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THE SEMICONDUCTOR SURVIVAL BATTLE Part 1 of 5 Lip-Bu Tan (Intel) vs. C.C. Wei (TSMC)

Daniel Nenni

Daniel Nenni

Admin
Staff member
Intel Versus TSMC.jpg


By Tal Horowitz

Everyone thinks Intel is making a comeback. They're wrong.

While tech media celebrates Intel's 18A process and government bailouts, I spent months researching what's really happening between Lip-Bu Tan and C.C. Wei - two CEOs locked in the most consequential corporate battle of our generation.

The truth? This isn't a competition. It's a controlled demolition.

Intel burns $5 billion quarterly trying to reclaim a crown TSMC never plans to return. Tan inherited a company that spent a decade making catastrophic decisions.

Wei? He's sitting on 90% of the world's advanced chip production, with Apple, Nvidia, and AMD as hostages to his supply chain.

But here's what nobody's talking about:

Tan isn't fighting to win. He's fighting to survive long enough for a merger, acquisition, or government takeover. Every "breakthrough" announcement is theater for shareholders and senators. Every partnership with AWS and Microsoft is a desperate plea for relevance.

Meanwhile, Wei plays a different game entirely - one where the US government begs Taiwan for access, where geopolitical tension becomes leverage, where controlling 2nm production means controlling the future of AI, computing, and national security.

I documented this battle across five detailed posts - from Tan's impossible turnaround mandate to Wei's calculated dominance, from the emotional toll on both leaders to the backroom deals that will reshape the industry.

The semiconductor war isn't about technology anymore. It's about pride, legacy, and two men who know only one of them will be remembered as the architect of the AI age.

The other? A footnote in the story of American industrial decline.

Want to know which CEO is already planning their exit strategy?

Read the full 5-part series

The battle for semiconductor supremacy isn't what you think it is.

THE SEMICONDUCTOR SURVIVAL BATTLE Part 1 of 5 Lip-Bu Tan (Intel) vs. C.C. Wei (TSMC) - Tal Horowitz

PART 1: ORIGINS - The Immigrant's Gamble vs. The Farmboy's Ascent A tale of two men from opposite worlds, destined to collide in the battle for the future of
talhorowitz.com talhorowitz.com
 
Daniel Nenni said:
View attachment 3812

By Tal Horowitz

Everyone thinks Intel is making a comeback. They're wrong.

While tech media celebrates Intel's 18A process and government bailouts, I spent months researching what's really happening between Lip-Bu Tan and C.C. Wei - two CEOs locked in the most consequential corporate battle of our generation.

The truth? This isn't a competition. It's a controlled demolition.

Intel burns $5 billion quarterly trying to reclaim a crown TSMC never plans to return. Tan inherited a company that spent a decade making catastrophic decisions.

Wei? He's sitting on 90% of the world's advanced chip production, with Apple, Nvidia, and AMD as hostages to his supply chain.

But here's what nobody's talking about:

Tan isn't fighting to win. He's fighting to survive long enough for a merger, acquisition, or government takeover. Every "breakthrough" announcement is theater for shareholders and senators. Every partnership with AWS and Microsoft is a desperate plea for relevance.

Meanwhile, Wei plays a different game entirely - one where the US government begs Taiwan for access, where geopolitical tension becomes leverage, where controlling 2nm production means controlling the future of AI, computing, and national security.

I documented this battle across five detailed posts - from Tan's impossible turnaround mandate to Wei's calculated dominance, from the emotional toll on both leaders to the backroom deals that will reshape the industry.

The semiconductor war isn't about technology anymore. It's about pride, legacy, and two men who know only one of them will be remembered as the architect of the AI age.

The other? A footnote in the story of American industrial decline.

Want to know which CEO is already planning their exit strategy?

Read the full 5-part series

The battle for semiconductor supremacy isn't what you think it is.

THE SEMICONDUCTOR SURVIVAL BATTLE Part 1 of 5 Lip-Bu Tan (Intel) vs. C.C. Wei (TSMC) - Tal Horowitz

PART 1: ORIGINS - The Immigrant's Gamble vs. The Farmboy's Ascent A tale of two men from opposite worlds, destined to collide in the battle for the future of
talhorowitz.com talhorowitz.com
Click to expand...

"A tale of two men from opposite worlds, destined to collide in the battle for the future of semiconductors."

He might be able to turn it into a movie plot.
 
MKWVentures said:
LBT has solved the initial survival phase with deal making. Now he is working on the New Intel for the future. Bigger deals to come and a very different structure.

