News Intel Cuts Dividend to Spend More on Fabs

[bit_user]

I do not agree that Intel is making this decision in the best interest of its investors, the public, or on behalf of the government.

If it's not in anyone's interest, then why are they doing it?

We are collectively giving them a lot of money and, in my opinion, they are being reckless with spending and expansion. What good is safeguarding US chip manufacturing if they over extend their position and get burned in the US or elsewhere.

The reason Intel is saying it wants to build fab "shells" is exactly so that it doesn't have an over-capacity situation. This is showing the tension between company's interests and national interests, because it would take years to buy and setup operations in these fabs since it takes ASML a long time to build fab equipment and their order queue would be quite big if/when TSMC's Taiwan operations look to be in imminent threat. That's why we can't really have a comparable domestic fab capacity without further subsidies for fallow fabs, analogous to how the government underwrites farmers, to keep them solvent when food prices drop too low.

The government giving any money to any industry is by definition corporate welfare regardless if they get something out of it later. It can be called whatever by whoever, money given by the government is welfare by another name when its convenient.

It's not welfare because it's transactional. Intel doesn't get the money just for being Intel, they get it because they agree to do something with it that is beyond what they'd have done without it.

Reducing their dividend payout, in my opinion, was not obvious given their historical precedent of not doing so regardless of their immediate financial need for more money for whatever the reason.

We've had historically low interest rates for most of that time. As others have mentioned, it would be costly for Intel to fund the needed investments by borrowing.

At the end of the day, it is still a smack in the face for investors.

Only the parasites that are all too happy to suck the lifeblood out of it. Anyone who's in it for the long term should trust what Intel's board & management have decided. They're not running a charity and are still taking actions they see as being in the best interest of investors (which, as I previously mentioned, include themselves). If I had some extra cash, I might even consider buying INTC.