So they got all that money from Uncle Sam’s CHIPS Act only to lay off 10,000 employees and make themselves “lean”. Govt funded unemployment.
This sort of thing is increasingly making TSMC a monopoly as a fab. Due to the extreme economies of scale, fabbing looks like something that is hard to do well under the capitalist model. Perhaps a good time for some of the larger nations of the world to start publicly owned fabs (that publish their research instead of hoarding it) instead of ending up with the whole world reliant on one company that will eventually be able to name its price.
After all this time, AMD finally won. They made a hell of a comeback too. GG guys.
Didn’t expect CHIPS to backfire this fast lol.
I thought they would be more tacit about it. This is too obvious and too soon after taking taxpayers’ money. But they probably don’t care anyways. Who is going to stop them or hold them accountable?
Chips Act, Take 1: Hey Intel here’s 8 Billion dollars to make us more chips in the US. Intel: I gotta let 15,000 of you go, there’s just not enough money…
It got us a TSMC fab, soon ish maybe lol
Is this really a backfire? My read is that they’re actually focusing on their core business (plus cutting down marketing). It sounds like the right move, but maybe I’m too optimistic?
The CHIPS plants just started being built a few months ago. This is bad for the employees and short-term investors, but long-term Intel will be fine and the plants will be a net positive to the country.
I don’t think it backfired…I truly don’t believe the Chips act is a jobs act. It is to address manufacturing gaps in semiconductors within the US. The US government wants semiconductor manufacturers to update foundries and gave them money to do so. The jobs that have been added within the industry have been icing on the cake but not the original intent imho.
How long before Nvdia buys them, or at least tries to. Nvidia tried to buy Arm but got stopped by the UK government.
Nvidia wants IP. They do not want to buy foundries. It’s too volatile and dependent on government subsidies while also being well outside their core competencies. If their products don’t sell as a fabless company, they don’t see growth and lose on the manufacturing cost and stop placing orders. If their products don’t sell and their chip fabs run idle, they lose a shitton of money on not just the above but also the cost of maintaining the fabs. Not only is there no guarantee that Nvidia would be able to run the foundries better, it’s actually quite likely they’d run them worse.
Arm is worth 5.3bn USD and employs just over 8000 people. Intel is worth just over 100bn USD and employs 124,000 people.
Nvidia is worth 42bn USD and employs 30,000 people.
That makes Intel over twice as valuable as Nvidia with over four times as many employees.
Don’t understand your “worth” numbers, that’s generally market cap and those numbers don’t line up. The employee counts line up…
100B is… close enough for Intel (though they have fallen to 95B). So $730,769 per employee
ARM is $140B… So $20,000,000 an employee…
nVidia is worth 2.7T… $90,000,000 an employee…
Nvidia is worth 42bn USD and employs 30,000 people.
Nvidia’s has a market cap 30x of Intel’s. So it could issue more stock to raise capital for a buyout. It’s not the company equity but the market cap that it needs to have money to purchase. Even a controlling stake of > 50% would give them defacto control. Of course governments & regulators would probably block it or force Nvidia to divest bits of itself, and that’s probably the greatest protection Intel has against such a scenario.
But if Intel weakens further, it may well be someone else tries to acquire it. I bet a lot of companies would love to snaffle it up. It’s kind of ironic that Intel used to be the big dog in the semiconductor space but even AMD is bigger than it these days and are potentially many others who’d like buy it out. In fact, for all we know Intel might be shedding all these jobs to make it look more attractive to potential buyers.
The thing is that AMD and Nvidia are chip designers not chip makers. While Intel does design and print chips, the reason Intel is so critical (from US perception) is they own the foundries to make chips.
AMD decided years ago to go fabless, as for Nvidia I’m not sure they want to own the fabrication process.
FIFTEEN THOUSAND HOLY SHIT
There’s a dude in wallstreetbets who dumped a $700k inheritance into Intel stocks. lol
Layoffs will make the stock go up. It’s bizarre.
My experiences working for huge corporations have made it clear what an enormous percentage of corporate workers spend all their time on useless busy work, so in theory layoffs can make a corporation more profitable. The problem is that it’s rarely the useless ass-kissers who get laid off.
If the bureaucracy could easily identify the dead weight projects it wouldn’t need the layoffs but that also means it can’t make good choices when doing layoffs.
It’s like chemotherapy.
