Intel getting help from Commerce Secretary Raimondo as part of effort to spur U.S. production

[tooLongInEDA]

I don't think they know it. I do believe the TSMC + its customers want to kill Intel. When TSMC held its event in Dec 2022, CEOs of Apple, AMD, Nvidia, ASML all shown up. Has anyone shown up during Intel's Arizona opening or Ohio's. I don't think any ever participated, not even ASML. All these competitors know how a mighty Intel could potentially disrupt their business model, and they don't want to give it a second life.

And the government don't really care about taxpayers' money, in fact no one does. And you won't either because everyone know there are even more money that have been distributed to Israel, Taiwan, and Ukrine for the past decades and more. People don't give a shit over how it's spent, otherwise the government would've listened years ago.

And based on the governments' actions. Intel plan on spending 100B in US, 90B in Europe before the most recent fiasco. There hasn't been much of government support, and let's face it. Intel was awarded with 8B. TSMC and Samsung both get 6B each. But what is their scale of investment? Samsung, sure it does spend a good amount.

But for TSMC, and let's be critical. It's not the best technology at that time these fabs are operational, nor does it have the same level of planned investments (65 billion vs Intel's 100 billion.) The government subsidy are not proportional to how the investment is.


With intel's original plan as follows



So I don't think anyone on this forum can blame Pat Gelsinger for his talking. US government literally stabs him at the back. The only thing I would to blame is that he trust this country too much.

I think you're in danger of losing the plot here using phrases like "TSMC and its customers want to kill Intel".

TSMC is simply trying to run a successful business. As are its competitors. Amongst other things, they're probably far too busy wrapped up in dealing with their own problems and customers. Staing focused is a critical component of success here.

Aside from that, I don't buy into all this techno-nationalism. The semiconductor industry has always been a global one based on global networks and specialisation. That's not going to fundamentally change.

As for the US govt stabbing Pat Gelsinger in the back. How so ? They've offered him [intel=] $10bns of subsidies. Pretty much as he asked for. If he can't later meet the qualification criteria, that's on him.

Intel's problems are 95% of their own making.[/intel]

 

[delong.height]

Is the US capable of doing the best R&D anymore? It’s something that needs to be earned by commitment, competence , hard work and perseverance, which are all qualities starting to fade away in the US. You can also argue that once Samsung gets out of its current slump, there will be much more balance in the world.

Well, Intel still can, their 18A has proved it. If not, TSMC would not feel the pressure to build in the US.

For Samsung, how can it be? They have no volume in 3nm, how can they go ahead from now on? You don't just jump over the elementery school and directly go to high school. If you don't master 3nm, you can't jump to the next node. And the problem is IFS still has sierra forest and granite rapids to tread water. Samsung doesn't get that, not will it ever.

 

[delong.height]

I think you're in danger of losing the plot here using phrases like "TSMC and its customers want to kill Intel".

TSMC is simply trying to run a successful business. As are its competitors. Amongst other things, they're probably far too busy wrapped up in dealing with their own problems and customers. Staing focused is a critical component of success here.

Aside from that, I don't buy into all this techno-nationalism. The semiconductor industry has always been a global one based on global networks and specialisation. That's not going to fundamentally change.

As for the US govt stabbing Pat Gelsinger in the back. How so ? They've offered him [intel=] $10bns of subsidies. Pretty much as he asked for. If he can't later meet the qualification criteria, that's on him.

Intel's problems are 95% of their own making.[/intel]

10Billions? in cash? where is the money, please be accurate.

And TSMC may be good. It has a good act in place, but not its customers. Their customers always want to have a secondary sources that is cheap and good. Intel can be good, but it will never be cheap. Doing so just hurts its bottom line. This is TSMC's fault.

Please read my comment here. If you think TSMC is doing the right thing. Then Intel shouldn't even be investing in the US, nor should the shareholders.

TSMC is simply trying to run a successful business. As are its competitors. Amongst other things, they're probably far too busy wrapped up in dealing with their own problems and customers. Staing focused is a critical component of success here.

