Intel on the brink?

 It is sad to see a technological stalwart like Intel reduced to the state that it is now - directionless and hiving off parts of itself to keep either the process or the processor at its core alive. Taking a look at its board of directors, 6 of its 12 directors have been on the board for less than 5 years. Of the 5 that have been with the company long enough to be responsible for its direction, one has antecedents from VC land, two are from the medical devices field, one is a dean at Berkeley and one is from Boeing. The last one is the CEO. While they all seem distinguished on paper, let's parse through them a little bit. 

Medical devices are embedded systems - with microcontrollers, tiny memories and proprietary OSes. Such a market is best served by NXP / ST-Micro. Someone with that experience may not be the best to set the direction for high performance computing, ADAS or FPGAs. The VC guy seems to have led a tiny, nondescript SW company before joining Intel's board of directors. The Boeing guy is a finance guy and his experience should be valuable at these times, unless his time did not overlap with Alan Mullaly. The dean seems to be a great asset to provide direction to the process side of the business. Of all the directors, it seems only one - Barbara Novick appears to have exactly what the company needs. Her company (BlackRock) is one of the main investors and she's herself eminently qualified.

The rest of the board of directors' careers or income do not depend on the company's performance, so the headless meandering of Intel comes as no surprise to me. Others have written about this before [1, 2].  

I'm wondering how INTC's other institutional investor Goliaths like Vanguard, State Street Corp, etc. will handle this situation since there's no public evidence of a proxy fight. It appears as if institutional investors were hardly concerned about Intel's stock performance all these years. The HBR says [3] that only 17% of board changes happen with proxy fights (dated data), and that too when hedge funds are involved, so I think this slate of directors will be the ones driving the company aground.

One might say that a well functioning board needs to have independent directors. There's plenty of evidence available to counter that. And who has the time to make a well researched argument when all my searches will have algorithmic responses that strengthen my bias anyway.

I firmly believe that a new corporate structure for companies is needed. Here are my suggestions that still stay true to the legal requirement that the board acts in the best interests of the investors:

1. The board must be made of representatives of the key investors. Investors must commit to hold their shares for 5 years to discourage short-sales.
2. The 5 year period for major shareholders should be offset by 1 year, to emulate a bond-ladder kind of approach.
3. Market-wide events must also have repercussions in terms of a change of the board-of-directors.
4. The board must attend employee all-hands meetings and answer open-mic questions.
5. Layoffs must have consequences - at both the board of directors level and at the company executive management level. This will discourage hire-and-fire and encourage more investment in employee training.
6. An employee representative must be at every board of directors' meeting. This could be a rotating position at a certain title so that the board hears a diversity of voices.

I wish Intel all the best in its restructure efforts and hope it emerges stronger. A la https://x.com/michaelharriot, this post isn't about Intel.

 Further reading

1. https://www.linkedin.com/pulse/go-hard-home-why-board-directors-need-have-skin-game-kylie-hammond/

2. https://www.reuters.com/breakingviews/european-boards-have-too-little-skin-game-2024-07-17/

3. https://corpgov.law.harvard.edu/2021/06/11/the-directors-guide-to-shareholder-activism

Protestors

 सलाम उन लोगों को, जिनहोने उठाई अपनी आवाज़

सड़क पर आए और नारे लगाए बिना कोई आराम

COP28 दुबई तक पहुँची लिसिप्रिय कंगूजाम

बोली बंध करो जीवाशम ईंधन, १२ वर्षीय जाँबाज ।

डरे हुए लोग

जो मूह नहीं खोल पाते, वह क्या चलाएँगे ज़बान

वह उखड़ेगा परचम, जिसने बेच दिया हो ईमान?