I just started a corporate job a while ago and they still can’t really tell me what I’ll be doing. My onboarding plan suggests that in month 2-3 I’ll be ready to get into it. Like, dude, wtf?
Just focus on the most important thing: going out drinking with the right superiors.
Ha, yes! I’m also enjoying the second most important thing: the fat paycheck
Yeah, my team has gotten cut and the end result is one management type person per person actually doing anything… They are “managing” teams of one each, effectively…
EDIT: To make it clear, I’m not an Intel guy, just commenting on an ‘Intel-like’ company behavior with respect to being stupid about layoffs.
Dude, what the heck is wrong with people. Wealth is wasted on the stupid.
What’s the problem? They put the money back into circulation. That’s a good thing, no?
The wealthy hoard their gold. They don’t circulate it.
The problem is that it is just poor money management. He could’ve been set for life. Put that into an index or S&P500 and get 10% every year. That’s 70k and he wouldn’t even have to work. If you took that 70k and invested back into the fund, you can double your money in about 7 years, assuming 10% returns.
Yeah I agree. That’s what I would’ve done. You saying that wealth is wasted just made it sound like the money dissapeared somehow. He wasted his chance on financial independence, sure, but that’s not away from the rest of us.
its mainly that our modern culture worships money and things whoever has more of it is inherently better.
So rich people make bad decisions because they think that being rich means they are always right, and that their ideas are special and magical and come from a mystical realm of refined thought only people with stacks of cash possess.
And when they fail, they blame everything except their greed focused short sightedness.
He’s gonna make a ton of money then, because investors love layoffs.
The stock is down 30% so far, so I think you may not understand investors very well haha
Give it time. Next Monday or Tuesday is probably the day to buy.
I had a friend in the '90s who took a $40K inheritance and “invested” it all on $75 Fossil watches, the kind with Popeye and other cartoon characters on them. At least she was able to show them off at parties and get all the guests to go home.
Layoffs usually cause the stock prices to increase because it shows the company is being “lean” and “cutting the fat”.
Yeah, Intel is down 33% over the last two days… didn’t work this time…
Some layoffs can be seen as “improving efficiency”. This deep of cut is “oh shit, things are screwed”.
It has me oddly hopeful. It sounds like they may have finally realized that they can’t ignore their core product/purpose. However, whether it’s too late or if they have the ability to actually execute is still to be seen.
Frankly, no idea. They talked the talk, but it’s vague enough that I wouldn’t be surprised if they cut out some important people and kept a lot of the bogus crap.
Speaking from a company that has seen (less dramatic) rhetoric around similar circumstances, and everyone on the ground who understood nuance would have guessed certain projects to get canned. Then it turns out they treated the money losing projects as the sacred cows and cut the profitable projects to the bone and put them at risk rather than give up the losers.
Capitalist machines of this size blinded by profits seem to be unable to see what’s actually happening or make logical decisions.
Meh, he bought a significant dip, even if it goes lower in the coming months, in a few years he will be way up. It’s not like Intel will go away, they are in a duopoly market.
Intel has been down from around 50 YTD to 30 likely in a few years it will be back to 50 and he will close to double his money
Though he could have probably just put the 700K into S&P 500 and have his retirement taken care of, since he is in his 20s
Yeah but still… could’ve at least waited a day
Holy F, what an idiot nepo baby. Maybe daddy who pays for college works as a VP at intel
Seems like a great time to buy AMD, ARM and QUAL
Only if you have conviction. Buying tech in the face of recession fears is one thing, but buying tech that supplies hardware to tech is another. It’ll probably sound like a whip cracking if the AI frenzy ever collapses hard
ARM and Qualcomm aren’t really involved with AI, and AI only makes up 15-20% of AMD’s revenue. Nvidia the one to watch out for, an entire 85% of their revenue is just AI and Mellanox. The Nvidia pump has been insane.
Nvidia’s AI gambit is at least diversified to different kinds of AI. Even if (or probably when) LLM AI taps out, Nvidia will likely also be behind the AI tech that takes its place.
I honestly don’t think investors can tell the difference between LLMs+SD and more useful neural networks like audio and video filtering tools. All the money is in LLMs, anyways, I don’t think anybody is buying $1B of datacenter CPUs for the more useful kinds of AI.