TSMC's margin is achieved through striving to be operational excellence and being the worst place to work for (https://www.theverge.com/2024/4/23/...arizona-is-running-into-massive-culture-shock). As far as I know, the work life balance are worse for engineers working in Taiwan than those in US. Hence, there's this word, "卖肝文化", which means 'selling your liver for TSMC'.

Being the company that not only has low employee salary, monopolistic industry, highly anticipated and collaborated ecosystem, weak competitors, rich knowledge in manufacturing, multi-governments support, and the best in customer oriented, and the most challenging industry to compete in, all these conditions are conflicting with 53% of gross margin they seek. That is the problem. They are selling wafer at a price none can compete with, they are making semiconductor manufacturing industry a horrible industry to invest in because with such advantage you have, you shouldn't be selling at 53% margin, you should sell at 75% of gross margin. Under 53%, Intel can't survive because of cost, Samsung can't survive because they don't have customer at leading edge. other companies also can't. SMIC maybe, but it needs years and years to develop their own ecosystem and tools.

But they are in a good place, with government subsidy. They should raise to a price where it's ok for other companies. TSMC's customers, like Nvidia are raising their margins, knowing their products are selling like a cake, making data-center GPU market more competitive in general, more companies want to develop their own products like Intel and Amd, and Broadcom, Qualcomm. TSMC is being this weirdo in town that has the best in almost everything, refuses to raise prices, refuses to raise margin to a level that would attract more investment. Why? because competitors know they will die because they can't compete with TSMC that offers the best with lowest quality. I mean, man, how can you compete in this situation when your competitor only want 53% of margin but you need them at 60-70%? Isn't it bad for this industry in general? Do you really want to claim that TSMC is innocent?

You get me? @tooLongInEDA

 

[Fabian.]

Aside from that, I don't buy into all this techno-nationalism. The semiconductor industry has always been a global one based on global networks and specialisation. That's not going to fundamentally change.]

I would generally agree with you, but the problem is that China has a very specific idea of the region where TSMC is located, and it will evolve one way or another in terms of techno-nationalism. The chip industry is no longer global since the US has imposed restrictions on China and constrained it. Global is just a (temporary) illusion.

 

[count]

It's not just that labor costs, in my opinion China and Taiwan are better at manufacturing, have smarter, more capable, and harder working people in that sector than the US.

It's like Americans have forgotten how to do manufacturing. You've be amazed how many experienced manufacturing engineers I talk to who don't know what an MSA, Gage R&R, or Cpk is. The most junior manufacturing engineers in Asia know this stuff very well. Probably because in Asia, manufacturing is considered a good job that pays relatively well, and in the US, people would rather work in tech or sales or something else because manufacturing pays relatively little in the America.

 

[osnium]

10Billions? in cash? where is the money, please be accurate.


Please read my comment here. If you think TSMC is doing the right thing. Then Intel shouldn't even be investing in the US, nor should the shareholders.

TSMC's margin is achieved through striving to be operational excellence and being the worst place to work for (https://www.theverge.com/2024/4/23/...arizona-is-running-into-massive-culture-shock). As far as I know, the work life balance are worse for engineers working in Taiwan than those in US. Hence, there's this word, "卖肝文化", which means 'selling your liver for TSMC'.

Being the company that not only has low employee salary, monopolistic industry, highly anticipated and collaborated ecosystem, weak competitors, rich knowledge in manufacturing, multi-governments support, and the best in customer oriented, and the most challenging industry to compete in, all these conditions are conflicting with 53% of gross margin they seek. That is the problem. They are selling wafer at a price none can compete with, they are making semiconductor manufacturing industry a horrible industry to invest in because with such advantage you have, you shouldn't be selling at 53% margin, you should sell at 75% of gross margin. Under 53%, Intel can't survive because of cost, Samsung can't survive because they don't have customer at leading edge. other companies also can't. SMIC maybe, but it needs years and years to develop their own ecosystem and tools.

