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Intel looking to develop closer relationship with TSMC?!?!?!

hist78

Well-known member
PG did not claim that "TSMC received 30% to 40% subsidies from Taiwanese government to build a new fab in Taiwan". Here is what he said:

Gelsinger argued that the Taiwan and Korean governments are providing massive subsidies to support local chipmakers.
"How do you compete with a 30 to 40% subsidy? Because that means we're not competing with TSMC or Samsung, we're competing with Taiwan and Korea," he said. "The subsidies in China are even more significant."


He did mention 30...40% but it's not clear what specifically he referred to. The numbers are probably wrong either way but one should not to compare FAB costs to Taiwan government budget just based on this statement.

@lilo777,

I jus watched the Fortune interview again. It's very clear that Pat was claiming TSMC got 30% - 40% subsidies (and so did Samsung). There isn't any ambiguity at all.

It's starting around -2:15 in the video. The interview host even tried to confirm it with Pat to see if they (TSMC and Samsung) are already getting the 30% -40% subsidies, Pat answered: "Today".

 
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tooLongInEDA

Moderator
Gelsinger just tipped his hand. If you read between the lines, what he just said was that TSMC's costs are 30-40% lower than Intel's.
That is not what he said.

And even if it were he should be asking himself why Intel's costs are so much higher than TSMC's and do something positive about it within Intel. There are all sorts of reasons why that might be true, not all of which would be due to "subsidies" (which Intel have had too). What's that expression - "always the victim, never our fault" ?
 

lilo777

Active member
I can't think about any CEOs who behaved like Pat Galsinger: constantly attacking the very same company he wants to build long lasting relationship with.

Does Apple really need Intel in order to be prosperous? I don't think so.

Does TSMC must have Intel as a customer in order to grow business and to innovate? I don't think that is necessary.

I'm wondering if Intel's board of directors really know what Pat Gelsinger is thinking.
How exactly is he attacking TSMC? If he is attacking anyone that would be US government (not providing subsidies like other governments). And again, Apple has nothing to do with this issue.
 

hist78

Well-known member
Last edited:

lilo777

Active member
@lilo777,

I jus watched the Fortune interview again. It's very clear that Pat was claiming TSMC got 30% - 40% subsidies (and so did Samsung). There isn't any ambiguity at all.

It's starting around -2:15 in the video. The interview host even tried to confirm it with Pat to see if they (TSMC and Samsung) are already getting the 30% -40% subsidies, Pat answered: "Today".

He said this: "If I was building that $20B in South Korea or Taiwan that's approximately 30 to 40 % subsidies to do that from those governments." He might be indeed referring to subsidies that TSMC and Samsung are getting or he might be saying that if Intel were to build FAB in Asia they would get those subsidies (just like they get subsidies from local governments for building anywhere outside US). You are probably correct though.
 

tooLongInEDA

Moderator
How exactly is he attacking TSMC? If he is attacking anyone that would be US government (not providing subsidies like other governments). And again, Apple has nothing to do with this issue.
It really doesn't matter that much what you, I or anyone else thinks or what the "truth" here is. But from what the TSMC exec is reported as saying it seem quite clear offence was taken, whether it was intended or not. It's an unforced error.
 
P

Portland

Guest
Pat gelsinger is "big game hunting" which is done for publicity and gossip magazines, not something worthy for a CEO of a major corporation. People within intel have dismissed him as childish.
 

Lorien

Member
Pat should have chosen his words more carefully, however .. what is the timeframe Pat was referencing? Taiwan is relatively stable today, but that may not be the case in 10, 20 years. Xi has made a lot of comments about Taiwan lately though I don’t know if that’s more than usual.

Also, a few weeks ago this appeared in an article on CNN:

Taiwan's President says the threat from China is increasing 'every day' and confirms presence of US military trainers on the island​

Taiwan's past relationship with China was a lot worse - as someone who grew up during the Chiang Ching-kuo years, I remember a bit of that, though my parents remember a lot more during the Chiang Kai-shek years.

I think both the current governing DPP party and Western media both have their own reasons to drum up the threat of war (to reinforce anti-China sentiments as US-China trade war continues, and many US-aligned country like Australia and Japan are wary of China's growing influence too).

But I honestly don't see any fundamental change in the dynamic between Taiwan and China, then and now. Taiwan likes to assert its political independence and China likes to make a big show of force whenever Taiwan does it. it's all political theater and neither side gains anything if they go to war, and they know it.
 
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Lorien

Member
@tooLongInEDA,

It's nothing to do with any culture difference between US and Taiwan. It's more to do with the quality and fitness of the leader. In this case, TSMC didn't do anything or say anything negatively about Intel while Pat Galsinger keeps trashing and looking down at TSMC. Sadly, Pat's misleading or inappropriate talking points are gradually moving to the level that no one inside of Intel dares or is willing to correct him.

It makes me think Mr. Galsinger still lives in the fantasy of the old mighty Intel. He doesn't treat TSMC as an important partner and supplier. TSMC, in Pat Galsinger's mind, is more or less like a handyman or a Pizza shop.

I don't see any CEO of a major American corporation behaves like Pat is doing: to attack your own partners while your partner said nothing bad about you.

TSMC was a critical supplier/partner of Intel and will be even more critical to Intel's roadmap for the next several years. I don't think any logical and capable American CEO will behave the way Pat does.

It's nothing to do with the culture.