The elephant in the room is the semiconductor ETF trade. People are actively trading ETFs more than actual tickers (SOXL is routinely one of the highest volume tickers day in and day out, and it’s been like this for a couple years now). Used to be that NVDA and AMD correlated with crypto because people would flip them on that basis, but not really the case anymore due to all that but I digress - if NVDA tanks, it’s really overweight in all these ETFs, ETFs tank, managers dump every holding in the ETF, and a bunch of non-AI semi stocks will wind up getting walloped about as hard
That’s true, Nvidia’s fall will probably crash the whole market. SOXL tickers don’t trade in unison though, see how much Intel fell in the premarket without affecting other stocks. Of course, Intel is a tenth of the size of Nvidia.
Yeah, the tail could definitely wag the dog. NVDA is now in the top 3 holdings of both SPY and QQQ, so if something like 2 Metas or 1 Microsoft started paring back and skipped on a product cycle, Nvidia’s forward metrics would suddenly be garbage, and between those couple companies, suddenly >15% of market is tanking and dragging entire sectors along for a wild ride
I wonder how many of the over 1000 VPs will get canned. You read that right. I worked there at the beginning of my career. I know a lot of people who are now VPs. Only one of them was actually any good. One guy couldn’t even manage his own staff meetings when he was a first line manager. Nice guy, not dumb or anything, but not brilliant, and a terrible organizer.
Ah yes, the ol’ “promoted to the level of their incompetence”. SOP. Or SNAFU, take your pick.
I hope this never happens to me but based on the Peter Principle I won’t know when it happens.
Oh shit maybe it’s already happened…
over 1000 VPs
I used to work for Comcast and it was astonishing how many vice presidents there were. It might be the most meaningless corporate title ever. Even if they had real work to do they never had time to do it - VPs there turned over faster than beignets at Cafe du Monde.
Publicly traded companies are a curse on humanity.
All the idiot Americans cheering about scapegoating single mothers as welfare queens since the 80s, never an utterance by anyone with power of all the DO NOTHING private investors that drop their chips from their last trip to the exploitation casino and demand all the profit for no labor whatsoever.
“Fuck you, I’m an owner, pay me.”
Prior to the Jack Welch Ronald Reagan betrayal, the model was correcly “customers first, employees second, investors third.”
Everything falls apart when you give every spare penny to the people who A) dont DO anything to make the money they demand and B) demand the companies they own sabotage their missions and futures to goose net profit for the current quarter so they can profit and walk away having severely damaged those company’s ability to do what they existed for, only to demand it of other companies.
maybe the root-cause is less the publicly-traded part but rather the total lack of any consequences?
but yes i totally agree, any company publicly traded will get a payed-for-CEO after a while and latest at that point is where no problems are resolved any more, but instead are IMHO always created on purpose.
Problem with publicly traded is that there is no personal risk past the price you bought the stocks for. You paid $ 1,000 for some stocks of “evil chemical corp”? Now your financial interest, and thats the only measureable one, would want them to pollute for a damage of $ 10,000 respective to the stock value if that increases your stock price to $ 2,000, as long as the risk of them having to pay for cleaning it up is smaller than 50%. Problem is the same holds true for a damage of $ 100,000 relative to your stock. Or any arbitrarily large amount. Your share in the damage caused could be in the billions, but worst thing the company goes bankrupt and you loose your stocks buying price.
The only alternative would be holding shareholders responsible with their own money, if a company is forced to pay up for damages they caused, going past its bankruptcy.
like i said:
maybe the root-cause is […] the total lack of any consequences
but you used much more words ;-)
“publicly traded” does not imply that consequences would be impossible.
i see the opposite is true.
one could make that “public trade” also “very” public as in ownerships could only be changed together with a public note of who that new owner of that share is in person and only like not allow ownership changes more than twice a week per person, making investment more profitable than parasitic high performance trade. also the current lack of consequences could be improved by making the shareholders personally responsible for everything that the company does, including going to jail when the ceo left the country to not go there.
that could include making those responsible who owned that company at the time of its crime, making trust in the company way more important than that they can cause damage to society in macroscope just to profit in microscopical bits.
this way the shareholders would have a at least one trigger to actually want to look into who that bullshittalker is they want to let into such a position of “their property”
society should take care who they let do things with “their property” too.
I work in the industry and my understanding of the chips act is certain goals must be met in order to receive money. Something like in order to get this 50 million, you must buy 100 million of new equipment and facilities improvement. In order to get this 25 million you must have 50 million worth of new jobs. These requirements were also spread out over years so you couldn’t artificially inflate your work force or sell off equipment.
