And, in the event of a US/German war, that plant is and will remain German, not American.
I think there's an excellent case for distinguishing that from companies from China, where non-Chinese citizens have a great risk of confiscation of their assets by investing, Chinese companies are subject to a lot of other rules even when operating outside China, etc.
Unless you think Intel will refuse to do business with a European company vs a US one.
Of course it matters. The profit goes in the direction of headquarters, tax is paid in the country of headquarters, and the government of the country of headquarters has much bigger influence to the company.
Tax havens have something to say about that.
The French semi giant, ST, is financially incorporated in the Netherlands (STMicroelectronics N.V.), as is the French giant Airbus (Airbus Group N.V.).
There seems to be a pattern here. It's almost as if companies don't want to pay taxes, regardless if it's their home country.
Airbus are not a French giant. They're the result of a merger of Spanish, French, German and British aircraft companies. The HQ of Airbus civil aircraft is in France, but for Military aircraft it's in Spain, for helicopters it's in Germany. Wings are made in the UK. There are factories all over those places ( which presents unique challenges in terms of logistics, there's a lot of material out there on how they handle shipping various parts to the correct factory for final assembly, it's fascinating).
The Netherlands is a nice neutral location ( of course with a good tax regime and simple corporate structures) to have the registration.
That's a recurring issue for France because they are not business-friendly. It's not even a question of being a tax-heaven (the Netherlands are not) but simply to make everything unduly complex and costly. We've also seen that following Brexit: Banks would move from London to Paris! Err, no they didn't move or moved to Amsterdam...
I disagree with that characterisation, doing business in France is not that complex. Amsterdam has a giant advantage though - the English language is widely spoken and accepted, which really isn't the case in Paris. If an international organisation is looking to move from London, Amsterdam makes much more sense than Paris, even if we disregard the taxes side of things.
It's complex and costly enough enough that France keeps losing out. It's ridiculous, really, because there is no good reason for this. It's a mix of lack of self-awareness and ideology.
France is not an isolated case, though. Many countries are like that, sadly.
Respectfully disagree. The current president, who was just reelected, literally won his first campaign on "i'll improve things for business, make it easier, enable startups, optimise government expenditures". And he enacted many business-oriented reforms that have enabled quite a startup boom ( for the French and EU standards, of course it's nowhere close to the US due to a myriad of factors like available financing). There's awareness of the challenges, and what ideology would that be?
Ideology, well just with my comments here many would label me 'liberal', which in France is borderline derogatory for some people with the meaning of 'free market capitalist bent on exploiting the working-class', simply for stating that there may be no need for millions of civil servants, myriads of taxes, and red tape for everything... the far left dominates the left at the moment, after all.
Self-awareness because many people in France do not even realise this or how simple things could be. For instance, the 'attestation' people needed to fill in to leave their homes during Covid lockdowns. From abroad it looked like pointless red tape madness, while in France someone obviously seriously thought that was a good idea and they were very serious about it.
I agree that China impacts its companies beyond its borders, but the US government does not. The US government has enough trouble regulating the US operations of US companies,
Unless you bribe someone. They seem to actually care about that.
"TSMC, Samsung want slice of America's $52b chip subsidies" -- https://www.theregister.com/2022/03/28/tsmc_samsung_chip_sub...
"Intel and Micron pushing hard for subsidies from the US government" -- https://www.pcgamer.com/intel-and-micron-pushing-hard-for-su...
"Subsidy Tracker: Intel" -- https://subsidytracker.goodjobsfirst.org/parent/intel
"Intel boss presses Congress for manufacturing subsidies" -- https://www.theregister.com/2022/03/24/intel_chips_subsidy/
And what is wrong with Europe propping up a US company? You shifted the goal post from your original comment ("When will we ever learn to build up our domestic tech industry?"). I showed you that the US is doing exactly that, and now you jump to some other argument.
Many of these mega-companies are publicly listed. Norway alone owns a significant amount of stock in some of these companies. I'm not sure we have a problem. But I'm not gonna complain about trying to change this and get giant high-margin tech company going here in Europe. I'm just not sure how to do it.
