Beyond market forces, Intel's resurgence is significantly propped up by US government support. Viewing domestic chip manufacturing as a national security imperative, the government can influence hyperscalers to commit to buying from Intel, guaranteeing demand for its new fabs.

Contrary to popular belief, the success of semiconductor industries in Taiwan and Korea isn't primarily due to massive government subsidies. Instead, their governments excel at creating an extremely stable and predictable business environment with streamlined permitting and minimal regulatory friction, which is more critical for long-term, capital-intensive projects.

It's naive to expect private companies to reverse the offshoring of chip manufacturing, a trend they initiated to maximize profits. Pat Gelsinger argues that markets don't price in long-term geopolitical risk, making substantial, long-term government industrial policy essential to bring supply chains back.

Arm's CEO argues the US has lost its 'muscle memory' for 24/7 manufacturing. The core issue is cultural: manufacturing isn't seen as a prestigious career, unlike in Taiwan where working for TSMC is highly esteemed. This cultural gap is a major hurdle for onshoring efforts.

For the next few years, the primary constraint on memory production is not a shortage of manufacturing equipment. Rather, it's the physical lack of clean room space. Memory companies, burned by years of low margins, failed to build new fabs, which have a two-year construction lead time.

The semiconductor supply chain has extremely long lead times. Even with unprecedented demand signals for AI hardware, new memory fabrication plants ordered today will not come online until 2027 or 2028. This multi-year lag guarantees that supply bottlenecks and high prices for components like DRAM will persist.

The U.S. focus on building domestic fabrication plants (fabs) is misguided because fabs represent a lower value-added, highly capital-intensive part of the semiconductor value chain. National security and economic strategy would be better served by focusing on downstream activities like testing and packaging, which are closer to the end consumer.

Intel's recovery isn't just a market story. The US government's investment and push for domestic chip manufacturing (to mitigate Taiwan risk) create a powerful, non-economic tailwind. This government backing effectively de-risks Intel's capital-intensive foundry expansion by signaling guaranteed demand from national security interests.

Contrary to political rhetoric, Siemens' CEO provides a ground-level view that a widespread return of manufacturing to the US has not yet materialized. He cites labor shortages and policy uncertainty as key drags, despite real investments in specific sectors like pharma and semiconductors.