They are a required / no alternatives industry by so much of the USA, with limited alternatives. Is it really more cost-effective for each of these companies to spend hundreds of billions of dollars to avoid tariffs when they could easily pass on these costs because we have no alternatives?
Now imagine the same scenario, but one side is willing to destroy themselves as collateral if they don’t get the result they want.
And what's the alternative for many of them? Lawsuits?
SCOTUS has quit doing their job. The checks and balances are out the window. There is no leadership / anyone in power at the national level when it comes to democracy in the US at this time.
Intel isn't dead. They've made some bad choices and investments but they're still huge. They have $30 billion in gross profit per year on an utterly boring, non-hype based business model. Get rid of some dead weight, write off the bad investments, improve their foundry business and their value easily grows multiples of what it currently is.
On top of it already being a shrewd business deal, doing a favour for the US government also potentially buys protection for TSMC and Taiwan from China. Plus the immediate tariff relief.
They’re a globally important company but they’re not ASML and they’re stuck between two superpowers and the threat of potential total war. They’ve had the misfortune of being sucked into geopolitical maelstrom and those tides are far too strong for any company to resist.
Sure. Go home and make chips. Pass the tarrif costs on to customers. Would US customers have a choice?
They also have 50 billion dollars in debt, and their cash flow situation has gotten so desperate that slices of future fab revenue have been pawned off to private equity, who now has a senior claim on the assets (as do the bondholders).
An equity stake and Intel is not something that a TSMC would want without coercion. It's just not a very attractive place to be an equity holder.
>Get rid of some dead weight, write off the bad investments, improve their foundry business and their value easily grows multiples of what it currently is.
As if it was that easy. The company has now been through multiple CEOs attempting to mix up these ideas in various ways. The last CEO tried to do a Hail Mary to improve the foundry business, but the balance sheet can't support it. Now the new CEO is essentially writing off those investments and putting them on the back burner. Considering that, getting rid of the dead weight will be difficult, considering the company itself is largely dead weight... The quality of their employees is not good, or at least not nearly at the level that needs to be (18A yields are alarmingly low, and that's the critical product that basically determines the company's future. 14a is already looking more and more distant despite it being the purported savior not even a year ago).
Realistically, their financial situation puts them right at the precipice of needing to shed the fabs, and/or permanently continue down the path of more Brookstone-like partnerships where they can spread the burden (which then caps the equity holder upside).
There is nothing "easy" about the current situation. Maybe without the 50 billion in debt, but nearly all of remedial paths are running into nasty balance sheet constraints. There's no more room to spend quarters rejiggering the thing.
Did I say they were? Google gross versus net margin.
> If their R+D and Capex investments stopped, the sum total of the existing+legacy cash flows wouldn't nearly cover Intel's substantial liabilities.
You sure? https://www.intc.com/financial-info/balance-sheet
Current assets are $43 billion. Total assets are $192 billion. $30 billion yearly in gross profit. Debt is only $50 billion. They still hold 75% market share. Repeat, they still sell 3 times more chips than AMD.
Yes, their balance sheet isn't as good as some fabless competitors but if TSMC helps them with their 14a yield then it looks like a good investment.
Also, having TSMC on board will surely help with their fab business. Again, between the US government needing them to survive, TSMC on board, plus the fact they still do have a decent core business, I think Intel (and TSMC's investment) will be fine.
They already built fabs in the US. The thing about protection money is the bully keeps asking for it again and again.
Have you heard of this story? https://www.eff.org/deeplinks/2007/10/qwest-ceo-nsa-punished...
The only telecom in America to resist turning on a domestic eavesdropping firehose tap for the government, was pounded to the edge of bankruptcy.
Intel and TSMC are both strategically important and favored-status corporations for the going concern of the United States, and large swaths of the federal appartatus are invested in their success, contracts, global projection, etc. That comes with a price. Naive to think they are independently operated companies.
He is threating Switzerland with 250% tariffs on meds while his people still suffer under horrendous health care prices. That man is beyond crazy
Of course the reality is you're just taxing Americans to subsidise Intel at that point, since tarrifs are a tax on Americans and not foreigners.
Trump has no idea what he is doing. HE can not replace Brazilian coffee, but at least it is "only" coffee. Not being able to replace a fab is a precarious situation.
Is he imagining invading Taiwan? China would consider that an invasion to its territory.
He was quoted regarding environmental concerns something to the effect of "I'll be dead by then".
I think that's really his POV. If you plan to live longer than Trump, he's really not for you.
Unfortunately this approach does not work when you lack a viable domestic alternative and you're up against a monopoly.
What will the US do if TSMC does not blink? Not buy TSMC made chips? Obviously that is impossible, so the logical conclusion is that American consumers will end up paying the tariffs.
