Intel has been deemed a national security asset. Essential infrastructure.

The government (both current and previous administrations) is doing everything it can to make sure they do keep up, at the very least. And with enough money being thrown at it, they probably will.

Also keep in mind that none of the big chip purchasers (Apple, Nvidia, etc), want to depend on one supplier for their chips. There are huge incentives among them to encourage Intel's success.

Nobody benefits if just one company controls the state of the art in chip manufacturing, and Intel is one of maybe two other companies positioned to have a chance at competing effectively with TSMC.

I've always thought letting the free market decide everything is not an optimal strategy. Protecting sovereignty of key industries like this is a good example.

What IMO is a bad strategy is the aversion to nationalization that exists in the USA. They buy billions worth of shares in key companies to inject capital during times of crisis, to later divest and refuse to be a player in industry.

China's model is much more complex. There's state-owned companies, companies where the state is a major stake-holder, and private companies too. It seems to afford them more tools to push and steer industries as they see important.

The USA is no stranger to this at smaller scales; airports are state run (at the municipal or state level). This rids them of the burden of profit, and allows them to be strategically use for the broader benefit when it makes sense.

Some are profitable; state-run doesn't necessarily mean unprofitable. But some can written off as infrastructure investments that don't make money but make other industries in the region competitive. At some point this makes sense if you want to keep pushing forward; let's stop worrying too much about making money on X, because if X is a widely-available commodity, we can instead make money on Y and Z.

I see it in Mexico too. Mexico's private healthcare is affordable and good because it has huge state-run healthcare system to compete with. State-provided healthcare isn't the best or fastest healthcare you can get, but it is free. This certainly puts competitive pressure on private healthcare companies, and in a way gives the Mexican government the best regulatory tool: the market itself. The Mexican government isn't trying to destroy private health, but via the state health enterprise it gains tools to steer and push the health industry in ways it may deem important.

Looking at the state of EVs and the car industry, I think it's clear whatever the Chinese government did to incentivize EV innovation was more effective than the federal incentives the USA government provided. At one point the USA government had a 60% stake in General Motors [1]; meaning it was nationalized, before being privatized again by 2013.

I just wonder what the USA could've done with that machinery; could they have offered a cheap EV, even if it's low quality, to push adoption, competitive pressure and get supply chains going? Could they have further commoditized certain parts to lower costs? Could they have strategically opened factories in certain locations to lower the risk and investment cost of future companies, and this way get the ball rolling on creating new auto-industry regions? We will never know, but we do know the USA's auto industry is now on the defense playing catch-up to China, and there seems to be little the USA government can do except placing tariffs and offering subsidies.

[1]: https://www.cnbc.com/2013/12/09/government-sells-the-last-of...