Intel CEO to Visit Taiwan, Home of Biggest Chipmaking Rival

[Xebec]

false, that fund accounted for 40% of the shares when TSMC was founded. they had to keep selling the stakes to pay taxes.

A government buying a large amount of shares in a corporation to get them started is still a form of capital subsidy - it's taxpayer dollars (or inflation via printed money) helping a company gain value - either through available capital to invest in itself, or by raising the price of other shares that people need to buy to make the company "go". Also, the 6.38% number is correct per TSMC's own FAQ today if that's to what you are referring:


National Development Fund, Executive Yuan
1,653,709,980
6.38%

 

[Xebec]

I do disagree with you about SemiAccurate. Charley is a wanker but I do owe him a debt of gratitude. I was a briefly a member of his site and found it so horribly wrong about the semiconductor industry I started SemiWiki.com. In fact I used the same forum software platform as he did.

LOL - Fair enough, he was just the first journalist that came to mind that isn't afraid to ask more probing/difficult questions of Intel executive leadership. My point was that we just need someone who has access to Pat and who has the wherewithal to ask the question and push for details.

 

[fansink]

The reason behind the visit has nothing to do with 3N capacity. To get 3N capacity Intel had to sign a very large contract which included a prepay so TSMC can build to order fabs. This was a photo op for Pat Gelsinger.

~Everyone on this thread is wanting to know what happened during the TSMC/Intel meeting. It appears that little in that meeting inured to the benefit of Intel, or Pat, else given Pat’s flamboyant nature, the Sentinelese would have heard by now.

 

[slin]

"Smart & arrogant" works well in prime Intel. Not sure its works in today's Intel as underdog.

That is exactly why he's trying to get into foundry business. The pride of being able to say you manufacture chips in-house and of course "Real men have fabs"...

 

[Xebec]

That is exactly why he's trying to get into foundry business. The pride of being able to say you manufacture chips in-house and of course "Real men have fabs"...

In my experience, there are a lot of people at large companies that are motivated when they see aggressive and bold leadership above them. Same goes with outside investors.

I’ve worked in Defense for 20+ years and there are many times where I’ve seen morale tank because executive leadership is just too afraid to make decisions or take strong actions. On the flip side, when they take ‘too bold’ of actions you can also sometimes see the same morale impact.

I think Pat is a bit on the aggressive side but for US companies that’s not an unusual attitude for a leader, and it often energizes workers and other leaders to be more decisive .. at the risk of putting some other people off. Aggressive can also be construed as confident - at a natural level.

 

[fansink]

....."Real men have fabs"...

“Real men have fabs” is synonymous with “heavier-than-air flying machines are impossible”.

 

[hist78]

In my experience, there are a lot of people at large companies that are motivated when they see aggressive and bold leadership above them. Same goes with outside investors.

I’ve worked in Defense for 20+ years and there are many times where I’ve seen morale tank because executive leadership is just too afraid to make decisions or take strong actions. On the flip side, when they take ‘too bold’ of actions you can also sometimes see the same morale impact.

I think Pat is a bit on the aggressive side but for US companies that’s not an unusual attitude for a leader, and it often energizes workers and other leaders to be more decisive .. at the risk of putting some other people off. Aggressive can also be construed as confident - at a natural level.

A great leader can be aggressive and arrogant. But in Intel's case, Pat Gelsinger is facing limitation that is not in his control.

1. The widespread labor shortage is not limited to low pay jobs. Semiconductor engineers and professionals can find jobs with better compensation and potentially more exciting future outside of Intel. Intel will need to find a way to keep talented people from leaving Intel in addition to recruit new talents to join Intel. If people feel Intel's leadership is aggressive and arrogant, many of them won't join Intel nor stay with Intel.

2. TSMC is an important supplier/partner of Intel while there are plenty of companies, in addition to Intel, want to get more TSMC's capacity allocation. Intel needs TSMC's full trust in order to make this relationship work.

Can Intel remake itself successfully in the next three years without TSMC? Probably it's more difficult.

Can TSMC grow its revenue and profits successfully in next three years without Intel? Probably yes.

When TSMC has choices other than Intel, Pat's aggressiveness toward TSMC won't help Intel.

An interesting article talks about Marvel CEO Matt Murphy's approach:

Chipmakers Try a New Strategy Amid Shortages: Storytelling

Companies are competing for chips in unusual ways, but first…

www.bloomberg.com

 

[fansink]

Can TSMC grow its revenue and profits successfully in next three years without Intel? Probably yes.

Not “probably yes”, “Absolutely Yes”, especially if Intel even hints, or others deduce, at another delay.

TSMC has been successfully growing revenue for the past 10 years (avg. ~30% annual yield), with little or no help from Intel.

Unless you feel and avg. ~30% annual yield over the last 10 years is not successful.

 

[Xebec]

A great leader can be aggressive and arrogant. But in Intel's case, Pat Gelsinger is facing limitation that is not in his control.