Wouldn't that just mean that Taiwan has to choose between two villains, and China can take the advantage of this by changing its narrative and taking the position as a hero, protecting Taiwan from the US.
This has always been the case. I have never heard of a company absorbing tariffs on behalf of consumers in the day and age of "trickle down economics".
Even making them visible has drawn the ire of Trump a few times already.
But I generally agree that it can't go on forever / not how it works historically.
Why do you think that? Trump clearly wants them to use Intel's 18A which is likely similar to TSMC 2 year old N3P, which is not an impossible option.
https://www.reuters.com/business/retail-consumer/intels-new-...
The second China becomes powerful enough to throw their military around like the US is when I start supporting tech transfers the other way. A more distributed power structure is much better for overall progress.
This would be late timing.
Did we learn _nothing_ from the 2008 subprime mortgage crisis? Let them fail.
The unfortunate part is that the GOP has now repealed whatever protections were put in place on banks after that.
2025 says "hold my beer"
Whether it's good from a moral perspective or a long term perspective I guess is another matter, but I suspect if the government hadn't stepped in, we'd still be in the throes of the subprime crash even today. This is speaking as someone who is deeply anti-corporate.
So, to all the majority of haters in this thread (and all those who will soon downvote me) I say this... if you're an American think carefully about whom you want defining the economic & strategic reality your children will inherit. If you're not an American, or if you're larping as one, the game is over. There is bipartisan and widespread support for the US reasserting itself. We're not going out without a fight, if we do go down we're taking you with us, and more liklely than not - we're going to prevail and the world will avoid a flagrant dystopia for something still unpleasant, but far less so than a CCP, Qatar or Moscow run vision of the future.
Do I want Trump defining it? No way. Especially not the economic future. I don't trust his knowledge of economics as far as I could throw Trump Tower.
This is such an astonishing statement. US tech and industry have been enormous, outrageously successful at bringing wealth to the US. They have been welcomed with open arms worldwide, and have funnelled trillions into the US coffers. While Intel become a company of middle managers and suits, companies like TSMC filled the void and allowed Apple and nvidia, Qualcomm and Broadcom to become goliaths. Boo hoo.
For someone to do this crybaby routine about how maligned it is...good god. The total and complete lack of self-awarenesss is extraordinary.
The US has a monumental amount to fall, and idiotic, Stalinist actions like this are precisely how it can be rapidly sped up.
> The USA competes against countries and companies that are state owned and/or state infiltrated
Not only do US intelligence do economic espionage on behalf of US companies, the US government's enormous debt spend is a collosal socialist regime for US corporations. The US military has a $1T budget largely to dump into US firms (see the laughable recent billion dollars handed over to AI companies, though it's just a tiny sliver of the spend).
Regardless, it's pretty astonishing seeing the same people who forever called everything socialist/communist suddenly the biggest advocates of a Stalinist/Maoist Trump and his central planned economy. Utterly bizarre. Almost like all of their words were just partisan rhetoric of zero substance or value.
idk how we got to do this, like single producent of high end chips is not good for everyone
Whether it is correct or not, Trump seems to view the US as a larger version of Mar-a-Lago, so he'll always feel he can charge a premium for access to its consumer base and market while offering discounts to those he sees as ingratiating themselves.
But it is supposed to be a free market that should reward efficiency and competence, not prop up companies that don't have their act together. If the goal is domestic chip production, funneling funds to TSMC's proven fab operations and to build more US fabs makes more sense than bailing out Intel, regardless of whether it is improper to demand such concessions at all.
Latest mindfactory data suggests that in gaming consumer space is now 96% AMD, 4% Intel. Seriously:
https://www.reddit.com/r/pcmasterrace/comments/1mfu3cq/this_...
And doesn't sound like their next or next next nodes are in good shape either
duxup•2h ago
FirmwareBurner•2h ago
Why else has the US been overspending on military for decades and planting military bases and nuclear submarines all over the world, to become the world hegemony, if not to bully everyone in doing its bidding when push comes to shove?
I'm not defending the actions of the US, I'm just asking what are the other countries gonna do about it? Ally with Cuba, China, Iran and Russia to fight the US? Unlikely.
UK, Canada, Australia, New Zeeland are 5 eyes members and therefore lapdogs of the US, and the EU as much as they dislike the US due to Trump, has a laundry list of urgent domestic issues like Russia, no cheap energy, no high growth industry like tech, ageing population, economic stagnation or even decline, collapsing welfare and pension system, illegal immigration leading to a rise right wing extremism leading to crackdowns on freedom of speech and censorship leading to further social and political turmoil. So how is the EU gonna retaliate when they can't even keep themselves together?