But they are in a good place, with government subsidy. They should raise to a price where it's ok for other companies. TSMC's customers, like Nvidia are raising their margins, knowing their products are selling like a cake, making data-center GPU market more competitive in general, more companies want to develop their own products like Intel and Amd, and Broadcom, Qualcomm. TSMC is being this weirdo in town that has the best in almost everything, refuses to raise prices, refuses to raise margin to a level that would attract more investment. Why? because competitors know they will die because they can't compete with TSMC that offers the best with lowest quality. I mean, man, how can you compete in this situation when your competitor only want 53% of margin but you need them at 60-70%? Isn't it bad for this industry in general? Do you really want to claim that TSMC is innocent?

You get me? @tooLongInEDA

TSMC is democratizing access to leading edge node technology through operational excellence and by choosing to lower prices by eating a lower margin. They should be applauded for this.

 

[tooLongInEDA]

TSMC is democratizing access to leading edge node technology through operational excellence and by choosing to lower prices by eating a lower margin. They should be applauded for this.

Totally agree.

It's quite shocking how common this sort of zero sum game thinking is.

 

[MKWVentures]

Well, Intel still can, their 18A has proved it. If not, TSMC would not feel the pressure to build in the US.

18A is a year from Qual and the foundry feedback is mixed . Perhaps we should wait to see what really comes from 18A before declaring mission accomplished?

TSMC decided to build in the US before Pat took over. Actually the discussions started over a year before that.

Ironically, I always thought TSMC was building in the US to support Intel (and AMD). Intel plan was to be a TSMC customer, not a competitor. TSMC considers Intel a customer.

 

[tedc]

Being the company that not only has low employee salary, monopolistic industry, highly anticipated and collaborated ecosystem, weak competitors, rich knowledge in manufacturing, multi-governments support, and the best in customer oriented, and the most challenging industry to compete in, all these conditions are conflicting with 53% of gross margin they seek. That is the problem. They are selling wafer at a price none can compete with, they are making semiconductor manufacturing industry a horrible industry to invest in because with such advantage you have, you shouldn't be selling at 53% margin, you should sell at 75% of gross margin. Under 53%, Intel can't survive because of cost, Samsung can't survive because they don't have customer at leading edge. other companies also can't. SMIC maybe, but it needs years and years to develop their own ecosystem and tools.

But they are in a good place, with government subsidy. They should raise to a price where it's ok for other companies. TSMC's customers, like Nvidia are raising their margins, knowing their products are selling like a cake, making data-center GPU market more competitive in general, more companies want to develop their own products like Intel and Amd, and Broadcom, Qualcomm. TSMC is being this weirdo in town that has the best in almost everything, refuses to raise prices, refuses to raise margin to a level that would attract more investment. Why? because competitors know they will die because they can't compete with TSMC that offers the best with lowest quality. I mean, man, how can you compete in this situation when your competitor only want 53% of margin but you need them at 60-70%? Isn't it bad for this industry in general? Do you really want to claim that TSMC is innocent?

You get me? @tooLongInEDA

To be honest, all this just sounds like a well-run business (e.g. competitive products, lower costs, strong industry ecosystem, etc.). TSMC has some of the highest salaries in Taiwan (regularly recruiting top talent) and is always looking to raise prices. Keep in mind, semiconductor manufacturing has traditionally been a low margin endeavor; TSMC is the exception not the rule. If they think the business can support higher margin, I'm sure their board and shareholders would demand it.

 

[jim_22222]

To be honest, all this just sounds like a well-run business (e.g. competitive products, lower costs, strong industry ecosystem, etc.). TSMC has some of the highest salaries in Taiwan (regularly recruiting top talent) and is always looking to raise prices. Keep in mind, semiconductor manufacturing has traditionally been a low margin endeavor; TSMC is the exception not the rule. If they think the business can support higher margin, I'm sure their board and shareholders would demand it.

keep the margin low to strangle competitors, and raise after they dead.
if you know the memory business, this is the most common tactic.

