Yes absolutely, and look -- this is not to say that Intel does not have strict guidelines and processes that protect information. Certain things are definitely need to know around here. However, Intel is a business and if they've calculated that the cost of doing business is worth the risk they will take the risk. The government has put restrictions on semiconductors doing certain types of manufacturing in China but I wonder if these regulations are sufficient enough.

For instance, you can only manufacture CPUs in certain countries if the process is a couple of generations old. As Moore's law slow down the improvement from generation to generation will become less, are our current regulations sufficient enough to address this coming future? That's my concern.

Dont forget it's often as simple as executives bonuses could be easily gained by offshoring (motive), everyone was doing (opportunity), and they did it purely for selfish gain in short term. What happens in long term is next executives' problem, something to hand off to PR folks, and so on.

Happens all the time.

How exactly can one calculate such risk? At best somebody put an Exel file with a model that was wrong but that looked impressive in a presentation. But I doubt that even that was done. Somebody just put vague words that everybody was doing that.

There are things that one should not do no matter how tempting it looks. Rusdian roulette can be very attractive as 5 out 6 persons who tried claimed that it was a harmless.

Your whole premise is that China can't do it on their own, which is proved false by the supercomputer chip ban. Now Intel not only lost their market, China actually gained the capability and revenue to support future R&D. Your leaders at Intel appear to know more about business than you do: that it is higher risk over the long term to lose market share, because that gives your competitors revenue to support R&D and opportunities to work with and leverage a customer base to develop a better product. China has no problem making a CPU on their own. They just can't make a commercially competitive CPU, yet.

I've read through your argument multiple times and it still doesn't make sense to me.

> Your leaders at Intel appear to know more about business than you do: that it is higher risk over the long term to lose market share, because that gives your competitors revenue to support R&D and opportunities to work with and leverage a customer base to develop a better product.

Why would Intel be losing market share by not manufacturing chips in China? They may still manufacture the same number of chips but with less profit.

> China has no problem making a CPU on their own. They just can't make a commercially competitive CPU, yet.

Pretty sure parent comments meant processor fab tech in addition to processor tech. That is, tech that makes it possible to manufacture a competitive CPU at competitive costs.

Fabs are so fabulously expensive nowadays that you need serious volume to make them viable, and the volume today comes from mobile phones, IoT and telecoms equipment.

That's why TSMC and Samsung are spanking Intel in fab technology, which was originally Intel's competitive advantage, because Intel dropped the ball on ARM architecture chips due to its inwards-looking obsession with profitable x86. Intel is now boxed into the same low-volume corner as, say IBM PowerPC and ultimately condemned to irrelevance.

The last thing you want is for the Chinese to start investing in their own fabs and have a captive source of demand for those fabs' output, e.g. x86/x64 chips licensed from AMD. Quite frankly, they're going to steal the technology from TSMC and Samsung, not a has-been like Intel that's been incapable of moving to 10nm.

I'd argue a company like Huawei is probably able to make that kind of fab investment (they also design their own ARM chips), and they've shown in the past they are willing to take the long view by out-investing in R&D their Western competitors managed by the typical short-termist bean counter MBAs. That's why Huawei's CFO (and daughter of the founder) was arrested in Canada, to pressure them not to cooperate with the Chinese government's "Made in China 2025" plan to wean itself off dependence on US-controlled microelectronics. The fact John Bolton admitted he was aware of the move shows it was made on geopolitical grounds.

As I said earlier it is not just about profit at the margin to put a plant in China, it is about showing good faith with the government. Intel's technology lead is relative. It faces competitors like Loongson (MIPS), ARM licensees, AMD licensee and even Alpha licensees. It can't afford to take an antagonistic stance against a very large customer as any lost sales would go to supporting a competitor, and more importantly give the competition a customer base to sustain a positive feedback cycle of product improvements.

You say Intel decided the risk is worth the reward. Are you suggesting that the trade-off they chose is not the right choice for the US as a country? Why? Wouldn't Intel be the one hurt the most by any IP theft?

I think it's not unusual for companies to be forced to accept such risks if their competitors have already done so and that's enabling the competitors to win.

