The United States Government should directly fund the Intel Corporation and I’ll tell you why. Intel’s financial options narrow by the day. They are under pressure from a combination of falling revenue, high capital expenditure, and vanishing profits. In the third quarter of 2024 Intel lost $16.6 billion. There’s very little going RIGHT for Intel… and yet Intel is too big to fail.
The United States government needs to directly fund Intel so that 18a can be pushed over the finish line. Intel has bet so much on 18a that it may very well be make or break for the company as a whole. Direct funding for Intel could preserve jobs and insure the necessary investments on fabs are made. There have been too many firings already, Intel is never going to get its products out the door on time now and 18a could end up delayed.
Intel needs to get its employees back, contrary to popular opinion that Intel needs to slim down. The best employees have given up on Intel and / or left for much better run companies. Direct funding gives Intel the opportunity and time to retrieve those high quality employees while also ditching entrenched politicized middle management.
It’s almost a utopian vision now… which is sad. Intel has fallen so far that just getting back its high quality employees and ditching management is a utopian vision. But here we are.
Anyway, the point is Intel needs time and the Federal Government can give it time through direct funding. No loans, no wimpy grants that take forever, big fat capital investments and no more employee firings are the name of the game. Direct funding is an answer to a question that hasn’t been asked yet… what if Intel goes bankrupt? We can head off that question by getting ahead and boosting Intel’s cash reserves now.
But if the Biden Administration couldn’t bring itself to directly fund Intel then the Trump Administration definitely won’t. The Trump Administration is probably going to see Intel as a “loser” and may let it go bankrupt. In the Trump Administration’s mind I’m betting all they’ll care about is that the fabs will remain in American hands. They wont care about the chip design business. From their perspective there are plenty of chip design businesses in America and they’re all “winners”.
So the chip design business will be sold off and tens of thousands of jobs will be lost. It will be TSMCs gain. It’ll be AMD’s gain. It’ll be Nvidia’s gain. Everyone will gain except America. America won’t gain because our fragile semiconductor ecosystem will be smashed to bits. Our national security will take a massive blow.
Fabless semiconductor companies are NOT as desirable as they seem. Intel used to provide an anchor for the American semiconductor ecosystem where fabless companies never could. Without an anchor company the ecosystem will become listless.
That’s my pessimism talking. But even if I don’t get the whole picture right, I’m betting elements will turn out true.
So Intel needs direct funding to give it time and manpower and to push 18a over the finish line, it’s finances are getting worse, and the Trump Administration is never going to directly fund Intel. Fun!