r/hardware • u/zuperlo • 1d ago
Discussion What will the U.S. government's shared ownership of Intel mean in practical terms?
How will, if at all, Intel's operations, activity and function change in the short term and long term with the U.S. government now owning 10% of the company?
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u/grumble11 1d ago
Realistically, the US government was panicking about intel’s decision to suspend the fab buildout it had planned in Ohio. Ohio is a swing state and that plant would have resulted in many thousands of excellent jobs in an area that needed them. By investing in Intel, they likely can force them to continue building out Ohio.
Now Ohio should be suspended because it relies on having external customers, and Intel hasn’t gotten any and might never get any.
In the short term this is good for Intel. They have implicit government backing. Longer term this may be bad, since the government will make Intel do stuff that is not good for their business (like building out facilities for political aims and so on).
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u/hollow_bridge 1d ago
This won't affect intels decision to suspend the fab buildout, actually it makes it more likely. As the Gov shares have to vote following the intel board.
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u/Z3r0sama2017 1h ago
That's the price Intel had to pay to guarantee it will still exist in a few years time.
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u/ImSpartacus811 1d ago
It's symbolic.
The US is signaling that it [literally] has stake in Intel's success.
This signal is important to the markets. It's important to allied nations. It's important to rival nations.
One can speculate that Intel will gain access to future deals for cheap US-backed credit to stay afloat and expand R&D. But it's also easy to speculate that Intel might lose some autonomy.
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u/DonTaddeo 1d ago
Doesn't this dilute the equity other investors have in the company?
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u/hollow_bridge 1d ago
yes, and more than that it dilutes the voting power, as the gov shares are all required to vote with the board.
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u/MarsupialFrequent685 1d ago
I think the other investors is more confident that the govt is backing intel. But private investors may not like doing business with the govt..
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u/Deathnote_Blockchain 1d ago
It's pretty great when the entities in charge of regulating a company have financial interests in it!
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u/Pure_Inspection697 1d ago
No different than TSMC, SMIC and Samsung. US was the only outlier still trying to pretend like this wasn't political.
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u/Deathnote_Blockchain 1d ago
So where those companies totally public for years before effectively being shaken down by their government for a sizeable percentage?
Did the authoritarians who demanded they hand over the shares come from a political movement which spent at least the last 70 years decrying government interference in markets?
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u/DeadlyGlasses 1d ago
How is it the same? Taiwan, China all these country give money to those who are good at it. Intel is not good at the things it do.
Taiwan and China goal by subsidizing critical companies is to make them better. US primary goal of subsidizing companies is to make sure billionaire not lose more money. And the cheapest and easiest ways to do achieve that goal is not invest in the future but bring down competetors.
So yes if you are Intel bag holder it is good for you but if you are US resident that means US will now do anything in its power to make the competition worse in order to bring competition to Intel level.
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u/Pure_Inspection697 21h ago
Taiwan and China subsidized their companies from the ground floor before they ever produced a single wafer.
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u/DeadlyGlasses 21h ago
Yes. They have very fixed goal of making the leading edge node. What exactly is US goal here? Making as much profit as quickly as possible. And how do you make as much profit as possible for your company as a country?
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u/Pure_Inspection697 20h ago
Where are you even getting this nonsense? Intel is losing money like crazy and US investment isn't going to magically make it profitable.
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u/DeadlyGlasses 20h ago
Exactly! Intel is losing. Why Intel is losing ever wonder? Cause they are terrible at the job.
By government intervention they will reward Intel by them being terrible at it. Taiwan and China reward companies who are good at it. US government intervention will not do anything good.
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u/Netblock 1d ago
The ethical concern doesn't lie in the fact of state ownership/control by itself; it can go both ways, for example public infrastructure and welfare. The ethical concern lies in how much power the people/proletariat have over their government; such a timeless problem.
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u/arc-minute 1d ago
And said entities are of dubious moral/legal character. Does this actually make Intel Foundry more appealing to anyone?
