Question [WSJ] Intel in talks to buy GloFo

[jpiniero]

Wat. Says deal would be about $30B if the deal goes through.

WSJ News Exclusive | Intel Is in Talks to Buy GlobalFoundries for About $30 Billion

A deal for chip maker GlobalFoundries would be Intel’s largest acquisition. It comes as Intel is launching a major push to become a chip manufacturer for other companies.

www.wsj.com

 

[sandorski]

Intel is heavily lobbying both US and EU as the knight in shining armor that could restore balance to global manufacturing.

Spoiler: Manufacturing split: today vs. goal

View attachment 47217

The first thing the knight does is... make sure no other local adventurers present themselves before the court.

This could be bad. Prop up a failing Industry for Political reasons. Potentially even punishing Competitors for non-compliance in the scheme.

 

[DrMrLordX]

Intel is heavily lobbying both US and EU as the knight in shining armor that could restore balance to global manufacturing.

Spend $30 bil to make $50 bil? Plausible, if <insertpoliticianhere> is stupid enough not to notice the play.

This could be bad. Prop up a failing Industry for Political reasons. Potentially even punishing Competitors for non-compliance in the scheme.

Boeing 2.0

 

[Ajay]

Spend $30 bil to make $50 bil? Plausible, if <insertpoliticianhere> is stupid enough not to notice the play.
Boeing 2.0

<insertpoliticianhere> knows the play and goes along, so long as some of that payday lands in his/her state.

 

[eek2121]

This could be bad. Prop up a failing Industry for Political reasons. Potentially even punishing Competitors for non-compliance in the scheme.

Intel is hardly failing. Their revenue is sufficient enough they could buy out AMD if they knew they could get away with it.

 

[sandorski]

Intel is hardly failing. Their revenue is sufficient enough they could buy out AMD if they knew they could get away with it.

That armour only lasts so long. AMD isn't the only sword striking at Intel.

 

[NTMBK]

Unless GloFo has some talented Engineers that would benefit Intel, this feels like a consolidation of the Has-Been Foundries. Not sure how this helps anyone.

There's more to being a successful foundry than just building a good process. You need to work well with external tools, support a wide range of external IP, communicate well, etc. GloFo have that kind of experience, whereas Intel doesn't.

 

[KompuKare]

Intel is heavily lobbying both US and EU as the knight in shining armor that could restore balance to global manufacturing.

Spoiler: Manufacturing split: today vs. goal

View attachment 47217

The first thing the knight does is... make sure no other local adventurers present themselves before the court.

Yes, came into this thread to make a similar point: this looks a like a play to be the sole (significant) recipient of that state aid. I'm sure for show some smaller players will get some pocket change though.

 

[positivedoppler]

$30 billion to buy GF's customer base? Somehow I doubt that makes any financial sense.

It'll probablybe some mix if cash and

$30 billion to buy GF's customer base? Somehow I doubt that makes any financial sense.

All that aside, it's a bit stunning that Intel sees GF as a better use of $30 billion than investing in their own fabs/fab research.

Intel does not have to invest much cash at all into this.
It'll probably be some mix of cash and mostly Intel stocks.

If Intel pulls this off, I hope the government conditions any subsidies with the condition that Intel Fab has to be broken up.

 

[Arkaign]

There are a couple of aspects to all of this that I think bear consideration. The CCP is becoming increasingly belligerent with all kinds of things, like blocking vaccine sales to Taiwan

Taiwan says China blocked deal with BioNTech for COVID-19 shots

Taiwan directly accused China for the first time on Wednesday of blocking a deal with Germany's BioNTech SE (22UAy.DE) for COVID-19 vaccines, in an escalating war of words after Beijing offered the shots to the island via a Chinese company.

www.reuters.com

This is addition to a lot of medicine and materials that were single sourced via China, and caused shortages and present significant risks not just economically, but in literal life or death scenarios.

The other major aspect is the rapid rise in demand for more and more semiconductor products, and the capacity with TSMC just isn't large enough. Some of this is due to the EUV systems being expensive and slow to procure, but also because there simply aren't enough fabs to meet rising global demand. This of course causes price hikes, but I believe we're also seeing fewer options available because from a business perspective it makes sense to go ahead and use limited capacity for purely the highest ASP items and just skip the entry and midrange segments if the demand for high end is enough to absorb the entire allocation. See : Zen3 and RDNA2 dGPUs. Amazing product, but the options are pathetic for affordable options, things to match Pentium, i3, and even i5 at various price points. AMD owes us nothing, they're just following fiduciary duties in this regard, and without additional capacity, this may only get worse as time goes on. Ditto Nvidia and their recent GPUs. Where is the equivalent 2050ti, 3050, $139-$199 range stuff? Answer : although there would be a huge market for these SKUs, the capacity is fully made and sold as much more expensive tiers because they can sell their entire capacity with ease, so why bother with affordable tiers at all.