1. The widespread labor shortage is not limited to low pay jobs. Semiconductor engineers and professionals can find jobs with better compensation and potentially more exciting future outside of Intel. Intel will need to find a way to keep talented people from leaving Intel in addition to recruit new talents to join Intel. If people feel Intel's leadership is aggressive and arrogant, many of them won't join Intel nor stay with Intel.

2. TSMC is an important supplier/partner of Intel while there are plenty of companies, in addition to Intel, want to get more TSMC's capacity allocation. Intel needs TSMC's full trust in order to make this relationship work.

Can Intel remake itself successfully in the next three years without TSMC? Probably it's more difficult.

Can TSMC grow its revenue and profits successfully in next three years without Intel? Probably yes.

When TSMC has choices other than Intel, Pat's aggressiveness toward TSMC won't help Intel.

An interesting article talks about Marvel CEO Matt Murphy's approach:

Chipmakers Try a New Strategy Amid Shortages: Storytelling

Companies are competing for chips in unusual ways, but first…

www.bloomberg.com

Fair points - and agree wholly the labor shortage is a real problem for this industry in general as well.

On the arrogance side - I agree and see it as a double edged sword. I'm only pointing out the 'positive' side as I don't see that represented at all on this forum. I personally prefer humble but strong leaders (I personally model a servant leadership standard myself as best as I can - based on learning from my father in business), but OTOH there is something energizing about working for a leader that just "goes for it" with confidence.. Confidence that can sometimes be perceived as arrogance by others.

Pat needs to be as bold as an Andy Grove (who was definitely arrogant at times IMO, but also extremely competent) to succeed here.

 

[tooLongInEDA]

Fair points - and agree wholly the labor shortage is a real problem for this industry in general as well.

On the arrogance side - I agree and see it as a double edged sword. I'm only pointing out the 'positive' side as I don't see that represented at all on this forum. I personally prefer humble but strong leaders (I personally model a servant leadership standard myself as best as I can - based on learning from my father in business), but OTOH there is something energizing about working for a leader that just "goes for it" with confidence.. Confidence that can sometimes be perceived as arrogance by others.

Pat needs to be as bold as an Andy Grove (who was definitely arrogant at times IMO, but also extremely competent) to succeed here.

I think both hist78 and you make good points. In fact, Pat/Intel have several different groups to satisfy, all with different (perhaps conflicting) needs.

Yes, what "legacy Intel" needs or wants internally might be more of the Andy Grove style leadership. I remember reading "Intel Inside" on this - the need to be in the building by 08:30 for example and a rather strict, almost military regime and obsessive focus on "process" (meaning work process rather than silicon).

But that is not for everyone and certainly not typical (in my experience) of Silicon Valley and the industry in general. I for one couldn't stand the enforced conformity. And good luck trying to run a software company that way !

And then, even if this is the leadership Intel needs to restore motivation internally, it may be quite different from what external customers and partners need to hear.

So we come back to my earlier point:

1) Does Intel require some internal cultural change at this point to continue to prosper and grow ?
2) If so, are there enough leaders - at all levels - in Intel to drive this through ?
3) If so, is Pat Gelsinger the right person to lead this ? Or is he in fact so blooded in the legacy Intel culture that he's doubling down on that and hoping this will work again ?

I don't know the answers here, but suspect these questions are important right now.

Pat is coming across as a "one man band" right now. He needs other Intel execs to be out there fighting with him.

 

[Daniel Nenni]

Do you think Pat's Taiwan/TSMC narrative will change after his visit?

 

[Xebec]

Do you think Pat's Taiwan/TSMC narrative will change after his visit?

In the recent Economic Club of Washington DC interview on Dec 9, Pat referred to Morris Chang as the second most important person in all of Taiwan's history.. (second to Chaing Kai-shek..).

 

[Daniel Nenni]

In the recent Economic Club of Washington DC interview on Dec 9, Pat referred to Morris Chang as the second most important person in all of Taiwan's history.. (second to Chaing Kai-shek..).

Yes I saw that. I don't think Pat has said a negative thing against Morris or TSMC directly. I was referring to his fear/uncertainty/doubt campaign about Taiwan being invaded by China which would cause a semiconductor supply chain disruption. The thing is that no matter what percentage of semiconductors are manufactured in Taiwan (20-30-40-50-60-70%) a war with China will disrupt the semiconductor world. So rather than use scare tactics TSMC competitors and partners should do everything they can to prevent a war. Sound reasonable?

TSMC building fabs in the US, EU, and India would build an even bigger silicon shield for Taiwan so I hope that happens.

 

[herbs88]

A government buying a large amount of shares in a corporation to get them started is still a form of capital subsidy - it's taxpayer dollars (or inflation via printed money) helping a company gain value - either through available capital to invest in itself, or by raising the price of other shares that people need to buy to make the company "go". Also, the 6.38% number is correct per TSMC's own FAQ today if that's to what you are referring:


National Development Fund, Executive Yuan
1,653,709,980
6.38%

NDF got 48.3% of TSMC’s share in 1986 putting in 70 million usd, they now have 6.3%. Just because they are still the largest shareholder doesn’t mean they’ve been constantly subsidizing it. TSMC’s success in the past two decades was NOT because of the subsidy.