जो सीधे खड़े नहीं हो पाते, वह कैसे तानेंगे सीना

इन लोगों के लिए, झुकने का नाम ही है जीना

डरे हुए लोगों की आँखें मीची है मंदिर के बाहर

लड़ते रहो बे उम्र उमर, शीघ्र समाप्त हो यह ग्रीष्म लहर ।  

In my most ideal life, I'd

1. be a manager
• of a Premier League football team.
2. be a hooligan,
• a local at any one of the English football clubs, know all the songs, and travel with the team.
3. bat, chew gum and not wear a helmet,
• like Vivian Richards.
4. get cast as the youngest son. 
• Michael Corleone.
5. not be named Kuntal.
• Bond, James Bond.
6. like mushy tomatoes, 
• but only when avoiding bulls in La Tomatina in Buñol.
7. have a milk mustache
• and live on a quiet farm in the Italian Alps.
8. run
• and bike and swim like a triathlete.
9. work remotely
• on clever things on an Apple laptop.
10. fight injustice 
• by telling bullies over the phone "you'll hear from my lawyer."
11. have no quiet celebrations
• and do dandiya on every Indian festival.
12. say "kai po chhe" every Sankrant,
• when flying a kite strung with glass-covered manja.
13. be witty
• and get published in The New Yorker as a short story writer.
14. be a purveyor of fine writing instruments
• and write cursive as neatly as my dad would, with a smooth Hero fountain pen.

Standardized tests, affirmative action and government jobs

 The elite colleges of the country have deviously contrived to keep their admission policies beyond scrutiny by lumping standardized tests with affirmative action. They are, in fact, separate and you can have both in place. Affirmative action must continue and be given a growing proportion of admission spots until there is meaningful race equality. For all the spots, standardized tests must be one of the inputs. The final admitted class must mirror the racial distribution of scores on standardized tests.

Let's work through some examples of the proposal, in parts

Growing proportion of affirmative action spots

1. Say the percentage of affirmative action spots is 5% today. In the next 5 years, it must change to 50%. 5 years because corrective action requires immediacy, otherwise it becomes like the Brown vs the Education board - the students who petitioned did not benefit from desegregation. 50% because meaningful change requires substantial numbers.

Standardized tests

1. From personal experience with GRE, and my son's experience with SAT, I can say that you can prepare very well just with free material. I studied from an old book that was used by my friend and my son studied off the ETS website. ETS is the administrator for the tests. Public libraries have test prep books.
2. Within the affirmative action spots, students with the highest scores should be preferred.
3. Say the race distribution of the highest quartile is: 30% A, 30% B, 40% C, then even after all factors such as extracurricular activities have been considered, the final admitted class should have the same distribution of races.

Government jobs

Finally, the government can do more in ensuring that diversity of thought is engrained in every institution of the country. There is no reason that the Secretary of the Treasury comes from Goldman Sachs, the head of the Federal Reserve comes from Harvard and the Supreme Court Judges come from Yale.

I think socially aware companies such as Apple should withdraw its Amicus Brief here:

Documents Archive - Harvard Admissions Lawsuit

legal_-_filing_-_200521_-_businesses_-_2020.05.21-16_brief_for_amici_curiae_amgen_et_al_.pdf (harvard.edu)

Thums Up and Misplaced Patriotism

It must have been some time in the 1990s in India when the government allowed Coca Cola back into India. In my patriotic zeal propelled by teenage absolutism, I decided I would only drink the Indian brand "Thums Up," a cola that had a similar color and flavor as Coke. Thums Up was made by a company called Parle Products and it was bottled at a factory not far from our flat. Within days, I read the announcement that the owner of Parle Products had sold his company to Coca Cola. He had looked out for his own financial interest, and made me realize how naive I was to not think of mine. 

I thought of this story because of the convergence of a few events:

1. The CHIPS for America Act
2. India awarding contracts for trains to European Alstom
3. Honor's withdrawal from India

The CHIPS act has laudable goals to ensure that the US does not lose competitiveness in semiconductors. As long as the equipment to make semiconductors, the tools to design them, and the latest designs to use that equipment all originate from the US, then does it really matter where the actual chip gets manufactured in volume? The geographical closeness of Taiwan and South Korea to China and China's growing aggression in the Taiwan Strait seem to be the key reasons why this act was needed to secure continued supply of semiconductors. One can fully expect a future where the most advanced chips will be made in China, with our without American help. At that point, we'd just be artificially limiting our own access to lifestyle improvements made with Chinese technology.

Now let's take the case of the gradual build out of slow "metro railways" in India and the uncertainty of the rollout of the first "bullet train." By picking Alstom and Japan based companies, the Government of India is very likely penalizing the Indian populace by paying more for technology that's been most widely deployed in China. I had made a similar argument when India was picking mobile network technologies. National security concerns can be allayed technologically.