What can they do now, when the US holds all the cards? Their only hope can be that the US collapses from internal issues, just like the Roman empire, but until then, they literally have no screws to turn on the US and just like the EU, Switzerland, etc, are forced to accept the terms of the US or have their already fragile economies suffer even more.
nemomarx•2h ago
exasperaited•2h ago
dismalaf•1h ago
They already are. The US defence industry buys from them no matter what. Which is why the US needs to ensure their survival. The concern isn't that Intel survives or not (the US would prop them up no matter what), but that they also remain on the cutting edge and the US doesn't lose out if, say, Taiwan falls to China.
notahacker•1h ago
The US doesn't need to be cut out of world trade altogether (it won't be obviously) to lose a lot at the margin, with the chief beneficiaries ironically being the country the current US administration most hate...
SpicyLemonZest•56m ago
notahacker•41m ago
SpicyLemonZest•13m ago
vkou•2h ago
That's not the roadmap to good management of anything, as literally anyone who has ever worked a job will tell you. How people can see an amalgamation of all the traits they despise in a peer or leader that they actually have to interact with, and go 'oh yeah this guy should be running the entire country, this will end well' is mindblowing.
The empire can run on fumes and momentum... for a while. No company or country is so exceptional that it can survive enough mismanagement, eventually you burn through the furniture, and piss away whatever lead or competency you had.
AnimalMuppet•1h ago
vkou•1h ago
wrs•1h ago
A_D_E_P_T•2h ago
The 90s were ~30 years ago. American economic and military capacity ain't what they used to be, and alienating your allies and friends is starting to look like a poor strategy.
neves•1h ago
alfiedotwtf•55m ago
There are other ways to assert power other than how big your nuclear arsenal is - Japan did just that by threatening to offload their US bonds only two months ago, and Europe’s trade negotiators will outclass Trump’s B-Team.
The world has moved on from “I have lots of nukes”.
couscouspie•6m ago
Hardly matters. As long as von-der-Leyen remains head of commission the European Union stays devoted to the US no matter the consensus of commission, parliament, national governments or the people.
Tadpole9181•51m ago
duxup•2h ago
exasperaited•2h ago
More prosaically, in the short term: TSMC are now effectively compelled to acquire Intel entirely or at least a controlling share, right?
Unless Trump's shakedown requires them to own 49% but then bans them from owning more than 50%, which would be the end of the USA as any sort of free market -- and I concede that is possible, because the USA now has a leader who acts more and more like an autocrat -- aren't TSMC essentially compelled by their own interests to find the just-greater-than 1% somewhere?
If you're blackmailing me into owning almost all of something but not getting control of what I owned, I think the logical next step is to forcibly gain control, yes? Because it turns the tables.
Not least because acquiescing even to buying 49% paints a target on my back.
Trump is not saving Intel: he is guaranteeing it is going to get broken up and sold off. He is destroying it. (More to the point he is immediately tying its existence to the success or failure of his own Asia-facing foreign policy, which means he is effectively asserting control over it)
paganel•2h ago
Otherwise I fully agree with you, this will definitely not work out in the long run, but who cares about the long run anymore in this day and age?
exasperaited•2h ago
The other important thing about this is that it dirties Intel almost immediately with presidential cheeto dust. So the value is going to fall over the long term, and this isn't the last sell-off they will have to do. Can you stop TSMC or a stalking horse for TSMC buying up parts of the rest?
Trump has created a powerful victim here.
HarHarVeryFunny•1h ago
I'd imagine they would be happy to have TSMC still selling to NVidia, Apple and AMD, and therefore a powerful lever in case of future US export controls/etc.
adgjlsfhk1•1h ago
HarHarVeryFunny•1h ago
Obviously a protracted or nasty war would have a severe impact, but it's hard to see why China would want to harm TSMC, even if worse case for US they stopped them from exporting.
ben_w•2h ago
Though from the POV of economic coercion, the question is probably more like "what's the USA's import/export market like relative to all my markets including domestic?", which is going to vary wildly by industry.
> Ally with China, Iran and Russia to fight the US?
Replace Iran with the EU, and yes, some or all of them.
> EU as much as they dislike the US, has a laundry list of urgent domestic issues like Russia,
Urgent, but affordable.
> no cheap energy, no tech industry,
Energy isn't meaningfully worse than anyone else, lots of tech but it's mostly local rather than global in scale
> ageing population, economic stagnation or even decline,
Like everyone else, including the USA
> collapsing welfare system
News to me. Also: Wasn't the USA's supposed to collapsing since Obama took power?
But also, not a unified welfare system over all member nations of the EU.
> illegal immigration leading to a rise right wing extremism leading to crackdowns on freedom of speech and censorship.
