Good Stewards Of Government Capital -- February 2, 2024

Locator: 46720CHIPS.

Takeaway: if you like tech companies that depend on government subsidies -- we have one for you -- a Wall Street darling, Intel. 

This is just incredible -- how "honest" everyone is with regard to government subsidies. LOL.

Much could be said, but I don't want to get political. But I may say it later.

A "slow chip market." Poppycock. Did the headline writer read the story? It's nothing about a "slow chip market." Nvidia, AMD, Skyworks are surging. Mark Z has said he is stocking up on blades -- there's no "slowing chip market," except for perhaps the type of chips Intel is designing.

Link here.

Intel is delaying the construction timetable for its $20 billion chip-manufacturing project in Ohio amid market challenges and the slow rollout of U.S. government grant money to grow the domestic industry.

While Intel’s initial timeline had chip-making starting next year, construction on the project’s manufacturing facilities now isn’t expected to be finished until late 2026, according to people involved in the project.

Chip-making could begin after that, once Intel installs the complex and expensive machinery needed to make advanced semiconductors.

Managing large-scale projects especially in our industry often involves adapting to changing timelines,” an Intel spokesman said. “Our decisions are based on business conditions, market dynamics and being responsible stewards of capital.”

Intel shares fell about 2% to $42.55 in early trading Friday.

Two years ago, Intel had targeted production in 2025, although Keyvan Esfarjani, an Intel executive overseeing its manufacturing operations, said at the time that the scope and pace of the expansion would “depend heavily” on government funding.

The first two chip factories are part of a complex in which Intel has said it could invest up to $100 billion.

The spokesman declined to give a new target for chip production at the facilities, but said the company remained fully committed to the project. Significant progress has already been made at the site, with more than 1.6 million work hours completed and enough concrete poured to cover a football field with a more than five-yard-tall slab.

Major chip projects sometimes are delayed. Taiwan Semiconductor Manufacturing Co.recently said it was delaying production at a $40 billion chip plant complex in Arizona as negotiations over U.S. subsidies progress.

I could be wrong but it's not my impression that META, AMZN, and NVDA are relying on government subsidies to grow. In fact, as far as I can tell, these companies are hitting Congressional headwinds from many directions.

META was grilled by poilticos on Capitol Hill yesterday for inappropriate content; Amazon is seen as a monopoly; and the Biden administration is specifically singling out NVDA from selling its chips to China. 

As noted INTC is falling; META and AMZN are surging.