The partnership between Intel and TSMC that started by both companies' founders has been damaged by Pat and his own fantasy.
I agree with this. I was actually enthusiastic when Pat took over because he actually as an engineering background, but his public speeches just keeps getting more and more cringe.

like does anyone actually believe this crap?? Intel "gave shares to AMD" because they "didn't have capacity"??? isn't that the whole point of Intel being an IDM?
 

VCT

Active member
I agree with this. I was actually enthusiastic when Pat took over because he actually as an engineering background, but his public speeches just keeps getting more and more cringe.

like does anyone actually believe this crap?? Intel "gave shares to AMD" because they "didn't have capacity"??? isn't that the whole point of Intel being an IDM?
Intel, AMD, and NVIDIA all believe if they have more capacity, they will get more shares.
 

Jozo035

Member
Another piece to the story (or current situation):

Intel doubled leading edge capacity during Trump's era (2017 to 2020).

Intel2-1920x818.png


 

tooLongInEDA

Moderator
Another piece to the story (or current situation):

Intel doubled leading edge capacity during Trump's era (2017 to 2020).

Intel2-1920x818.png


Very interesting. But that's measuring the inputs. What we really want to know - but likely never will - is what happened to the output capacity (after yield losses) as yield on 10 is known to have been worse than on 14. Perhaps so much of the production has been at 14 that this didn't matter.
 

Brassmonke

New member
I would have to respectfully disagree with some of the negative sentiment here about Pat and the comments he has made.
The comment about subsidies indeed included South Korea. If you do a quick google you can see that they are in fact offering to subsidize up to 50%. However, if memory serves that number referred to R&D costs.

TSMC's 2018 income tax payment in Taiwan represented 7.6% of total corporate income taxes collected by the R.O.C. government. https://esg.tsmc.com/download/file/...shed_May_2019/english/pdf/e_1_ourBusiness.pdf
I agree that the idea of Taiwan subsidizing TSMC is inaccurate given how much of Taiwanese GDP TSMC represents. However, the point is not that one supports the other - its the fact that they are interdependent. TSMC has supported Taiwan to such a massive degree that it has provided Covid Vaccine to Taiwanese people while Taiwan has made concessions to ensure adequate power for the Fabs.

My point here is that there is far more support and interaction between the governments and the Fabs that Pat referred to. Pat has been to the white house a number of times since becoming CEO of Intel and I think that his arguments are being made from a place of wanting the US government to exercise its considerable power/wealth in supporting Intel the way that Taiwan and the South Korean Government support their own Semiconductor Infrastructure. I simply wish he would do a better job of explaining this so as not to step on so many toes. It also seems likely that he would be far better informed of the US governments opinion of what transpires outside of US borders then the average citizen.

My other observation is that Pat worked directly under Andy Grove. It was Grove, I believe, who had made Pat Intel's first CTO. Grove also happened to support TSMC back in 87 when Chang started the company and noted as having offered support as early as 1988. Given Pats reverence for Grove, Morris, and Noyce, I happen to believe there is likely a massive amount of respect for Chang and TSMC as well.

I suppose what I am saying is Intel can't have it all. I'd rather an engineer whose eloquence is somewhat lacking at the helm of Intel then a former CFO.

Any who, thanks to all in the forums. Its always enjoyable to read everyone's opinions and have a reasonable discourse on the internet.
 

prime007

Active member
Well...if Intel is looking for a closer relationship with TSMC, it appears they aren't doing a great job at the moment.
On Friday, TSMC fired back. It was the first time that I, or any experts I talk with, can recall the Taiwanese giant admonishing a customer. “Not too many people will believe what Intel says,” TSMC Chairman Mark Liu told reporters on the sideline of a tech forum in Taipei. He added that TSMC does not attack its “peers.” Previously, TSMC executives have almost always described Intel as a “customer” rather than a “peer,” as a show of respect.
Source: https://www.bloomberg.com/news/news...trade-barbs-over-u-s-chipmaking-fully-charged
 

Xebec

Active member
Looks like news reporting drama is continuing - https://www.tomshardware.com/news/tsmc-founder-pat-gelsinger-may-not-have-time

(paraphrasing) -
Morris Chang pointing out Intel's internal rules mean a CEO can't stay past age 65, and Gelsinger is 60 already.

At the same time, Gelsinger adding commentary about government subsidies that TSMC (and Samsung) appear to have:

""How do you compete with a 30 to 40% subsidy," Gelsinger asked. "Because that means we are not competing with TSMC or Samsung, we are competing with Taiwan and Korea. The subsidies in China are even more significant."

..

Personal opinion is you can say things publicly but still have strong back-end relationships. These are companies competing with each other, and of course each company is going to claim "first", or "most" -- that's what attracts cash an investments in their direction..
 

Jumper

Member
Looks like news reporting drama is continuing - https://www.tomshardware.com/news/tsmc-founder-pat-gelsinger-may-not-have-time

(paraphrasing) -
Morris Chang pointing out Intel's internal rules mean a CEO can't stay past age 65, and Gelsinger is 60 already.

At the same time, Gelsinger adding commentary about government subsidies that TSMC (and Samsung) appear to have:

""How do you compete with a 30 to 40% subsidy," Gelsinger asked. "Because that means we are not competing with TSMC or Samsung, we are competing with Taiwan and Korea. The subsidies in China are even more significant."

..

Personal opinion is you can say things publicly but still have strong back-end relationships. These are companies competing with each other, and of course each company is going to claim "first", or "most" -- that's what attracts cash an investments in their direction..
This will be a big problem. Like they can change some rules for him but still it is true, he is old. That same goes for his old pals, Intel needs to develop new talent, not recycle old stars.
 
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