This has also largely saved Intel from much worse damage by AMDs excellent product options. AMD can in no way come close to meeting enough demand to put more than a marginal dent in Intel market share, they simply can't deliver the volume due to lack of manufacturing capacity.

More fab investment and diversity in node options (eg; 14nm and even higher is fine for a lot of the auto and industrial SOCs, they just need to be reliable and available) is a good thing if combined with locales out of the reach of CCP related risks.

As of right now, if a war over Taiwan began, it would be utterly devastating not just in humanitarian realms, but cut semiconductor availability off at the knees. It might literally be a half decade+ to much longer to even see new generations of phones etc, if Taiwan is a smoldering wasteland. Everybody loses.

 

[Asterox]

That armour only lasts so long. AMD isn't the only sword striking at Intel.

Yes, but if someone has "Eyes wide shut perspective or understanding", that person he cannot see that red reality.

 

[ThatBuzzkiller]

There are a couple of aspects to all of this that I think bear consideration. The CCP is becoming increasingly belligerent with all kinds of things, like blocking vaccine sales to Taiwan

Taiwan says China blocked deal with BioNTech for COVID-19 shots

Taiwan directly accused China for the first time on Wednesday of blocking a deal with Germany's BioNTech SE (22UAy.DE) for COVID-19 vaccines, in an escalating war of words after Beijing offered the shots to the island via a Chinese company.

www.reuters.com

The CCP didn't block the vaccine sales. Tsai and the DPP were just incompetent at securing distribution rights from BNT because they didn't believe that their vaccine would succeed! Meanwhile, her opposition Terry Gou along with Foxconn and TSMC secured the BNT vaccine through proper channels with Fosun and will donate the excess to local governments ...

Tsai would sacrifice lives rather than lose political credibility. She'd prefer to be a president in a pandemic instead of admitting her own fault and closing a deal with Fosun. Cooperating with the CCP would be seen as the biggest betrayal against her own voters so she doesn't want to lose the next election ...

 

[Arkaign]

This looks precisely like the usual pressure from Beijing :

Chinese executive allegedly blocked Taiwan's purchase of BioNTech vaccines | Taiwan News | 2021-06-21 22:10:00

Chinese executive accused by Taiwanese media of being 'cell' inside BioNTech imposing Beijing's will | 2021-06-21 22:10:00

www.taiwannews.com.tw

"Chen said that on Jan. 8, four hours after the CECC and BioNTech appeared to be close to signing an agreement, the German firm "strongly recommended" that the CECC remove the words "our country" (我國) from the Chinese version of the press release."

The only entity that puts pressure to remove statements of Taiwan being a country is the CCP.

 

[Doug S]

As of right now, if a war over Taiwan began, it would be utterly devastating not just in humanitarian realms, but cut semiconductor availability off at the knees. It might literally be a half decade+ to much longer to even see new generations of phones etc, if Taiwan is a smoldering wasteland. Everybody loses.

The last thing China wants is for Taiwan to become a "smoldering wasteland". They view them as their misguided brothers who need to be brought back into the fold, they would not consider actions that might result in significant loss of life. Think of it like Vulcans and Romulans reuniting, not America's Civil War.

Though Taiwan wouldn't need to become a smoldering wasteland to stop the flow of chips from TSMC's most advanced nodes. If China could somehow swoop in without advance warning and take Taiwan with zero loss of life, there's zero reason to believe the majority of Taiwan's citizens would cooperate to become part of China's authoritarian state. China wouldn't get their hands on TSMC's advanced nodes because not only would few of their employees cooperate, those massive EUV machines require tons of support from ASML to maintain in an operational state.

TSMC's expansion into Arizona, with discussions now for expansion into the EU and Japan, even though the most advanced node would remain in Taiwan provides somewhat of a backstop. Obviously there would be massive shortages and things would be far worse than the electronics supply chain issues we face today, but TSMC would survive internationally and China would still not gain advanced semiconductor production (though that would not be the goal of any attempt at reunification)

I still feel like this is extremely unlikely. China could obviously beat them militarily in a week if taking land was the goal. They don't want the land, they want the people - and they want the people with the economy intact because it will be much harder to get them to want to become part of greater China if their livelihood has been destroyed. China is having enough trouble integrating Hong Kong which is a fraction of the size and didn't require any action on their part to "retake" beyond waiting for the 99 year lease to expire.

 

[ThatBuzzkiller]

The only entity that puts pressure to remove statements of Taiwan being a country is the CCP.

Then they should deal with having no pride because of their stupidity to refuse investment. Otherwise better luck next time ...

May God have mercy on the DPP and their voters if they're in another health crisis and need health services provided by none other than *gasps* the CCP itself ... /s

 

[Ajay]

If China could somehow swoop in without advance warning and take Taiwan with zero loss of life, there's zero reason to believe the majority of Taiwan's citizens would cooperate to become part of China's authoritarian state.

