The Chip Insider®– Chip Acts: Intel, Hamilton, Jefferson, Jackson, Biden, Trump

Last Friday I explained the rationale behind President Trump's flip on Lip-Bu Tan and the larger strategy governing the move… Since then, SoftBank announced it would invest $2B of equity in Intel, which opened the door for the Trump administration to proceed with plans to invest $10B of CHIPS Act money in Intel. This has, since spurred an uproar … Zoom out and one could have made the same argument for President Biden’s CHIPS Act. A key difference is … A true irony of this difference is that the far right has come full circle to intersect with the far left: in the formative years of the CHIPS Act, Senators Bernie Sanders and Elizabeth Warren had floated the funding-for-equity idea... Hamilton comingled with Jefferson and Jackson: The difference between the Biden and Trump approach to the CHIPS Act is an argument that starts back at the founding of the United States...

Under Biden, the CHIPS Act morphed into a massive program of subsidies and federal control over the companies that would receive funding... It had taken four years to get the CHIPS Act signed into law. Six months later, the industry waited with bated breath as to when the funding would be released. What they got was 5-page disappointment of the “CHIPS for America Fact Sheet” with the subtitle: “Funding Opportunity – Commercial Fabrication Facilities FACT SHEET: Building a Skilled and Diverse Workforce.” No funding. No semiconductors. Just an opportunity for workforce development. The industry experience was like many examples from the book “Why Nothing Works” on how progressivism went from success to failure in the last half of the 20th century. No wonder that the CHIPS Program Office became a lightning rod for Trump…

So the question is, will Trump’s funding-for-equity plan to replace the CHIPS Act turn into corporate statism? Given Trump’s history of being more hands-off, I would argue that this will not be the case for his funding-for-equity deal… Here’s what Commerce Secretary Howard Lutnick had to say …” It’s not governance, non-voting, NON-voting...”

As for Intel, their problems are mostly financial, not technical… So, 1) do you believe Trump’s administration believes they know how to run a semiconductor company, like Intel? Or 2) do you believe they are more interested in investing in Intel and letting Lip-Bu run it… more like a Berkshire-Hathaway? Given that Trump flipped on Lip-Bu so quickly, I would argue the second…

Maxims: It’s always about bad or good leadership and management.

"Forecasting is difficult… Especially when it's about the future." – Yogi Berra