 

[BruceA]

To be honest, all this just sounds like a well-run business (e.g. competitive products, lower costs, strong industry ecosystem, etc.). TSMC has some of the highest salaries in Taiwan (regularly recruiting top talent) and is always looking to raise prices. Keep in mind, semiconductor manufacturing has traditionally been a low margin endeavor; TSMC is the exception not the rule. If they think the business can support higher margin, I'm sure their board and shareholders would demand it.

Highest in Taiwan with an incentive system that makes people there work at their limits sacrifices to family and health set by manager ecxpectations annd behavior that could result in lawsuits in US and only seen and achieved in the US in finance, startups and those aspiring to partnership.

 

[delong.height]

TSMC is democratizing access to leading edge node technology through operational excellence and by choosing to lower prices by eating a lower margin. They should be applauded for this.

That statement is quite plausible. Especially 'They should be applauded for this'. Because their low margin isn't welcomed by anyone beside its customers. Everyone else including shareholders, employees, competitors are negatively affected by it. For shareholder, the company they invest in should sell more per ASP, more profits was left on the table. Employees are mistreated by its working culture. They are paid good amount in Taiwanese terms, but definitely not at a level that they should be getting. Competitors are negatively impacted too because the ecosystem is surrounding TSMC because of its low margin, attracting more customers' orders; hence more ecosystem that is build around it. Hence it comes 'Silicon Shield'.

People on this forums believe that it is a norm for young people in Taiwan and they should sell their liver to TSMC because of its culture. That TSMC's margin is not abusing the market. That shareholders of TSMC are well compensated. How sick those statement is. For better or for worse, TSMC should be a driving force in shaping the industry to be more dynamic, more competitive. Otherwise, it is safe to conclude that it is abusing the market with its monopolistic power. With great power, comes great responbility. TSMC has always been highly responsible only to its clients and that's why every customer has been loyal to them. But that is no good.

Look, it's amazing how TSMC has achieved in the past decade or so. But one should not forgot that the work culture in TSMC isn't reproducible anywhere in the developed nations unless there is strong government support. And TSMC's doing when Nvidia is raising profit margin like crazy, has TSMC raise its prices, knowing that their product and services are almost irreplacable, yet only charges 53%.

Isn't that fishy?

 

[delong.height]

TSMC decided to build in the US before Pat took over. Actually the discussions started over a year before that.

Ironically, I always thought TSMC was building in the US to support Intel (and AMD). Intel plan was to be a TSMC customer, not a competitor. TSMC considers Intel a customer.

TSMC decided to build only when Trump pressured them to do so.

And TSMC's building in US was never intended to support Intel, because like Apple, Intel would only want most cutting edge. And Intel can only get that in Taiwan.

 

[delong.height]

18A is a year from Qual and the foundry feedback is mixed . Perhaps we should wait to see what really comes from 18A before declaring mission accomplished?

It simply has to be good. It may not be good for other fabless companies as we are hearing due to historical reason. But if Intel is betting all of its house in 18A, it can be trust to the greatest extent because they simply cannot afford missing another. Pat knows it, his team knows it. Everyone on the street know this as well.

 

[delong.height]

To be honest, all this just sounds like a well-run business (e.g. competitive products, lower costs, strong industry ecosystem, etc.). TSMC has some of the highest salaries in Taiwan (regularly recruiting top talent) and is always looking to raise prices. Keep in mind, semiconductor manufacturing has traditionally been a low margin endeavor; TSMC is the exception not the rule. If they think the business can support higher margin, I'm sure their board and shareholders would demand it.

Well, let me ask, is there any work-life balance? TSMC simply has the best of Taiwan. Why don't they simply hire more? Why are we still hearing 'Selling your live to TSMC' phrases constantly?

They paid the highest salaries but only because Taiwan is under-developed. What they paid will be the highest for sure, but no where can it be at Intel's salary to their fab technician.

Keep in mind, semiconductor manufacturing has traditionally been a low margin endeavor; TSMC is the exception not the rule. If they think the business can support higher margin, I'm sure their board and shareholders would demand it.