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u/Adventurous_Tea_2198 1d ago
It means intel will gradually become less competitive over time as it can always rely on a bailout, eventually joining the ranks of GM, Boeing, etc.
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u/hollow_bridge 1d ago
It's not a bailout, they received no new money, the money is from the already applied grants.
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u/Mental-At-ThirtyFive 21h ago
I did not realize GM is getting bailed out - did not see any news about it in 2025 or the last year either.
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u/Marksta 17h ago
Intel has become less competitive over time for the last 10+ years, they're already at the Boeing level. Instead of a new generation of planes falling out of skies, they had a generation of CPUs completely fail. If their products could kill, they'd have a kill count well into the 100 thousands. If they can get worse than an entirely faulty product, it'll be very surprising to see.
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u/Pitiful_Hedgehog6343 1d ago
TSMC and Samsung are heavily subsidized by their respective governments. They even got CHIPS act grants without giving equity. I hope Intel succeeds, they're a national security asset.
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u/Eclipsed830 1d ago
TSMC isn't heavily subsidized by the Taiwanese government. Subsidies in Taiwan typically go to SME, of which TSMC is not.
Most of the benefits Taiwan gets come from local city governments in the form of tax rebates, not from the national government.
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u/Pitiful_Hedgehog6343 1d ago
Taiwan owns a significant portion of TSMC through its National Development Fund and the government's board seat, making the government the largest single shareholder, though the majority of the company is owned by foreign investors. This relationship creates a mutually beneficial and dependent dynamic between the company, which is critical to Taiwan's economy, and the Taiwanese government.
Taiwan's Stake in TSMC
Government as Largest Shareholder:
The Taiwanese government, through the National Development Fund, remains TSMC's largest individual shareholder, holding a 6.38% stake as of August 2024.
Critical to the Economy:
TSMC is Taiwan's largest company and a dominant force in the global semiconductor industry, with its integrated circuit exports representing a significant portion of Taiwan's GDP.
A Strategic Partnership:
The relationship is often described as a "lips and teeth" dynamic, indicating a deep, mutual dependency between the independent company and the government.
Foreign Ownership
Majority Foreign-Owned:
While the Taiwanese government holds a significant stake, the majority of TSMC's shares are owned by foreign investors and institutions.
Market Capitalization:
The company's large market capitalization attracts substantial foreign investment, which has played a key role in its growth.
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u/recaffeinated 1d ago
That I'm unlikely to buy an intel product again.
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u/meshreplacer 1d ago
Well I went Apple silicon because Intel CPUs have fallen behind lol nothing political.
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u/zsaleeba 1d ago
I'm sure the NSA is going to be really happy with this news, if you know what I mean.
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u/DaddaMongo 1d ago
I remember years ago when intel tried putting some sort of tracking / spyware in the chips so definitely buying a US backed chip is a really bad idea for any individual or company in the future.
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u/Dapman02 1d ago
Both AMD and Intel have a Secure Enclave type solution
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u/notam00se 1d ago
The Intel Management Engine, also known as the Intel Manageability Engine, is an autonomous subsystem that has been incorporated in virtually all of Intel's processor chipsets since 2008. It is located in the Platform Controller Hub of modern Intel motherboards. The Intel Management Engine always runs as long as the motherboard is receiving power, even when the computer is turned off.
AMD has similar management engine. Both have had vulnerabilities, but have not been historically concerning. The main intended use is corporate manageability.
But having an authoritarian government take ownership isn't the best look for customers.
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u/DaddaMongo 1d ago
No don't think that's it. Here's an article from 2000 regarding what I mean.
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u/hollow_bridge 1d ago
The Intel Management Engine always runs as long as the motherboard is receiving power, even when the computer is turned off
Electricity when they are powered off? sure...
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u/Dijky 1d ago
ATX power supplies provide standby power to the mainboard when the PC is turned off but still connected to mains power.
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u/hollow_bridge 1d ago
standby is 5v only, Which the cpu doesn't use. it's for turning on the machine basically, but nothing on the cpu is powered or in used with standby power.
