Michael
Detailed Course
Background Knowledge
Once a source of pride for American technology, Intel is now in an unprecedented decline. Half a century ago, this chip giant was synonymous with cutting-edge technology, dominating the personal computer chip market and briefly becoming the second most valuable company in the world in 2000. However, today, with a market capitalization of $100 billion, it cannot even make it into the top 15 chip companies globally, and it is almost unable to supply the advanced chips required for artificial intelligence. From a symbol of America’s technological and commercial strength, it has become a target for subsidies and protection, with reports suggesting that President Trump is considering a form of quasi-nationalization for the company, highlighting the fall of Intel.
In the 21st century, the strategic significance of semiconductors has become increasingly prominent: they are a key support in the defense sector and are crucial to the outcome of the AI competition between the U.S. and China. Even proponents of free trade acknowledge the importance of chips and express concerns about the global reliance on TSMC for cutting-edge chips. However, chip manufacturing is characterized by high specialization, complexity, and globalization, posing a significant challenge for supporters of industrial policy. Intel’s predicament is a typical example — having missed the smartphone and AI waves due to arrogance, even with the $8 billion subsidy and $12 billion loan promised by the Biden administration’s CHIPS and Science Act, its Ohio factory’s production has been delayed from the originally planned 2025 to the early 2030s, and the company’s high debt and tight cash flow highlight the harsh reality facing the vision of domestic chip manufacturing in the U.S.
Text Reading
America’s fantasy of home-grown chipmaking
美国本土芯片制造的幻想
How low mighty Intel has fallen. Half a century ago the American chipmaker was a byword for the cutting edge; it went on to dominate the market for personal-computer chips and in 2000 briefly became the world’s second-most-valuable company. Yet these days Intel, with a market capitalisation of $100bn, is not even the 15th-most-valuable chip firm, and supplies practically none of the advanced chips used for artificial intelligence (AI). Once an icon of America’s technological and commercial prowess, it has lately been a target for subsidies and protection. As we published this, President Donald Trump was even mulling quasi-nationalisation.
More than ever, semiconductors hold the key to the 21st century. They are increasingly critical for defence; in the AI race between America and China, they could spell the difference between victory and defeat. Even free-traders acknowledge their strategic importance, and worry about the world’s reliance for cutting-edge chips on TSMC. Yet chips also pose a fiendish test for proponents of industrial policy. Their manufacture is a marvel of specialisation, complexity and globalisation. Under those conditions, intervening in markets is prone to fail—as Intel so vividly illustrates.
To see how much can go wrong, consider its woes. Hubris caused the firm to miss both the smartphone and the AI waves, losing out to firms such as Arm, Nvidia and TSMC. Joe Biden’s CHIPS Act, which aimed to spur domestic chipmaking, promised Intel $8bn in grants and up to $12bn in loans. But the company is floundering. A fab in Ohio meant to open this year is now expected to begin operations in the early 2030s. Intel is heavily indebted and generates barely enough cash to keep itself afloat.
Today’s Word
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fantasy /ˈfæntəsi/ n. fantasy;
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home-grown /ˌhoʊm ˈɡroʊn/ adj. domestic, home-grown;
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chipmaking /ˈtʃɪpˌmeɪkɪŋ/ n. chip manufacturing;
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byword /ˈbaɪwɜːrd/ n. byword;
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cutting edge cutting-edge; most advanced;
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dominate /ˈdɑːmɪneɪt/ vt. dominate;
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capitalisation /ˌkæpɪtəlɪˈzeʃən/ n. market capitalization;
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supply /səˈplaɪ/ vt. supply, provide;
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practically /ˈpræktɪkli/ adv. practically, almost;
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icon /ˈaɪkɑːn/ n. icon, symbol;
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prowess /ˈpraʊəs/ n. prowess, skill;
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subsidy /ˈsʌbsədi/ n. subsidy;
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protection /prəˈtekʃn/ n. protection, protectionism;
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quasi- /ˈkweɪzaɪˌˈkweɪsaɪˌˈkwɑːzi/ pref. quasi-;
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nationalisation /ˌnæʃnələˈzeɪʃn/ n. nationalization;
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semiconductor /ˈsemikəndʌktər/ n. semiconductor;
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critical /ˈkrɪtɪk(ə)l/ adj. critical;
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defence /dɪˈfens/ n. defense;
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spell the difference to make a difference;
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free-trader /ˈfriː ˌtreɪdər/ n. free trader;
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strategic /strəˈtiːdʒɪk/ adj. strategic;
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reliance /rɪˈlaɪəns/ n. reliance;
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fiendish /ˈfiːndɪʃ/ adj. extremely difficult;
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proponent /prəˈpoʊnənt/n. proponent;
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marvel /ˈmɑːrv(ə)l/ n. marvel;
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complexity /kəmˈpleksəti/ n. complexity;
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globalisation /ˌɡloʊbələˈzeɪʃn; ˌɡloʊbəlaɪˈzeɪʃən/ n. globalization;
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intervene /ˌɪntərˈviːn/ vi. intervene;
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be prone to to be likely to;
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vividly /ˈvɪvɪdli/ adv. vividly;
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illustrate /ˈɪləstreɪt/ vi. illustrate;
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woe /woʊ/ n. woe;
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hubris /ˈhjuːbrɪs/ n. hubris;
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lose out to to lose to;
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spur /spɜːr/ vt. spur;
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domestic /dəˈmestɪk/ adj. domestic;
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grant /ɡrænt/n. grant;
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loan /loʊn/ n. loan;
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flounder /ˈflaʊndər/ vi. flounder;
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operation /ˌɑːpəˈreɪʃ(ə)n/ n. operation;
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indebted /ɪnˈdetɪd/ adj. indebted;
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afloat /əˈfloʊt/ adj. afloat;
Source Material
Text excerpted from: The Economist
Author: Unknown
Original publication date: 22 Aug. 2025
Daily Quote
Time goes by so fast, people go in and out of your life. You must never miss the opportunity to tell these people how much they mean to you.
Time is passing, and people come and go in life. Do not miss the opportunity to tell them their significance in your life.
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