Intel is the only company capable of both designing chips and manufacturing cutting-edge semiconductor chips on American soil as an American company. Chip manufacturing is as strategic for the US as nuclear weapons capability. Intel is America's only chance to produce its own chips; it's absolutely impossible to simply start a new company and say, "Let's produce chips." Building a modern chip factory costs between $10 and $20 billion. A single EUV machine costs over $300 million, and Intel is the only company in the US to possess such a device. Furthermore, they have a long-standing strategic partnership with ASML, so much so that Intel secured the entire first batch of High-NA EUV technology before TSMC.

Even if you had the money, accumulating the "know-how" to operate those factories would take decades. Despite spending incredible amounts of money with state support, China is still struggling to catch up with the US in cutting-edge technology. Intel also has more employees than other chip-designing companies like AMD and NVIDIA combined, although they are currently rapidly laying off workers to replace them with automation. Furthermore, it's a memory where chip design is based on two main architectures: x86 and ARM. x86 is Intel's architecture; other companies pay Intel royalties to design chips using this architecture. But that's not the most important part; Intel possesses the best competitive advantage a company can have: it's indispensable for the national security and technological independence of the United States.

Intel was essentially a company working for the state with private equity money; instead of just giving grants, China formalized this secret partnership by acquiring a 10% stake in the company. If American companies continue to have their chips manufactured in Taiwan, as they do today, it's very clear that China will crush them all within a decade. Once China starts producing cutting-edge chips itself, it will undoubtedly take steps to disrupt Taiwan's chip production and export. Therefore, America's reliance on Taiwan is absolutely out of the question.

TSMC is aware of this and is beginning to open factories worldwide, but there are four major problems:

1) The brain is in Taiwan, the rest are just arms. If China invades Taiwan or imposes an embargo, the technical support, updates, and flow of engineers from the headquarters in Taiwan to the Arizona factory will be cut off.

2) TSMC will always keep the latest technology in Taiwan for the sake of the Taiwanese government and the company's survival. The most advanced technology will stay in Taiwan, while outdated technology will go to America.

3) Chip production doesn't end with processing wafers. That wafer needs to be cut, packaged, and turned into a usable chip. TSMC prints the chips in Arizona, but it has to reload these wafers onto ships and send them back to Taiwan for packaging (because the packaging facilities are in Asia). This makes the supply chain dependent on Asia again.

4) The documentation (IP) that specifies the operating temperature, chemicals, seconds, and pressure of the machines is TSMC's biggest trade secret. They store this information and libraries in Taiwan and send them to the factory in encrypted form. If relations between the US and Taiwan/China deteriorate, the machines in the Arizona factory will become scrap metal. Because the intellectual property to operate those machines is not in the hands of the US.

Another issue is the claim of production failure; it is constantly said that they are experiencing 'problems' with 18A. Intel had officially announced that it had started 18A production. TSMC is also known to have experienced similar difficulties in the 2nm process; these are technically normal processes inherent in semiconductor manufacturing.

To summarize simply; the aim is to obtain as many working processors as possible from a wafer, but not every processor produced has the same frequency speed. For example, 10% of the production provides 5.3 GHz performance, 60% provides 5.1 GHz performance, while 30% are scrapped due to being outside the specification. Increasing efficiency (yield) and experiencing glitches in the binning processes is normal. However, Intel has now moved beyond this 'problem-solving' phase. Because the company has officially transitioned to the HVM (High Volume Manufacturing) phase. The HVM phase cannot be entered while critical issues persist on the production line. Reaching this stage proves that the product has reached a certain level of maturity and commercially acceptable yield levels have been achieved. We know there is a 7% yield growth rate every month. I believe that with new technologies, EMIB has an advantage over CoWoS, and that big-tech will shift towards IFS as NVIDIA exploits capacity at TSMC.

Finally, when you look at Intel's founding members, you see not ordinary executives, but legends. Nobel laureate Robert Noyce, along with Jack Kilby, is remembered as the inventor of integrated circuit technology. On the other hand, Gordon Moore, the creator of the famous Moore's Law, which determines the speed of technological development, is also among these names. As I mentioned before, to understand the scale of the sector, a comparison is needed: the combined workforce of Nvidia, AMD, and ARM is only about half of Intel's workforce. I make this comparison so you can imagine the human resources and knowledge accumulated within this company, the founder of the sector, and to understand the technical depth and capacity it possesses. Considering the projects undertaken with the US Department of Defense and the moves to bring chip production back to US soil, it is clear that Intel will maintain its decisive role in the sector for many years to come.

So far I've talked about IFS, but the Intel Products side is also quite critical. The claims that it will exit the chip business and become solely a foundry are technically meaningless. Intel's architecture side is still massive and impossible to shut down. CPUs, and especially the server side, still form the backbone of the market, with Intel controlling more than half of that. On the GPU side, they are now focusing on inference and productivity (the Sambanova acquisition proves this). They were already involved in networking and are now entering the ASIC market with the advantage of Foundry. In this area, under the leadership of Lip-Bu Tan, they will leverage their 40 years of experience gained with Cadence. I want to draw attention to LBT's motto: "Stay humble. Work hard. Satisfy our customers." While these may seem cliché, they represent a radical cultural reprogramming in the context of Intel's historical arrogance regarding process superiority. This analysis is not investment advice and is for informational purposes only. Do your own research before making investment decisions.