Intel Cuts Fab Buildout by $4B to Pay Billions in Dividends

I suppose I would be the minority in saying &quot;so what?&quot;<p>A 5% year over year increase in dividends that are a Very Big Deal to institutional investors that likely make up a large majority of their shareholders and hold the stock BECAUSE of those dividends.<p>Meanwhile, capex is still ongoing and the reduce in spending could just as easily be seen as a bearish response to potentially poor new development plans. What if project costs were exceeding mid-term profit projections? Or potentially never going to be profitable? What if... ad infinitum.<p>Responsible stewardship of a company like Intel requires accounting for a great many variables that do not get conveyed directly to shareholders. That dynamic is why representatives are a thing. That is why there are boards of directors.<p>The fact that the government is handing them a subsidy, the fact that they cut some new development projects, and the fact that shareholder dividends saw a 5% increase can, and from my layman&#x27;s perspective, probably are completely and totally unrelated, and questioning the validity of any one of those things due to the presence of the others goes into the territory of &quot;need more info&quot;.

I don&#x27;t know anything about the semiconductor industry, but it&#x27;s not hard to come up with a plausible argument for this:<p>It makes sense to cut back on investment if they think there will be an oversupply of chips. In which case, returning the money to shareholders doesn&#x27;t seem wrong, if they don&#x27;t have a good way to invest it?<p>It doesn&#x27;t show much confidence in their ability to succeed and regain market share, though.

Had high hopes for Pat Gelsinger, but this is one of the most egregious failures of corporate leadership I’ve ever seen, short of fraud. In the context of geopolitical changes since Russia’s invasion of Ukraine earlier this year, it’s also one of the most dangerous. We in the West have a long road ahead on semi manufacturing and we are falling over in a heap at the starting line.

Is it too late to stop the CHIPs bill from becoming law? This is comically bad optics for Intel.

That kinda „explains” why they want the US gov to give them money for new fabs?

Pardon my language, but how the fuck is it possible to ruin a company like Intel with 0 consequences like this?<p>Something is deeply wrong with our economic&#x2F;legal system.<p>Why do semi-making jobs pay so poorly when they literally underpin everything? But kids out of college make 150k mashing NPM packages together?<p>I blame free trade and the fact that the fed is allowed to engage in quantitative easing for a lot of these issues. Why care about the country when you can just play financial games instead?

I wonder if Gelsinger is in trouble. Part of his pitch was that Intel was going to accept having lower profits than they could choose to have, for the sake of fab investments that would pay off later. The board may have said &quot;No, Pat, pay out more dividends instead&quot;.

Why does Intel provide a dividend at all rather than investing in a better product

If Americans considered Intel an ally when passing the CHIPS Act.. with allies like these, who needs enemies?