LBT has fixed 80% of the market cap destruction that his predecessor caused.

amazing what can happen in 8 months
Click to expand...
Well fixing market cap won't solve the core problem of mismanagement easily at least Tan made the hard but necessary decision of cutting Pat should have cut people as well.
 
If Pat had made such deep cuts product development would have been delayed so Intel would be even less competitive than they are.
I think the mistakes Pat made was not stopping issuing dividends immediately, and building too many fabs. He adjusted this but just before he left.

The fab construction binge would have been fine had the US government delivered the funds it was supposed to. But they did not. Intel should have expected this. Governments are always slow to give money.

Arrow Lake was average. But Lunar Lake and Granite Rapids are great products.

I would be surprised if Lip-Bu's cuts aren't delaying process development and the new 18A server chips.
 
Last edited:
samwilde said:
If Pat had made such deep cuts product development would have been delayed so Intel would be even less competitive than they are.
I think the mistakes Pat made was not stopping issuing dividends immediately, and building too many fabs. He adjusted this but just before he left.

The fab construction binge would have been fine had the US government delivered the funds it was supposed to. But they did not. Intel should have expected this. Governments are always slow to give money.

Arrow Lake was average. But Lunar Lake and Granite Rapids are great products.

I would be surprised if Lip-Bu's cuts aren't delaying process development and the new 18A server chips.
Click to expand...
I think Panther Lake not launching this year with limited notebooks on self in Q4 with EEP is likely the result of headcount reductions (both PG & LBT) and focus on margins imo. Just my guess ofc.
 
samwilde said:
The fab construction binge would have been fine had the US government delivered the funds it was supposed to. But they did not. Intel should have expected this. Governments are always slow to give money.
Click to expand...
Disagree. The fab construction binge had its roots in a hyper-optimistic misunderstanding of how much and how fast foundry business would come to Intel plus the perverse incentive of getting gov’t money for building something not needed.

The of the 4 fab projects (AZ, Ohio, Israel, and Germany) only one was needed though 3 continue albeit at snails paces.

At current growth rates Intel will be sitting on 20 to 30 years of fab space. A huge millstone.
 
dkr1986 said:
I think Panther Lake not launching this year with limited notebooks on self in Q4 with EEP is likely the result of headcount reductions (both PG & LBT) and focus on margins imo. Just my guess ofc.
Click to expand...
More likely the result of technology maturity not headcount reductions. If everything were ready to go and the product is as good as promised then resources would be poured into the ramp.
 
sit said:
More likely the result of technology maturity not headcount reductions. If everything were ready to go and the product is as good as promised then resources would be poured into the ramp.
Click to expand...
That very well could be the reason. But we have already started seeing perf leaks like we saw prior to LNL EEP launch between TechTour (June 2024) & product launch (September 2024). Also we are seeing Panther lake based laptops being showcased for public.

https://twitter.com/x/status/1983844466114097652

So I think If they wanted, they could have done limited volume launch for this holiday season with EEP (probably not very good margin wise as volume is low). But head count reductions must have eaten into the device driver readiness and other supporting stuff for a good launch etc. Again just my speculation.
 
Last edited:
samwilde said:
If Pat had made such deep cuts product development would have been delayed so Intel would be even less competitive than they are.
I think the mistakes Pat made was not stopping issuing dividends immediately, and building too many fabs. He adjusted this but just before he left.

The fab construction binge would have been fine had the US government delivered the funds it was supposed to. But they did not. Intel should have expected this. Governments are always slow to give money.

Arrow Lake was average. But Lunar Lake and Granite Rapids are great products.

I would be surprised if Lip-Bu's cuts aren't delaying process development and the new 18A server chips.
Click to expand...

The CHIPS Act and Congress’ intention are to provide subsidies, loans, and tax credits as incentives for companies to build factories and manufacture chips in the United States. The full name of the legislation is the “Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act of 2022.”

It uses taxpayers’ money to encourage for profit companies such as TSMC, Intel, TI, Micron, SK hynix, Samsung, and many others to expand their manufacturing in the United States. It is not bailout money. If a company cannot afford to build and operate a profitable semiconductor facility in the US, then it should not apply for CHIPS Act funding in the first place. These subsidies are not a substitute for a company project's financial viability or capability.

The Commerce Department’s CHIPS Program Office generally expects that direct funding awards will cover between 5% and 15% of a project’s total capital expenditures.

