Your whole premise is that China can't do it on their own, which is proved false by the supercomputer chip ban. Now Intel not only lost their market, China actually gained the capability and revenue to support future R&D. Your leaders at Intel appear to know more about business than you do: that it is higher risk over the long term to lose market share, because that gives your competitors revenue to support R&D and opportunities to work with and leverage a customer base to develop a better product. China has no problem making a CPU on their own. They just can't make a commercially competitive CPU, yet.
I've read through your argument multiple times and it still doesn't make sense to me.
> Your leaders at Intel appear to know more about business than you do: that it is higher risk over the long term to lose market share, because that gives your competitors revenue to support R&D and opportunities to work with and leverage a customer base to develop a better product.
Why would Intel be losing market share by not manufacturing chips in China? They may still manufacture the same number of chips but with less profit.
> China has no problem making a CPU on their own. They just can't make a commercially competitive CPU, yet.
Pretty sure parent comments meant processor fab tech in addition to processor tech. That is, tech that makes it possible to manufacture a competitive CPU at competitive costs.
Fabs are so fabulously expensive nowadays that you need serious volume to make them viable, and the volume today comes from mobile phones, IoT and telecoms equipment.
That's why TSMC and Samsung are spanking Intel in fab technology, which was originally Intel's competitive advantage, because Intel dropped the ball on ARM architecture chips due to its inwards-looking obsession with profitable x86. Intel is now boxed into the same low-volume corner as, say IBM PowerPC and ultimately condemned to irrelevance.
The last thing you want is for the Chinese to start investing in their own fabs and have a captive source of demand for those fabs' output, e.g. x86/x64 chips licensed from AMD. Quite frankly, they're going to steal the technology from TSMC and Samsung, not a has-been like Intel that's been incapable of moving to 10nm.
I'd argue a company like Huawei is probably able to make that kind of fab investment (they also design their own ARM chips), and they've shown in the past they are willing to take the long view by out-investing in R&D their Western competitors managed by the typical short-termist bean counter MBAs. That's why Huawei's CFO (and daughter of the founder) was arrested in Canada, to pressure them not to cooperate with the Chinese government's "Made in China 2025" plan to wean itself off dependence on US-controlled microelectronics. The fact John Bolton admitted he was aware of the move shows it was made on geopolitical grounds.
As I said earlier it is not just about profit at the margin to put a plant in China, it is about showing good faith with the government. Intel's technology lead is relative. It faces competitors like Loongson (MIPS), ARM licensees, AMD licensee and even Alpha licensees. It can't afford to take an antagonistic stance against a very large customer as any lost sales would go to supporting a competitor, and more importantly give the competition a customer base to sustain a positive feedback cycle of product improvements.
