Intel Layoffs: Is Future U.S. Chip Independence in Trouble

The thing that will surprise a lot of people is how low Intel pay is in the USA.

Just look up Hardware Engineer Intel on Payscale or other wage comparison site. Other companies are paying 50% more for the equivalent level. Eg. "Intel Bay Area Hardware Engineer salary" level 5 vs entry level "Google/Meta/Nvidia/AMD/Apple hardware engineer salary". On a direct, with no PPP or similar conversion comparison they do pay more for Bay Area talent than TSMC does for talent in Taiwan but Taiwan has significantly lower costs of living so you really wouldn't be better off even as talent in Taiwan migrating for an Intel job.

There's no way Intel is getting the best talent nor has it been for a long time. They do not compete in the slightest and they haven't in a long time. They do not even come close. Oh and they are doing layoffs of the cheapest hardware engineering workforce in the USA right now. Lets see how this pans out for them.

> Atkinson says that while the CHIPS Act is a start, the United States is likely to need additional funding, support, or incentives if the goal is to see competitive leading-edge semiconductor fabs owned by U.S. corporations. “We’ve hit a double in the first inning, and that’s pretty good,” he says. “But the problem is everybody in Washington thinks we’re done.”

This is the problem.

Asia has seen semiconductor manufacturing as a strategic investment and so setup long term benefits, subsidies and education programs. They also have leadership that stays in power long enough to see these plans through.

Meanwhile the US has been enjoying the easy gains of SW companies juiced up on low interest rates (which leads to inflation, which favors industries that require very little capex). Finally people are realizing that we still need HW companies but all we get is a one off band-aid solution, just enough for the industry to survive until the next election.

It really is like the old joke that Asia is playing go while the US is playing chess (strategic vs tactical thinking).

Companies that want bailouts, if they are of national interest, should get those in exchange for partial ownership. When private ownership fails, national funds should come with national controls.

What matters the most is the product. Intel has had a serious of serious problems on that front over the last decade. From product delays, to Speculative Execution security concerns, to oxidation/voltage issues. Meanwhile their competition has been absolutely killing it, to the point where their X86 moat is collapsing. Their major software partner, Microsoft, is spending $$$ to open the option to work with other vendors. The fact that Apple successfully walked away is a major advantage for MacOS over Windows.

All the tax incentives, all of the trade deals, all of the weight of the federal government won’t matter as long as Intel continues to produce inferior products. Now they have 15% fewer minds to work with. In twenty years it won’t matter if Intel is still operating fabs or not, the chips will be so far behind all the serious workloads will be on other silicon.

I don’t have any mind for policy. Law just seems like very confusing hyper-spaghetti code.

But, I really hope the CHIPS act is well-targeted.

We don’t need Intel, the chip designers, anymore. I mean, their chips are fine basically, or maybe they aren’t so great, whatever, they can still sell them, I don’t care.

But we absolutely and desperately need a chip foundry company and if IFS can be that, they deserve a chance (and are probably the best bet we’ve got, unless somebody can convince TSMC to send us some folks, but that seems pretty unlikely).

Sadly it has been from the beginning. Companies in the US only care about profits, not about what is good for the Country they are in. And in reality that is how capitalism works.

Pouring money into these companies will do nothing. What is needed is laws with real punishment for the Company and maybe the CEOs. IIRC, there was a time were all defense contractors had to be 100% sourced in the US, not now.

So I would say a law like this: "70% of all products you sell and all the components must be 100% built in the US. If not, you are fine of 30% of your pretax worldwide revenue, including international subsidiaries". If you leave the US, you will be nationalized.

Have we tried more stock buybacks and layoffs? Will that help?

Can the US government nationalize Intel in the worst-case scenario?

The US doesn't make much consumer electronics. How can it remain in ICs?

Someday, Foxconn will figure out that it doesn't need Apple any more.

Isn't AMD an American company

edit: I guess they don't manufacture their own chips though

Apple seems to be just as much a player as Intel.

Our legacy "computer industry" was a lend/lease styled business model industry. Our legacy "computer companies" were financing companies. Not "computing" companies. That lends/lease financing business model justified the sales forces operating on commissions. All that is over now.

Everything has changed now. Computer automation (CPU, RAM, Storage, I/O) is now priced in the mere 100's of dollars. That signifies "stuff" you can buy at Best Buy or even 7/11. Stuff you can "buy" signifies "stuff" that cannot be sold on commission. There is no more role for financing (lend/lease). There are no roles for sales forces operating on commissions.

I love bits and bytes. So what? Follow the money.