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u/shugthedug3 1d ago
You think people are lying about the ME? It has been studied enough to confirm it is active on standby power. That's a basic necessity for some of its functions, the clue is in the word management.
It's also in the chipset, not the CPU.
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u/tmanred 19h ago
Look up what a bmc is. I have a supermicro server motherboard with one for my nas and the bmc is on all the time and I am using a standard Seasonic ATX power supply.
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u/hollow_bridge 19h ago
bmc
most motherboards dont have one though, it's an addon feature.
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u/tmanred 18h ago
It is pretty much standard on any server motherboard. Look at basically anything sold by supermicro or Asrock rack. But the point is that it is always on even when the server itself is off and using a standard atx power supply. It has to be to be able to provide the web interface you can log in to to power on the main server. There is nothing stopping intel management engine from doing the same.
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u/hollow_bridge 11h ago
sure it is normal on server motherboards, but it's not normal on laptop or desktop motherboards so what's the point, IME is not phoning home to provide a back door.
https://old.reddit.com/r/privacy/comments/11i9k7k/intel_management_engine_has_anyone_ever_proved/
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u/GreatSituation886 1d ago
It means I’ll never buy another Intel CPU again.
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u/Pitiful_Hedgehog6343 1d ago
TSMC got 6.6 billion for free, will you not buy AMD, Apple or Nvidia too?
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u/Sasha_bb 1d ago
Do you expect people to be rational or consistent on Reddit? It's all virtue signaling.
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u/imaginary_num6er 1d ago
TSMC volunteered to return the money per their statement to WSJ if it means having the US take a stake in it
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u/hwgod 16h ago
TSMC got 6.6 billion for free
No, they met the criteria for the funding by actually building something. Unlike Intel.
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u/Pitiful_Hedgehog6343 11h ago
Intel has built several huge new fabs in Oregon and Arizona, that are just now nearing completing, and a state of the art packaging plant in New Mexico.
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u/sentientsackofmeat 1d ago
The insane amount of money it costs to fabricate CPUs almost requires some level of government backing. All of the foundry competitors (TSMC, Samsung and SMIC) are backed by their respective governments.
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u/GreatSituation886 1d ago
But I trust those governments to not install backdoors. America, on the other hand...
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u/Kenya151 1d ago
If you really don’t think those devices are also compromised you are living a sheltered life
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u/unapologetic-tur 1d ago
You trust SMIC of all fucking companies to not install back doors? Man, what is up with you people???
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u/hwgod 16h ago
"Backed" how? TSMC doesn't rely on bailouts to fund their fabs. And Intel used to have a ton of money, but they misspent it.
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u/sentientsackofmeat 16h ago
Here is a pretty good overview of tsmc and the Taiwanese government: https://dominotheory.com/tsmc-and-taiwans-government-two-boats-on-the-same-tide/ There were management missteps by intel but basically without intel there is nobody else in the USA doing semiconductor fabrication research. So sure we could let intel die due to past management mistakes but then that would basically make the USA pretty reliant on Taiwan and south Korea for a key industry of the future.
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u/imaginary_num6er 1d ago
Well it could mean a gold-plated Battlemage "Patriot" Edition GPUs or backdoors that flag those critical of those of the current admin with unexpected hardware failures on their system.
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u/Morningst4r 1d ago
I think you're fantasising about things this admin is neither competent enough to nor have enough time to pull off.
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u/giganticwrap 1d ago
People outside of the US will double down on boycotting
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u/Sasha_bb 1d ago
Is this like your wet dream or something?
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u/sir_sri 1d ago
It depends what the government wants to do with their ownership stake.
The government could view this as essentially a hands off investment where it will sell shares at some point in the future but keep hands off the management of the company.
Some of the chips act and this investment are really about strategic goals rather than purely bailing out Intel. Intel still has a both 55 billion dollars in revenue, down from about 75, but all of that 20 gap has basically gone to amd who have gone from 7 to 30. Tsmc has gone from 25 billion in revenue in 2015 to 90 ish billion now (a lot of which is mobile phone chips, Nvidia, and legacy stuff that is critical but boring like car part.)