Unfortunately, under Pat Gelsinger’s leadership, Intel sought CHIPS Act money without wanting to meet the milestone and deliverable requirements attached. Intel aimed to use taxpayers’ funds to build fabs, patch financial gaps, pay dividends, buy back stocks, and operate freely without accountability. Pat Gelsinger's misjudgement is the primary reason for the late arrival of subsides.
 
hist78 said:
Unfortunately, under Pat Gelsinger’s leadership, Intel sought CHIPS Act money without wanting to meet the milestone and deliverable requirements attached. Intel aimed to use taxpayers’ funds to build fabs, patch financial gaps, pay dividends, buy back stocks, and operate freely without accountability. Pat Gelsinger's misjudgement is the primary reason for the late arrival of subsides.
Click to expand...
A lot of people here know I'm not a fan of Gelsinger's leadership, but what's your evidence that the company planned to use government money to do stock buybacks? In fact, the agreement with the USG to get CHIPS Act money specifically excluded stock buybacks for five years.
 
blueone said:
A lot of people here know I'm not a fan of Gelsinger's leadership, but what's your evidence that the company planned to use government money to do stock buybacks? In fact, the agreement with the USG to get CHIPS Act money specifically excluded stock buybacks for five years.
Click to expand...

Yes, this can be interpreted in two different ways.

My view:
The US government didn’t fully trust that Intel would refrain from using taxpayer funded support for share buybacks. Therefore, the restriction was explicitly written into the final agreement to prevent Intel from doing so.

Your view:
Since both the US government and Intel had already agreed not to use these taxpayers' money for share buybacks, the restriction was included in the final agreement for formality and transparency.



Based on Pat Gelsinger’s public comments in 2023 and 2024, it was clear that Intel was not pleased with the restrictions and milestone based structure of the CHIPS Act funding. Intel’s final funding agreement was also noticeably delayed.

In contrast, we did not hear much from TSMC, GlobalFoundries, Micron, SK Hynix, Texas Instruments, Samsung, Analog Devices, or other semiconductor companies complaining about the CHIPS Act requirements. In fact, shortly after the 2024 US presidential election, the Biden Administration announced the final funding agreement with TSMC on November 15, 2024. Eleven days later, on November 26, 2024, Intel’s final funding agreement was announced.

Given the timing, one could reasonably assume that there were significant disagreements on several issues between Intel and the US Department of Commerce. It appears Commerce Department could no longer delay announcing the long awaited agreement with TSMC, even though TSMC is a foreign company.
 
hist78 said:
Yes, this can be interpreted in two different ways.

My view:
The US government didn’t fully trust that Intel would refrain from using taxpayer funded support for share buybacks. Therefore, the restriction was explicitly written into the final agreement to prevent Intel from doing so.

Your view:
Since both the US government and Intel had already agreed not to use these taxpayers' money for share buybacks, the restriction was included in the final agreement for formality and transparency.



Based on Pat Gelsinger’s public comments in 2023 and 2024, it was clear that Intel was not pleased with the restrictions and milestone based structure of the CHIPS Act funding. Intel’s final funding agreement was also noticeably delayed.

In contrast, we did not hear much from TSMC, GlobalFoundries, Micron, SK Hynix, Texas Instruments, Samsung, Analog Devices, or other semiconductor companies complaining about the CHIPS Act requirements. In fact, shortly after the 2024 US presidential election, the Biden Administration announced the final funding agreement with TSMC on November 15, 2024. Eleven days later, on November 26, 2024, Intel’s final funding agreement was announced.

Given the timing, one could reasonably assume that there were significant disagreements on several issues between Intel and the US Department of Commerce. It appears Commerce Department could no longer delay announcing the long awaited agreement with TSMC, even though TSMC is a foreign company.
Click to expand...
Facts versus conjecture.

Do you have even one quote from Gelsinger stating that he wanted to use USG funding for stock buybacks?
 
hist78 said:
Unfortunately, under Pat Gelsinger’s leadership, Intel sought CHIPS Act money without wanting to meet the milestone and deliverable requirements attached. Intel aimed to use taxpayers’ funds to build fabs, patch financial gaps, pay dividends, buy back stocks, and operate freely without accountability. Pat Gelsinger's misjudgement is the primary reason for the late arrival of subsides.
Click to expand...
It was not so much not wanting to meet the milestones as it was they lacked the business needed to warrant the milestones.

As CHIPs was taking shape Intel was already building in Israel the fab they needed. With the promise of govt subsidies and an overly optimistic view of poaching business from TSMC they started 2 fabs they didn’t need in the US. Had they parked/cancelled Israel and started just one fab in the US space-wise things would have made sense. Then, with the promise of European money they announce and started early works on another unneeded fab in Germany and an unneeded A/T factory in Poland.

When the bottom fell out it was convenient enough to scrap Germany and Poland, but Israel and Ohio remain millstones.
 
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