment in Intel.
I mostly agree with this but have a hard time digesting the fact that someone would invest going to war with inferior looking strategy and technology.
Future wars are likely going to be GPU driven, ML heavy entities where efficiency matters a lot more than brute force, blunt grenade throwing wars of the past.
A super power like US would likely want to be in the forefront of this if they happen to be in a tussle with a worthy adversary.
The existing systems do this. Look up the F-35. It's what I was referencing. Bleeding edge state of the art chips aren't required though, or even practical -- these systems need a lot of validation before use, and that makes them always a few process generation behind.
Haven’t you read Curtis Yarvin’s vision for America? Our leaders, VCs, and owners have
I don't care how nihilist or kafkaesque you want to take the conversation - the math won't check out. You can't sustain a third-sector economy on second-sector jobs while importing first-sector goods. The entire financial system in America won't survive that sort of transition, it would be the Great Leap Forward of the 21st century.
Achieving that doesn't need to take the form of a 10% stake in a flailing company.