You should look forward, semiconductor manufacturing should be the highest margin industry, especially leading edge. You think semi manufacturing shouldn't be compensated a lot higher when there's only three leading edge foundries in the world. Yet, two out of three are almost dysfunctional? TSMC's board and the company knowingly and admittedly killed the competition, and that is without a doubt. Will they raise margin to 60/70% when both Intel and Samsung failed and exited. Probably not because they know that the strategy they adopted today will make Taiwan as irreplaceable 10 years, 100 years from now on. If Intel and Samsung failed, there will be a third one, but TSMC is still irreplaceable, 99% of market volume will still go to TSMC if no market intervention from the government.

 

[delong.height]

some of you r understand ing might not be accurate. tw is not that under develop ed. they might have better infrastructure than Arizona.
why they can live on a lower salary.
main reason is they live in a apartment maybe 30 stories high.
which save them tremendous than a five or six bedroom house with pool and several garages.
and they maybe never will have that in tw , since there is no land for that.
so, another way to fix the gap is American people also adapt to a apartment with minimum utility cost.

Ahh I'm not sure what the apartment building has anything to do in this case.

But Semiconductor manufacturing industry has been this only high-paying industry in Taiwan. Name a second industry, but I'm sure anything you mentioned is because of TSMC.

TSMC is the only and last diamond TW has. Everything was designed around it

 

[delong.height]

have you heard of mediatek.
if their monthly spending is 2000 $ , five thousand would make them feel rich.
you are completely out of mind I would say. no wonder Intel is failing miserable ly.

Yes I heard of MediaTek, i know exactly what they do.

I don't get what you mean by 2000 of monthly spending, or five thousand or so. You may want to say those employee only deserve this much salary for their 'Selling their liver to TSMC' and 'no work life balance at all' spirits, but TSMC decided to let this culture continue with no ending in sight. I guess you want to convince me that this behavior should be perceived as normal, and dissing USA and Intel for their ambitions, but you should be aware that what TSMC does (keeping margin low and mistreating its employee) is not applauded in any way traditionally, because when China, USA's adversary, is reported of following actions (In one internment camp in Kashgar, Xinjiang, Uyghur detainees work as forced laborers to produce textiles. They receive little pay, are not allowed to leave, and have limited or no communication with family members. If family communication and visits are allowed, they are heavily monitored and can be cut short.) Almost every western clothing companies that use cotton are publicly announcing that they are cutting ties with China, especially in cotton. The only reason none are talking this issues about TSMC, is because TSMC is the only one.

Your statements sound inauthentic, mundane, superficial to me. You can keep telling lie, or hear me speak about the truth.

And it's also funny and weird to see how you try to make any connection between me and Intel's failure. Intel keeps making mistakes, one after another, year after year. But I'm just a not-smart investor who knows that Intel should be applauded for their action and courage of building foundry mainly in USA, instead of Taiwan. Public speaking to downplay the importance of TSMC and geopolitics from Pat Gelsinger doesn't look so bad to me at all now because TSMC is trying to kill any of its current/potential customers by lowering its profit margin, ensuring nobody but itself can benefit from this industry, making it the only one that survived. I'm an Intel shareholder since March of 2021, and I applauded Intel's teams and Pat Gelsinger for taking actions that restore advanced semiconductor manufacturing in America. Even if I lost all of my investments in Intel, And I do believe there are two ways to make this industry more lucrative to invest in. 1). TSMC actively raises profit margin by raising ASP, thereby encourages more competition. 2). US government put tariff in place that permanently hurt the industry because it discourage TSMC from being even more innovative, and making Intel feel that they always are backed by US government. I DON'T WANT THIS. And i think TSMC should take more active action instead of waiting until US government putting tariff in place.

 

[tedc]

But Semiconductor manufacturing industry has been this only high-paying industry in Taiwan. Name a second industry, but I'm sure anything you mentioned is because of TSMC.

