Stratechery U.S. Intel
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Aug 26, 2025 Dive into the U.S. government's equity stake in Intel and the intense debate over its impact on American industrial policy. Explore Intel's struggles in the semiconductor race against fierce competitors like NVIDIA and AMD. Uncover the credibility issues and capital challenges Intel faces, especially in comparison to TSMC. Finally, examine the complex tension between national security and market viability driving Intel's commitment to domestic manufacturing.
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Geography Creates Strategic Chip Vulnerability
- Taiwan and South Korea host the most advanced foundries and are geographically close to China, while the U.S. is across the Pacific.
- That proximity makes access to cutting-edge chips a strategic vulnerability for U.S. national security.
AI Raises The Stakes For Chip Access
- AI's progress increases the urgency of secure chip supply because AI depends on the most advanced nodes.
- Cutting China off from chips could make conflict incentives worse, so timing matters for deterrence.
Intel's Trouble Began With Missed Mobile Volume
- Intel's decline traces to choices made years ago, like missing mobile, which reduced volume needed to justify cutting-edge fabs.
- The surge in fab costs means volume and external customers are now essential for economic viability.