Finally, and Indian customer feeling patriotic and buying a more expensive local brand over a cheaper Chinese brand is doing disservice to himself, just like I was, when I stuck with Thums Up. Let's say a local manufacturer, takes a local loan and builds an inferior phone. Is that the best utilization of capital? Even with the self-evident assumption that all people are equally capable, the phone will likely be inferior because the local manufacturer does not have the same sales volume, supplier discounts, research and development as would a higher volume Chinese manufacturer.

References

1. Titles - H.R.7178 - 116th Congress (2019-2020): CHIPS for America Act | Congress.gov | Library of Congress
2. https://www.railadvent.co.uk/2022/07/alstom-wins-order-to-supply-52-metro-trains-to-india.html
3. Former Huawei smartphone sub-brand Honor said to withdraw team from India amid geopolitical tensions | South China Morning Post (scmp.com)

India at 75. A commentary on freedom.

Freedom is the ability to act without fear. The actions could be speaking one's mind, opening a business, traveling to destination of one's choice and even to do nothing at all. Freedom is enabled by personal security. Security against hunger, security that comes with shelter and security that your individual plan for life will not be upset by the changes around you. What is the pursuit of happiness other than the feeling that you can work yourself to a better situation by acquiring the education and the skills you think you need? These thoughts come to mind on the occasion of India's 75th Independence Day. I am an American citizen now, but I feel I can credibly express some fresh perspectives on freedom.

1. Is everyone in India free? The answer is clearly no. Kashmiris aren't free. Nagas want freedom. The land belongs to the people and the people should be able to decide if they want to be associated with a certain country or they want to be by themselves. My Gujarati family emigrated to Maharashtra generations ago. I think Maharashtra would do better as a free country. It doesn't make sense for Maharashtra to send money to the central government when farmers in its own province Vidarbha commit suicide when crops fail. The central government was created by the British to manage India. Unfortunately, we Indians have been trained to think that the political party in power in Delhi is indistinguishable from India.
2. The meaning of the word Adivasi is - early resident. If land ownership were to be decided by who occupied the land first, then India belongs to Adivasis. Everyone else must start paying rent to the Adivasis for occupying their land. It's not as ridiculous as it sounds. We, Indians have been paying tax to the occupiers for a long time, just not the Adivasis. We paid taxes to the Rajas and the Maharajas, to the Nawabs and the Chhatrapatis, to the Sultans and the Peshwas. We are used to propping up royalty with our labor and bowing before them. What justifies forcibly paying a portion of the income to a state? Clearly, my family must have thought that they have better prospects in Maharashtra. Maybe we were escaping the plunder caused by foreigners in Gujarat and accepted the terms of staying in Maharashtra. I  have emigrated to the US for similar reasons - better prospects. Freedom is perhaps the ability to pick whom to pay taxes. Had the people of Arunachal Pradesh been a part of China, their per capita income would have been $17,200 per annum instead of $2,453, in terms of purchasing power parity. Of course one can't put a price on escaping the Cultural Revolution, but it does make me pause for thought that an accident of geography would have changed the lives of so many people depending on which side of an imaginary line they landed upon.
3. One aspect of freedom is the ability to travel worldwide. With an American passport, I can travel to Europe, Japan, Australia, Korea, Canada, etc. without a visa. I am the same person I was - brown skin, Indian looks, but the paper I carry lets me travel freely. If I were in India, I would have to get a travel visa by first proving that I have a strong reason to return to India. Why would a foreign country want proof that Indians want to return home before granting a visa? The answer is the stark difference in the quality of life and the emigration statistics. A vast majority of Indians prefer the higher quality of life - good schools, roads, affordable houses, cars, ability to practice religion freely, etc. available in developed countries. Unless we are educated, developed countries feel like we would not contribute to their national advancement and that makes it harder to get a visa. Unless the Indian passport works without a visa, Indians should not believe any rhetoric from the Indian leadership about the worldwide respect for the Tiranga, and that India sets an example to the world, as sometimes claimed by flag waving Indians.

Neither Ambedkar, whom I greatly admire, nor the American founding fathers had the perfect vision for a just future. The constitution, laws, rules must be relegated to their appropriate position - subordinate to the welfare of people. True freedom is still far away.

Kuntal.