TSMC is the only and last diamond TW has. Everything was designed around it

Dude, Taiwan's not some backwater country with TSMC and nothing else. For example, there's also the whole electronics supply chain: Acer, Asus, MSI, Foxconn, Pegatron, Wistron, Compal, Quanta, Delta Electronics, etc. And like half of them depend on Intel, too.

As an Intel shareholder, you seem awfully focused on making excuses about why it's someone else's fault. The truth is Intel decided on arguably the hardest path to success here. They've decided they need to match TSMC in manufacturing expertise, cost, and foundry services; pursue Nvidia for AI/graphics chips; hang on with AMD; etc. It was always an uphill battle, but we all want to see Intel do better and turn itself around.

 

[jim_22222]

Yes I heard of MediaTek, i know exactly what they do.

I don't get what you mean by 2000 of monthly spending, or five thousand or so. You may want to say those employee only deserve this much salary for their 'Selling their liver to TSMC' and 'no work life balance at all' spirits,

have you ever heard of a term job market.
for example in US in the fiftys people making five dollar an hour. they are not complain ing since that is the market.

in bay area engineers making half a million. in mid west maybe one third of that amount.

its not that they deserve one third, its just the market.

but TSMC decided to let this culture continue with no ending in sight. I guess you want to convince me that this behavior should be perceived as normal, and dissing USA and Intel for their ambitions, but you should be aware that what TSMC does (keeping margin low and mistreating its employee) is not applauded in any way traditionally, because when China, USA's adversary, is reported of following actions (In one internment camp in Kashgar, Xinjiang, Uyghur detainees work as forced laborers to produce textiles. They receive little pay, are not allowed to leave, and have limited or no communication with family members. If family communication and visits are allowed, they are heavily monitored and can be cut short.) Almost every western clothing companies that use cotton are publicly announcing that they are cutting ties with China, especially in cotton. The only reason none are talking this issues about TSMC, is because TSMC is the only one.

Your statements sound inauthentic, mundane, superficial to me. You can keep telling lie, or hear me speak about the truth.

And it's also funny and weird to see how you try to make any connection between me and Intel's failure. Intel keeps making mistakes, one after another, year after year. But I'm just a not-smart investor who knows that Intel should be applauded for their action and courage of building foundry mainly in USA, instead of Taiwan. Public speaking to downplay the importance of TSMC and geopolitics from Pat Gelsinger doesn't look so bad to me at all now because TSMC is trying to kill any of its current/potential customers by lowering its profit margin, ensuring nobody but itself can benefit from this industry, making it the only one that survived. I'm an Intel shareholder since March of 2021, and I applauded Intel's teams and Pat Gelsinger for taking actions that restore advanced semiconductor manufacturing in America. Even if I lost all of my investments in Intel, And I do believe there are two ways to make this industry more lucrative to invest in. 1). TSMC actively raises profit margin by raising ASP, thereby encourages more competition. 2). US government put tariff in place that permanently hurt the industry because it discourage TSMC from being even more innovative, and making Intel feel that they always are backed by US government. I DON'T WANT THIS. And i think TSMC should take more active action instead of waiting until US government putting tariff in place.

 

[jim_22222]

Dude, Taiwan's not some backwater country with TSMC and nothing else. For example, there's also the whole electronics supply chain: Acer, Asus, MSI, Foxconn, Pegatron, Wistron, Compal, Quanta, Delta Electronics, etc. And like half of them depend on Intel, too.

As an Intel shareholder, you seem awfully focused on making excuses about why it's someone else's fault. The truth is Intel decided on arguably the hardest path to success here. They've decided they need to match TSMC in manufacturing expertise, cost, and foundry services; pursue Nvidia for AI/graphics chips; hang on with AMD; etc. It was always an uphill battle, but we all want to see Intel do better and turn itself around.

I do agree with his or her point of view that tsmc is not a saint as it appears.
if you know the history of memory business.
he or she does have some inaccurate perception of Asia companies.

Intel made the right move in the seventy by investing in Israel and Malaysia. but fail ed to realize the potential of Taiwan, and still refuse to admit they made a mistake.