Is it, or is that a narrative? And specifically, is it doing this worse than the USA today?
neves•1h ago
ben_w•55m ago
The mean wealth/income per person in the USA is indeed higher than China.
So what?
oezi•2h ago
vaidhy•2h ago
US was all into destroying Afghanistan and Iraq. They had no intention of being there long term.
lostlogin•1h ago
Can’t it be both? It’s hard to argue they aren’t trying to destroy it. It has been attempted in the past during the Holodomor.
https://en.m.wikipedia.org/wiki/Holodomor
vkou•1h ago
Russia's end goal here is a cultural genocide.
duxup•1h ago
watwut•58m ago
AnimalMuppet•1h ago
notahacker•1h ago
Alupis•1h ago
People love to cry foul when the US flexes it's might... then cry foul when the US takes a back seat... literally cry foul no matter what the US does.
If Ukraine is so important to the world order, why has Europe (you know, Ukraine's actual neighbors) not stepped up with their full military power? Why is Europe not threatening troops, missiles, aircraft, tanks, etc... even nuclear obliteration if Putin doesn't yield? Why is it the US has to swoop in, from half a world away, and save the day (again, and again, and again...)?
The US is not currently willing to send our citizens to die in Ukraine. Maybe Europeans should?
alfiedotwtf•51m ago
The US is currently not wanting Ukraine to win for a single reason - it’s personal to Trump. So much has happened that we’ve collectively forgotten that it was Zelensky said “No” to Trump on the phone when wanting to find any dirt on Joe Biden helping Hunter in business deals.
ModernMech•33m ago
It certainly will when Putin moves on to invading Poland or Finland. The whole point of holding the line at Ukraine is because everyone believes Putin won’t stop there.
csomar•1h ago
If anything, it shows the opposite of what you are saying.
fooker•2h ago
Are you saying there’s something different this time ?
duxup•2h ago
exasperaited•1h ago
But consider who in the world really loves the British. You don't need much time to make a list. Or even a paper and pen.
The main difference between the British Empire and the American Empire is that the American Empire is being led by a man who believes tariffs are a tax on foreign countries and retail prices can be cut by more than 100% and remain positive.
ben_w•59m ago
I've missed this story. Can you elaborate?
exasperaited•2h ago
The longer Trump creates a legal black hole carve-out for Tiktok, the less anyone will want to buy it. Because he is and this action is transparently corrupt, and it taints the buyer.
And that is true of the participants of any of these forced transfers; they paint targets on their back for future manipulation by the Trump executive. (Which increasingly feels like it should be described as a regime)
Matticus_Rex•2h ago
xyst•1h ago
olalonde•1h ago
[0] https://www.youtube.com/watch?v=zv5SiQpG6sg
[1] https://www.youtube.com/watch?v=gFMyB8WMuDU
coreyh14444•1h ago
duxup•1h ago
saalweachter•1h ago
davidw•1h ago
quesera•1h ago
saalweachter•1h ago
repeekad•1h ago
neves•1h ago
davidw•1h ago
xnx•1h ago
slt2021•1h ago
The surest sign of it will be the DJT running for the 3rd term
sdsd•1h ago
slt2021•49m ago
araes•1h ago
> investing a further $400 billion in the US alongside buying a stake in Intel seems improbable from a purely financial standpoint
TSMC's entire assets are ~$200,000,000,000 [1] (cash, inventory, accounts receivable, land, buildings and equipment.)
Buying 49% of Intel ... maybe. Intel's outstanding Market Cap is current ~$88,600,000,000. (4,377,000,000 outstanding shares [2] @ 20.26 8/5/25 midday price [3]). Double TSMC's entire assets is a bit extreme.
Notably, Intel's valuation also seems kind of nonsense. They made $13B in revenue last quarter. 2024 yearly was $53B ... on a market cap of $88B? Intel's been a mess lately, yet their valuation's also kind of a mess. If they ever stop bleeding money on operating profit and net income they won't look that bad.
[1] https://en.wikipedia.org/wiki/TSMC
[2] https://www.nasdaq.com/market-activity/stocks/intc/instituti...
[3] https://www.nasdaq.com/market-activity/stocks/intc
csomar•1h ago
j_walter•1h ago
achempion•51m ago
bathtub365•48m ago
seanmcdirmid•38m ago
newsclues•1h ago
duxup•1h ago
newsclues•1h ago
It happened before, and perhaps even worse (more competent people were corrupt).
Now, people are just making it public.
duxup•50m ago
lazyeye•1h ago
duxup•58m ago
I don't think becoming China would be a success.
rchaud•52m ago
ModernMech•37m ago
seanmcdirmid•38m ago