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Intel United States

Intel Required To Keep Control of Foundries Under $7.9 Billion Chips Act Deal 20

Intel must maintain majority control of its foundries as a condition of receiving $7.86 billion in U.S. CHIPS Act funding, according to terms disclosed in a regulatory filing [PDF]. The semiconductor giant will need to keep at least 50.1% ownership if the foundry unit is spun off privately, while no single shareholder can hold more than 35% of shares if it goes public unless Intel remains the largest stakeholder. The restrictions, which also require Intel to remain a customer, come as the company struggles financially and recently restructured its foundry business as an independent unit.

Intel Required To Keep Control of Foundries Under $7.9 Billion Chips Act Deal

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  • by Powercntrl ( 458442 ) on Friday November 29, 2024 @12:47AM (#64978741) Homepage

    Have they tried cutting out the avocado toast and maybe not buying a new iPhone every year? /s

    • by evanh ( 627108 )

      Or just not buying nearly every High-NA EUV lithographer made this year maybe. There's gotta be an explanation for such a move beyond Intel's own self-interest.

    • well (Score:2, Insightful)

      by Anonymous Coward

      They didn't have a lot of choices.

      When Pat came back, his plan was to make manufacturing good again, and to open up manufacturing to other clients. The latter was likely never going to work because Intel is famously dishonest (look at what happened with Qualcomm and Intel's efforts to steal their cellular technology) and because becoming established as a third party chip fab needs a lot of ground work they have never done. Thing is, that meant funneling vast resources into manufacturing and hoping that the

    • Have they fired the cast of Eye Wide Shut yet? There's Oregon in a sling! She takes all the loads. Every hole filled with sweet corporate luvin. How 'bout those jobs? Don't feel sorry, Oregon wanted to hang with the cool kids. She said she'd do anything, anything. And to keep that foundry, we're going to find out how far she will sell her people out. Call back for a good time, okay? Terrific.

  • what about no STOCK BUY BACKS allowed as well?

    • That ship already sailed years ago. Intel only stopped that when revenue dried up.

    • I'll never understand this complaint. Assuming the company didn't buy back stocks the money would be paid out as dividends or used by the company in some way. The second is less likely as if the company thought they had a good way to use it, they would have and there would be less money to return to investors. Presumably you think the dividend payout to investors is good because they'll invest the money in something else or spend it.

      However isn't the same also true of stocks? The stock has to be purchase
      • by Luckyo ( 1726890 ) on Friday November 29, 2024 @09:24AM (#64979193)

        I think I can make devil's argument here.

        The reason people think stock buybacks are bad for tech companies is for fundamental reason that it means that tech company has surplus money and doesn't invest in R&D, distribution, manufacturing, etc. Because tech companies fundamentally live and die by how fast they are in developing new technology and making products based on that new technology. All of this requires large sums of money, and raise value of the company.

        If you're spending money doing buybacks instead of investing into company's future, you're are demonstrating that this money couldn't in fact be used to make company more valuable by investing in its core competencies and resulting in similar or better outcome instead. It's a message that company is so fundamentally inefficient, that trying to play the market is more efficient than trying to invest in it's core competency.

    • by Enigma2175 ( 179646 ) on Friday November 29, 2024 @10:34AM (#64979317) Homepage Journal

      what about no STOCK BUY BACKS allowed as well?

      As a matter of fact they are prohibited from doing stock buybacks for 5 years as a condition of the CHIPS grant. I know you thought you were being snarky but yes, that's actually one of the terms of the deal.

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