Not saying Intel doesn’t suck, but I doubt they are getting chips act money now. Or they will have to have a big turn around in the next few years to do so. They certainly aren’t getting a free 8 billion.
These layoffs will only be for a quarter or two. Just enough for the c-levels to unlock their full bonuses.
And create a glut in their labour market niche, which will take many years before the wages recover to what they were. In the current 20 year permanent labour shortage scenario, this is the way to prevent wages from increasing. Sure these demand shocks will create issues by they’re making the bet the lower overall expenses for wages will make it all worth it. This is them leveraging the imbalance of power been employer and employee
If only there were some tried and tested method for the working class to join together and create a power block equal to the company in order to negotiate better pay and conditions and avoid these outrageous tactics. Pity
Exactly! And then the Government can declare you an essential service and take away all your bargaining power!
Oh wait…
More like oh no, here I go molotoving again.
I hope it will never hit that point where its the only way forward.
You know they pocket those subsidies when this happens.
Idk about other subsidies but they’re probably not getting any CHIPS Act funds with this sort of behavior.
They only made 50 billion dollars of profit last year. Won’t anybody think of the shareholders
Right to the pockets of the least useful in the company - the executives.
And here’s where I say - what does an executive actually do? And someone will inevitably say something asinine about “risk” and “game changing decisions” and “meeting with investors.”
It’s always the boot lickers saying they. CEO used to be THE guy in charge. It used to be someone who knew the company and worked their way up. McDonnell Douglas/Boeing used to have engineers in charge. Same with GE. Then Jack Welch came along and destroyed that entire ideology.
He was the one that opened the door to late stage capitalism, at least in the USA. It’s hilarious how these companies piece meal themselves off acting like they did something for short term gain. Meanwhile, the Japanese, Chinese, and European companies are happy to buy all this knowledge as they are still playing the long game rather than the MBA clown show.
what does an executive actually do?
According to conservatives, they trickle all over the rest of us. Isn’t that nice of them?
I’m still waiting - mouth wide open, head and hands towards heaven (where it comes from), for the trickle of capitalism to run down my face and enter my mouth.
If you watch these companies they all want to be tech giants when they have no reason to do so. They hire tech execs from the giants thinking they’ll make some great business hybrid withithe help of the tech execs,but you know what? Sometimes a brick is just a brick.
Two things happen, the tech execs lead them on a wild goose chase since they have no idea how to function in a different industry and people get fired, or the CEO is scared and ignores the suggestions to follow the same thing every other company does and people get fired
And here’s where I say - what does an executive actually do?
I just see them as a figure head for the people really in charge. We are now focused on dumb ass CEO decisions or announcements instead of the board voting to ship jobs overseas or something else terrible.
I’d rather they try and put a random janitor in the CEO seat for a year and see what happens.
Couldn’t be any worse than the current shit stain.
The risk bit is self-evidently bullshit. Executives are the last to suffer when things go wrong. They can tank the whole company through greed and incompetence, and still collect their salaries of millions plus even bigger bonuses, before walking into a similar position somewhere else. It’s the employees that shoulder the risk.
I’ll have you know they deserve that money for doing a job no one else wants! Talking to other executives! /s
That’s…wait. That’s actually a decent point. Imagine being around the scummiest, fakest people in the world 24/7. I couldn’t deal with it.
For a couple hundred million a year i think i could deal with it. For like, one year, and then retire.
While i dont like intel, I hope they wont sack GPU division.
They won’t. That’s their springboard into that multi trillion dollar AI market everyone keeps talking about
unless some MBA decides that it’s better to sell single purpose expensive ai boards without video output
At this point I’m starting to think that if you want to subsidize semiconductor manufacturing in the US the Global Foundries might be a better investment. At least they’ve already hit rock bottom.
they fired the guy that single handedly managed meshcommander https://github.com/Ylianst/MeshCommander
it was a tool to remotely control intel vpro machines, intel’s own tool is not as good as what the old ex-employee did in his free time
That’s not surprising if you know how software products nowadays are planned and built in bigger companies.
It’s harder to do it with 50 people than with 5.
There’s no corporate death penalty, but there is corporate death from alcoholism, coke overdose and syphilis.
I mean, you do a TRAFU and instead of firing those logically responsible for it you fire your actual troops.
This basically means they failed to find scapegoats inside the company who wouldn’t be management themselves.
Wow.
