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Does it really matter which country is the headquarters for the corporate owner? It's still a German plant hiring Germans and subject to German laws. The rule of law exists in both Germany and the US. German citizens can invest in Intel.

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.

> Does it really matter which country is the headquarters for the corporate owner? It's still a German plant hiring Germans and subject to German laws. The rule of law exists in both Germany and the US.

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 is paid in the country of headquarters

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.

Following the merger between Peugeot and Fiat-Chrysler the new company (Stellantis) is also headquartered in the Netherlands, though I believe that Fiat-Chrysler already was.

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...

> but simply to make everything unduly complex and costly

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.

Not that complex... Right.

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.

> It's a mix of lack of self-awareness and ideology

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?

They always win campaigns by promising a lot of things and then rarely deliver. He is no exception, overall the 'reforms' have been minimal and the 'old recipes' (I.e. hand government subsidies as soon as people complain) have not changed.

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.

> as is the French giant Airbus (Airbus Group N.V.).

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.

The taxes issue is why the EU added a bunch of VAT taxes. Intel pays less taxes (excluding VAT and property taxes) than the amount of this subsidy anyway.

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.

I'd say it's German economic (and more and more political) dominance over the EU and US geopolitical dominance over Germany...

Intel's first fabs outside the US were in Ireland, Israel, and China (since sold). So, false.

The difference is that patents for inventions made for Intel by Intel employees go to the US, whether or not that employee is an US person. Those inventions, if made by Germans, could instead help the German - or European - tech sector. That's kind of brain drain without actually leaving your country and sustainably hurts European competitiveness.

That just kicks the question down the road. It's not like patents don't share the exact same argument. There are US and German patents that only apply in their own countries. What difference does it make where the multinational that owns them receives mail.

Unless you think Intel will refuse to do business with a European company vs a US one.

Right...

"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/

Sure, but that's US money propping up US companies, what's wrong with that?

TSMC, Samsung are US companies?

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.

Wow and you got downvoted too… preposterous. You made a great point.

They were talking about EU domestic production, I think, not the US. Therefore your reply is off-point.

It’s all interconnected, Intel fabs are worthless without ASML, you can think of Intel as almost like a general contractor at this point pulling capabilities from everywhere.

ASML should demand 30% of profits, like Apple does with its App Store.

They do.

https://www.macrotrends.net/stocks/charts/ASML/asml-holding/...

Profit margin is a different thing.

Ah, I missed “of” in 30% of profits. In which case, I thought Apple’s take was 30% of gross on the app store, not profit?

If you want Europe to be as attractive as headquarter location of mega-companies as USA is, you may have to compete with USA on a lot of policies (taxes, labor laws, etc) that would turn Europe into a different kind of society. Do we really want that?

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.

>If you want Europe to be as attractive as headquarter location of mega-companies as USA is, you may have to compete with USA on a lot of policies (taxes, labor laws, etc) that would turn Europe into a different kind of society. Do we really want that?

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.

> 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.

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).

Ideally, this brings a great deal of domain-specific knowledge to the EU and then the workers of this Intel plant are able to go create their own EU plants with their new knowledge.

Whether or not that extremely ideal scenario actually happens remains to be seen.

Zeiss-makes all the highly complicated mirrors that go into asmls machines

XFAB-specialty fab in germany

> domestic semi companies (NXP, ST, Ericsson, Nordic, Infineon, Bosch, AMS, etc.) are only competing for relatively low margin chips with high competition

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.

> please name me another EU company

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.

FTA: Whether or not additional funds are available from the EU is not known.

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.

If Intel’s new EU fabs operate under the TSMC foundry model, is that not a good thing for the EU? Let’s say I’m a smaller company in France looking to get a chip made on a bleeding edge node. I don’t have existing contacts in Taiwan. Surely I just go next door to Intel, right? If Global Foundries couldn’t pull off the leap to 7nm even with ASML next door, who do you suggest is capable of doing so other than Intel, Samsung, and TSMC, and is EU based?

I have some confidence that the EU would set favourable terms for given the level of investment.

It would maybe make more sense if it was a foundry offering their services to numerous fabless companies. Having an advanced one in the EU would be beneficial regardless of where the headquarters of the foundry is. But this one is just going to produce Intel chips as I understand, so basically it's just workplaces, and not a huge lot of them compared to the investment made.

We will have more semico experienced people how actually worked with state of art / bleeding edge stuff

with them you'll be able to build start ups, etc.

there was a strong chip industry in saxony decades ago, but they became way too expensive when china came. they are slowly starting to built back there, but progress is slow.

Bosch and Infinion have the fabs there

sorry, misspelled infineon

You are refering to Robotron, which mostly is known for their Z80s knockoffs (which often were less buggy than the originals.) Given that they did not create chips of their new design, I would not describe them as having been 'strong', though.

Maybe more about AMD having had fabs there, which then transitioned into Globalfoundries?

Hm, "decades" implies GDR ... AMD eventually bought some of Robotron's facilities, though.

Possibly. But start of 2000 when AMD and Infineon in Dresden where in vogue is also more than a decade ago.

True. I like to avoid thinking that way. It makes me feel old.

Should have just bought AMD a few years ago...

That’s called interest on the Marshall plan.