Apple and Samsung are not going to buy Intel. Please be serious.

Listen, I perfectly get it. Intel has not had a bully 2nd half of 2024.

It has had to laic disconnected complete 100,000 group successful cost-saving measures successful caller months. Its Arrow Lake processors, which I personally reviewed and recovered alternatively meh, are alternatively underwhelming arsenic acold arsenic capacity goes (at slightest successful nan consciousness that they didn't connection immoderate existent gen-on-gen capacity betterment complete Intel Raptor Lake Refresh).

On nan data-center side, meanwhile, Intel is getting its timepiece cleaned by Nvidia successful position of producing AI data-center chips, thing Intel hasn't done successful a dedicated consciousness previously, truthful everyone is buying Nvidia Taiwan-produced TSMC silicon for its latest AI processors that are doing nan activity that 5 aliases 10 Intel Xeon processors utilized to do.

So group successful nan financial press, and progressively successful nan tech press, are speculating that Intel mightiness beryllium a takeover target for a rival for illustration Apple, Qualcomm, aliases Samsung, and group are taking these reports seriously.

All I person to opportunity is anyone who takes these reports earnestly doesn't understand nan geopolitical conditions of nan semiconductor industry, each of which constituent to Intel remaining an independent institution producing chips successful nan US.

Intel's position successful nan market

As I said, Intel's position successful nan marketplace isn't awesome correct now, but it's not catastrophic. It's still a very successful institution that produces awesome products. Even nan astir caller Intel Core Ultra processors are only a disappointment successful that they aren't amended than erstwhile Intel products, but they are amended (in position of performance) than arch-rival AMD's Ryzen 9000-series chips.

Ultimately, we are not going to spot 15-20% gains gen-on-gen pinch general-use processors anymore. Moore's Law is simply a thing, and TSMC's 3nm chips person astir arsenic mini a transistor are you're going to beryllium capable to nutrient successful silicon.

Any smaller and nan existent watercourse of electrons that make a processor usability is going to physically warp nan dozens of atoms that dress up a fixed transistor successful nan first place, starring to errors, voltage leaks, and different issues that will put nan effective lifespan of sub-3nm processors successful position of months alternatively than years.

Intel, meanwhile, isn't moreover astatine 3nm and it's still producing nan champion processors connected nan planet, truthful Intel's foundries person overmuch much room to amended than TSMC's do. As such, Intel's rivals, who usage TSMC for really fabricating their chips, will yet person obscurity other to move to for improved capacity different than Intel. Intel mightiness beryllium connected nan ropes now, but it has nan stamina to bounce back, truthful to speak, successful a measurement that TSMC simply cannot.

America first

What does Intel mean for nan US system and military?

TSMC has precisely 1 semiconductor foundry successful nan US, successful Arizona. It won't commencement producing chips until adjacent year, and moreover that will beryllium a mini information of nan company's full output, which is different produced retired of Taiwan.

In lawsuit you someway haven't heard, Taiwan is considered a renegade state of mainland China, according to nan Chinese government. Its independency from mainland norm is simply a hotly contested geopolitical issue, but moreover nan US authorities ostensibly agrees pinch nan alleged 'One China' policy, wherein Taiwan and nan mainland will yet beryllium reunified astatine immoderate point.

Taiwan produces nan immense mostly of semiconductors successful nan world, and nan US keeps banning American companies from exporting chips to China. Should Taiwan ever go portion of mainland China successful nan adjacent term, nevertheless that happens, really quickly do you deliberation China will limit nan export of chips from Taiwan successful response? Yeah, that's a problem for nan US.

Meanwhile, Samsung, nan only different institution pinch existent semiconductor foundries that tin compete pinch Intel, is based successful South Korea, which is still technically astatine warfare pinch North Korea, a belligerent state pinch atomic weapons and a very unstable activity structure. Needless to say, this is besides not a reliable region to guidelines nan full US system astir successful an progressively volatile world.

That leaves Intel, whose foundries are located successful nan United States itself, arsenic nan only guaranteed reliable root of processors that tin tally nan full US system (and nan US military) successful nan arena of a basking aliases moreover acold conflict pinch China, thing that is not retired of nan mobility successful nan 21st century.

As such, Intel is ne'er going to beryllium bought retired by a overseas company. It's a basal nationalist information rumor that nary American president aliases Congress will accept. Intel will beryllium afloat nationalized earlier that ever happens.

What astir American companies buying Intel?

So, what astir an American institution buying Intel? That still keeps those chips successful nan US, right?

While that is theoretically imaginable from a nationalist information perspective, Apple, AMD, Nvidia, and Qualcomm each person extended ties to Taiwan and China successful position of manufacturing, truthful you tin slope connected nan truth that nan US authorities is going to make immoderate of those companies weaken, if not break, those ties to China and Taiwan earlier it permits them to return complete nan only home shaper of semiconductors successful nan US.

Having those foundries successful nan hands of immoderate institution pinch a imaginable conflict of liking betwixt nan US and China is going to beryllium an absolute non-starter for nan US government, and nary of those companies are going to want to make nan basal concessions. It's still overmuch cheaper to nutrient products successful Taiwan and China than successful nan US, truthful nan profit inducement is going to measurement against sacrificing ties pinch China conscionable to bargain Intel.

Moreover, that benignant of manufacture consolidation is nan benignant of point that is going to group regulators' hairsbreadth connected fire, moreover successful nan US, and moreover nether a perchance highly business-friendly government. It's conscionable not thing that anyone tin responsibly judge without unthinkable consequence to some nan system and, crucially, nan US military, which needs dependable, domestically produced chips for subject equipment.

Intel's title helps support Intel sharp. It's 1 point to person a Boeing Starliner disappoint astatine nan ISS; it's different point to person Intel's chips neglect erstwhile they're integrated into each of America's missiles, airplanes, and more.

Google, Meta, Amazon, and Cisco will merge into a super-conglomerate earlier Intel merges pinch AMD, Qualcomm, aliases Nvidia. Intel's independency is conscionable excessively captious to nationalist information to bet connected pinch immoderate changes to nan position quo. It conscionable won't happen.

So what will hap then?

First off, extremity looking astatine Intel for illustration immoderate different banal connected nan Nasdaq aliases Dow Jones. It's not.

Raytheon and Lockheed Martin mightiness person bad quarters aliases moreover bad years, but everyone knows they're not going anywhere. They nutrient America's weapons, and truthful each American authorities will ever bargain their products.

Intel itself started disconnected successful a akin situation. It and its predecessor companies that yet merged into nan modern Intel powered nan Apollo program, authorities investigation centers, and different captious infrastructure, but besides America's Minuteman ICBM rocket program. Intel still provides nan chips for modern subject hardware for illustration satellites and section equipment, arsenic good arsenic infirmary equipment, power-plant equipment, water-treatment equipment, and nan like.

As such, successful nan worst-case scenario, nan US authorities will simply springiness Intel nan money and resources it needs to enactment afloat to support those chips coming, which is yet what nan caller CHIPS act was each about. It's what it did successful nan 1960s erstwhile nary businesses would bargain a 10kHz processor for thousands of dollars a pop. The US government, meanwhile, bought each azygous 1 of them it could and recovered uses for them, helping springiness nan fledgling semiconductor manufacture nan captious early superior it needed to thrive.

In modern times, it's highly improbable that Intel will look nan benignant of marketplace unit that it did successful its infancy. But you amended judge that keeping Intel alive, independent, and connected American ungraded is very overmuch successful America's nationalist interest, and it will make judge it stays that way, nary matter nan histrionics of nan financial and tech press.

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