I know we are getting into P&N territory, but Taiwan has a sufficiently strong military to prevent any such sudden take over. It would be all out war and we, and possibly our allies, would get involved to some extent. Too much at stake.

 

[Arkaign]

I agree with the bulk of that, albeit there is a huge problem with invading Taiwan, it certainly couldn't be done in a week.

China is building up it's amphibious assault capabilities, but it's probably the single most difficult aspect of any large military operation. There are very few feasible areas with which to land invasion forces in Taiwan, and they would be dialed in with artillery, missiles, and mines like nobody's business. Then the western approaches have mountainous, incredibly difficult terrain that would preclude any meaningful armored advance. The best options lie on the East side of the island which would only extend the period of vulnerability to the PLAN vessels in transit.

Paratroopers would be suicidal because they don't have the delivery capacity to achieve tactical superiority, and couldn't land with sufficient hardware to support and establish any FOB.

It would be an absolute nightmare, and I have my doubts that even a full US mobilization could successfully achieve an amphibious invasion of Taiwan without a very long air campaign of perhaps months leading up to it.

 

[Doug S]

I agree with the bulk of that, albeit there is a huge problem with invading Taiwan, it certainly couldn't be done in a week.

China is building up it's amphibious assault capabilities, but it's probably the single most difficult aspect of any large military operation. There are very few feasible areas with which to land invasion forces in Taiwan, and they would be dialed in with artillery, missiles, and mines like nobody's business. Then the western approaches have mountainous, incredibly difficult terrain that would preclude any meaningful armored advance. The best options lie on the East side of the island which would only extend the period of vulnerability to the PLAN vessels in transit.

Paratroopers would be suicidal because they don't have the delivery capacity to achieve tactical superiority, and couldn't land with sufficient hardware to support and establish any FOB.

It would be an absolute nightmare, and I have my doubts that even a full US mobilization could successfully achieve an amphibious invasion of Taiwan without a very long air campaign of perhaps months leading up to it.

The "one week" was talking about simply "taking the land". If you want the land, and don't care about the people on it (or international condemnation) then you can destroy all defensive capability with sufficient number of bombs. Might look like Dresden, or even Hiroshima, but it would "take the land". Maybe a week is too short, I'm no military expert, but it is clear it could be done though it might get messy if it takes long enough for others to get involved.

Anyway, it is pointless to debate how long a hypothetical massive military takeover of Taiwan would require since China wouldn't do that any more than the US would carpet bomb Cuba to end the Castro regime.

 

[allisolm]

Hello! This is not Politics and News. Please stop trying to turn CPUs into P&N. No more political postings.

Administrator allisolm

 

[Abwx]

ATIC poured 20bn through the 2000s in GF, not sure that a comparatively paltry 30bn would be a nice ROI given all the time, and now that semiconductors are benefitting from some inflated prices.

 

[NTMBK]

ATIC poured 20bn through the 2000s in GF, not sure that a comparatively paltry 30bn would be a nice ROI given all the time, and now that semiconductors are benefitting from some inflated prices.

That's the sunk cost fallacy in action! That money is gone and isn't coming back.

 

[soresu]

All that aside, it's a bit stunning that Intel sees GF as a better use of $30 billion than investing in their own fabs/fab research. What do they really want out of this deal? 12FDX? Access to some old modified Samsung nodes? Does GF have any outstanding orders for EUV equipment we don't know about yet?

I'd pin it as easy bake fab.

The infrastructure is already built out, just needs new equipment and staff brought in to up to speed on Intel's current and future nodes.

I know it's probably more complex than that, but surely getting good infrastructure to begin with is a decent portion of the problem?

 

[A///]

$30 billion to buy GF's customer base? Somehow I doubt that makes any financial sense.

TBF this is Intel. Financial horsepower or whatever the cult calls it makes no sense when they're known for wasting money.

 

[A///]

Does GF have any outstanding orders for EUV equipment we don't know about yet?

Not that I know of. Samsung and TSMC have the bulk of outstanding orders with some smaller but known foundries ordering up equipment, too. To my knowledge, Intel still has some outstanding orders from ASML.

This last year to year and a half has been very strange when it comes to Intel news. I have no idea what to make of it anymore.

 

[Ajay]

Not that I know of. Samsung and TSMC have the bulk of outstanding orders with some smaller but known foundries ordering up equipment, too. To my knowledge, Intel still has some outstanding orders from ASML.

If so, it's not known publicly to anyone. A recent analysis showed current and future Intel EUV purchases, can't recall the name of the firm, but it was pretty grim. 20K wpm in 2023 I think.

 

[Saylick]

If so, it's not known publicly to anyone. A recent analysis showed current and future Intel EUV purchases, can't recall the name of the firm, but it was pretty grim. 20K wpm in 2023 I think.