The problem with strategic investments, say in critical industry or minerals is that you are overpaying or subsidizing something that otherwise would not be a great choice on purely financial grounds. Intel might be forced to keep old factories running longer, or open up its foundries to competitors so that parts can be made in the US rather than somewhere else, even if that means paying an extra 30 or 50% for the chips or wafers themselves (which is not 30 to 50% on the final price of goods). On the other hand commitments to keep the foundry running longer makes them a more attractive supplier to defence, aerospace, automotive. You don't want to find out you need parts for a 10 year old car or plane that can't be made anymore.
This could also be a big help to Intel on cash flow, even though there are other ways to structure such a deal (bonds for example). Going from 75 to 55 billion in revenue is going to hurt, a lot. But to pick up 10 ish billion dollars in cash gives some breathing room, and also the capital to invest more in people, R&D, and factories, ultimately for new products.
Where this can go to shit is the government trying to flex their ownership stake to make strategically relevant but economically bad products. Imagine the government says to make millions of celestial and druid GPUs even if they end up terrible or if they tell Intel to cut off the Taiwan and Israeli offices to focus on the US and lose that talent or the like. Government intervention can be good, or it can be bad. And the government can change their mind on a moments notice.
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u/hollow_bridge 1d ago
The government could view this as essentially a hands off investment
They are required to, the gov shares all vote with the board.
Some of the chips act and this investment are really about strategic goals rather than purely bailing out Intel.
This isn't a bailout at all, Intel received no new funding, the funds that are used for this were already given to intel via the chips act.
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u/OtherOtherDave 4h ago
I’m pretty sure all it really means is that Intel won’t be allowed to close their foundry business anymore. It is very much in the US’s best interest to have the ability to fab reasonably advanced chips domestically so that we can still keep making stuff for the military/national security if China invades Taiwan and gets TSMC.
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u/Nicholas-Steel 17m ago
It obviously means they're gonna sneak in encryption backdoors, obviously /s
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u/apresmoiputas 1d ago
But how is this not extortion?
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u/gumol 1d ago
it's a trade: Intel is getting billions of dollars from the govt in exchange
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u/BrushPsychological74 1d ago
getting billions of dollars from the govt in exchange
From tax payers.
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u/gumol 1d ago edited 1d ago
yep, govt is funded by tax payers.
I don't like govt/tax payers giving multi billion subsidies to businesses, but I think it's even dumber if the govt/tax payers don't get anything in return.
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u/BrushPsychological74 1d ago
I generally agree, but when it comes to global competition, I would rather have it than not.
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u/hollow_bridge 1d ago
No, intel is receiving no new cash, it's the fund from the grants they've already received.
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u/Pure_Inspection697 1d ago
No they don't. The government is buying existing shares. New shares aren't being issued.
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u/meshreplacer 1d ago
No intel is issuing shares at a discount price to current market. Intel has to issue equity in order to get the money. Stock trading on the open market is between non related participants and do not add to the balance sheet as issuing to the US will.
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u/gumol 1d ago
The government is buying existing shares.
aren't those shares owned by Intel?
So if Intel sells 10% of itself in return for billions of dollars, isn't that a trade?
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u/Pure_Inspection697 1d ago
No because 100% of Intel is already sold. The government isn't giving Intel a cent.. they're giving money to other investors like Blackrock, Vanguard and likely your 401k.
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u/gumol 1d ago
do you have a source? Everything I've read says that Intel will get money from the govt.
Also, the shares were sold at a discount to market prices. How does this work? The transaction is also supposedly complete - did 10% of Intel trade in a single day?
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u/Pure_Inspection697 1d ago
Intel is getting the CHIPs Act funding it was already promised. No new monies are going to Intel as a result of this "deal".
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u/heickelrrx 1d ago
Considering TSMC and Samsung also Backed by their government the possibility benefit as follow
Considering Leading edge Semiconductor Fabrication are all Backed by Government, This isn't new, in fact United States are Late for the trend, because this is an industry that extremely expensive and require support to growing