Governments can intervene to keep the playing field level, while protecting the national interests.

If it's true that the US has a dominant position in this space, then it's true that the US government has an opportunity to prevent the US companies from shifting manufacturing to where it's likely to result in IP theft in the process of competing with eachother in the manufacturing costs deparment.

If all the companies in the space are forced to ignore the cheaper manufacturing option, that self-destructive avenue of competition is off the table on equal terms. However there's still the threat of foreign competition undercutting on manufacturing, if they catch up in the IP department (which IP theft certainly accelerates).

This makes sense... So IIUC, it's not clear whether government restrictions are a net positive or negative for the US economy: it helps against one source of IP theft, but hurts in the sense of lower global competitiveness due to higher manufacturing costs.

A very difficult trade-off I guess.

IANAL but I believe the US government considers access to superior Silicon a matter of national security and regulates it as such.

It made a crucial difference in the 1980s but now? Who cares if your CPU is a couple of generations old?

It's more expensive to manufacture the same amount of compute power using older processes. That makes old silicon not competitive. From the viewpoint of the consumer, indeed, price per compute power is relatively constant, but from the viewpoint of a silicon manufacturer, newer processes are cheaper per compute power.

This doesn’t answer the parent point. Compute is more expensive with older tech, so what? They’ll just pay more. Consider North Korea. Their ICBM technology is pretty bad compared to the state of an art, however it is still great security concern.

They won't sell, and not enough to fund competing research. I'm pretty sure the security concern isn't directly related to defense, but to the security of US industries and economy.

That is assuming that a manager at Intel cares more today about another company stealing his companies technology and using it in future as opposed to getting the lowest cost for a new plant today. If the answer isn't obvious, here is a hint: which thing do you think the manager gets a bonus for?

You could say the same about outsourcing in general. It was a giant trend that everyone hopped on, and now it's affecting the entire US economy and transferring know-how to locals in other countries that are now starting their own competitors with government backing. The markets and businesses can be very short-sided.

The CEO of Intel is 58 years old. What does he care if China steals all of Intel's IP? He'll be retired by then.

Not knowing anything about the CEO of Intel, there are certainly many other driving motives for folks besides money and retirement. There's legacy, loyalty to family, country, environmentalism, pride, general ethics, etc. Certainly some business managers are driven by pure greed, but you'd certainly have to make a case more than point out someone's age to indicate that.

That's the wonder of the stocks insane liquidity. People just want the maximum possible return this quarter, so they can sell it and buy some other stock next quarter. Who cares how long the company survives?

And the best part is, if you force all the companies to act this way, and get some odd government protection for the large ones, the companies won't even go out of business. It's just society that gets poorer.

GP observes that Intel is behaving in a way that indicates it does not value future cash flows. I reply with one hypothesis for why Intel is discounting future earnings. (Very high discount rate on future cash flows, perhaps) You respond with reasons its discount rate could be lower.

Yes, I agree it would be nice for the United States if Intel's discount rate was lower, but where's the evidence? Does opening a chip packaging plant in China show "legacy, loyalty to family, country, environmentalism, pride, general ethics, etc"?

Although I think it's unfair to call out the CEO for his age, the notion of people behaving according to the laws of the system they live in, despite trying (and occasionally succeeding) in raising themselves above them, was noticed as far back as Ricardo and and only really put into perspective by Marx in the 1867 preface to the German edition of Capital:

>To prevent possible misunderstanding, a word. I paint the capitalist and the landlord in no sense couleur de rose [i.e., seen through rose-tinted glasses]. But here individuals are dealt with only in so far as they are the personifications of economic categories, embodiments of particular class-relations and class-interests. My standpoint, from which the evolution of the economic formation of society is viewed as a process of natural history, can less than any other make the individual responsible for relations whose creature he socially remains, however much he may subjectively raise himself above them.

The preface ends on a wonderful little note that hopefully everyone can agree on:

>Every opinion based on scientific criticism I welcome. As to prejudices of so-called public opinion, to which I have never made concessions, now as aforetime the maxim of the great Florentine is mine: “Segui il tuo corso, e lascia dir le genti.” [Follow your own course, and let people talk – paraphrased from Dante] Karl Marx, London. July 25, 1867.