No, but do you really have a choice? When you're selling tech products, you're competing on the international market, against everyone, including USA and China. If you work 35h/week and you get outmatched by a team who worked 60h/week, the end user will not care, they go for the best one, and the others loose. That's how international competition works.
And if they can deliver a better product at a cheaper price, they get the customers. The customers don't care if the devs who worked on that product are from US, China, or Europe and if they worked 35h/week or 60+.
That's why Europe is so underrepresented in big-tech internationally and the biggest wealthiest European companies are fashion related(LVMH) where the selling point is the name brand without any substance. That's why EU has not developed the iPhone and why Nokia, Ericsson, Sagem, Alcatel are gone from the mobile space.
Not sure market cap is really the metric here (and only 2 of the top 10 are currently fashion related, the rest is pharma, semiconductor, food, ecommerce, banking, etc.), since those can be easily inflated to completely unreasonable levels and are more an indicator of marketing success than anything else. Maybe take a look at the export statistics and you'll find machines and chemicals taking up a very large fraction.
However much more interesting is how much of the global economy depends on certain companies: Siemens automation (larger market share than the next two competitors combined). Chemicals - BASF is currently the largest chemical producer in the world (with also the largest chemical production complex in the world being located in Germany). Semiconductors - Without ASML, Zeiss and Trumpf (nevermind all the chemical companies) you will have a hard time producing the chips in your iPhone or any modern desktop/laptop. No matter how much I am not a fan, but SAP might also be of relevance in a few companies..
Also Nokia and Ericsson are not gone from the mobile space, they just focus more on the backend stuff. So while your phone might no longer be from them, there is a decent chance that your phone will be talking to a Nokia or Ericsson device over the air (especially since Huawei hit a bit of a snag in the US and parts of the EU).
Whether or not that extremely ideal scenario actually happens remains to be seen.
XFAB-specialty fab in germany
Then maybe they should compete? (though those are not small companies - and with most products that are not as popular with Intel but are popular in other areas)
I think they missed the ARM boat, possibly. But they should go and ask for a slice of that money.
There isn't any. That's because EU taxes and regulations make running a large-scale business less attractive - and because there really is no market for another big-chip manufacturer; if you want to break into that segment (even if it was a 'fair' market), the only way to compete is on the price, and that China can do better.
This is just Germany paying Intel to make unreasonable business decision reasonable.
These things usually happen for strategic reasons. For example, it could be possible that from purely business perspective it's the best to produce all the food in Africa, Russia or China but this leaves EU vulnerable to stuff going on in these places or conflicts with them, therefore you have common agriculture policy and food import-export controls.
The decision makers probably decided that completely relying on foreign IC supply is a risk they cannot afford, therefore they will pay to make it fixed. I wouldn't be surprised if EU also chips in.
I have some confidence that the EU would set favourable terms for given the level of investment.
with them you'll be able to build start ups, etc.
Bosch and Infinion have the fabs there
And before the chip hipsters crawl all over my back to prove we ackshually have a powerful domestic semi industry, please name me another EU company, other than ASML (a company 90% of people here never heard of before the chip shortage), that has the same margins, dominance and ability to shape the market, as much as the US based Intel, Quallcomm, AMD, Nvidia, Apple. I'll wait.
The thing is, other than ASML, most of our domestic semi companies (NXP, ST, Ericsson, Nordic, Infineon, Bosch, AMS, etc.) are only competing for relatively low margin chips with high competition, therefore bring home relatively little money, compared to their US counterparts which have monopolized high margin sectors (general compute, AI, graphics, etc) and rake in the big bucks.
Don't get me wrong, it's great we have our own semi industry, and we make great chips to boot, but I wish we could do more high margin products, as Chinese companies are hot on our heels with massive support from their government.
Remember the failed attempt from the merger of ST-Ericsson to take on QUALCOMM's ARM Snapdragon SoCs and modems in the mobile space 10 years ago? I was talking to a former Dutch manager who had a stint there and his reply dropped my jaw: "Yeah, that merger was never meant to ship any chips that can beat Quallcomm, it was just a vehicle designed to suck up as money as possible and funnel it into the right pockets, while some managers pad their resumes so they can move up at other companies later."
Source: Former EU semi engineer.