I need to read Marx.

He is famously (or infamously) rhetorical in most of his work, but even his harshest critics (at least, those in academic circles) praise the fecundity and depth of his work. This possibility for interpretation was criticized by Pareto ("words are like bats - you are never sure if you are looking at a mouse or a bird" OWTTA) but has also provided the ability to use Marx's critical analysis on himself, and not only in the most narrow philological senses as one might imagine philosophers and political economists quibble over newly discovered German manuscripts.

One could spend their whole life studying Marx and not get through half of the work in Marxology (and two lifetimes if we include mathematical Marxism), value theory and classical economics - but to me that makes it all the better.

You seem well read in him, and philosophy/philology also. Can you recommend works in each you found worthwhile?

Most basically I'd recommend Marx, but maybe not without some guide to what it is exactly you're reading, why things are peculiar and the tradition which Marx inherited, which as his collaborator Engels admitted, was moribund even by the time Marx published Capital[0]. Although you can't avoid overlaying some interpretation, I'd recommend reading Capital alongside something like Johan Fornas' "Capitalism" (Routledge, 2014) who tries to mention various interpretative traditions, and for something more opinionated, Michael Heinrich's "An Introduction to the Three Volumes of Karl Marx's Capital". Value is a big topic in Marx, and while neoclassical economics dismisses it (what I believe to be out of hand) I.I. Rubin, who was persecuted by the USSR under false accusations, wrote a fantastic set of essays on his theory of value, named just as a collection of I.I. Rubin's essays.

Were you asking about philosophy in general? In that case, I admit I'm not very well read at all, even on Marx's Hegelian background - but there is a rather famous 4chan /lit/ board guide to philosophy from the start, though in my experience, it need not be read sequentially.

By philology I was referring to the study of the interpretation of Marx specifically - in my opinion it has produced some fascinating results (see Heinrich above, and importantly The Mismeasure of Wealth, which is a a set of essays by contemporary Marxian philosopher Patrick Murray[0]).

Also of interest is the discussion on Marx's more qualitative points besides his theory of value, specifically his theory of history, alienation, technology etc. for which Gerry Cohen and Sean Sayers have plenty, and Peter Hudis[2] claims from a philological point of view, it is easy to see how the USSR's style of socialism would probably come under fire from Marx himself.

On the whole, I'd just like to conclude with the fact that Marxism is very much not a unified school of thought, and in my modest and relatively uninformed opinion, it has only increased fracturing and has been marred by unfortunate internal hostilities after the 70s in which various philosophers tried to salvage what remained, reinvent, reinterpret or deny the grounds on which famous economists like Paul Samuelson and Piero Sraffa dismissed him. Marxism is so fractured that specifically regional schools have emerged, for instance the Uno School in Japan, AM in the Anglo-Saxon world, the Frankfurt School in 20th c. America, Neue Marx-Lektur in the German world etc.

Despite what it may seem, you asked for what I found worthwhile, but I've replied by citing almost all the authors who I've read at least one work of - I've read so little that I literally can't select what's worthwhile and what's not. This means I'm providing a limited picture, so take what I've said with a Capital-sized grain of salt!

[0] The "dialectical presentation" has come under fire from some Marxists as being insufficiently rigorous, outdated etc. - this is the Analytical Marxist school, which Roberto Veneziani (who you might also refer to on the matter of mathematical Marxism, along with Kliman's easy (but thick) "Reclaiming Marx's Capital") has written about: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2125671

[1] "Probing Marx's dialectical accounts of the commodity, value, money, surplus value, wage labour and capital, The Mismeasure of Wealth establishes Marx's singular relevance for critical social theory today."

[2] Peter Hudis - Marx's concept of the Alternative to Capitalism

Setting aside the questionable question of the CEO's motivations (they would happen in a young person as well, who would probably be in another company by then), the design of corporate governance is supposed to stop CEOs from making exactly that kind of terrible, self-interested decision. There is a board for a reason.

Likely he has Intel stocks. His children can have some too. Isn't it in his interest to preserve the value of Intel then?

Does intel even have a CEO now?