Intel (NASDAQ: INTC) shares are down 3.36% on Thursday following President Donald Trump’s public call for the immediate resignation of CEO Lip-Bu Tan over alleged conflicts of interest related to China.
The presidential intervention comes as Tan faces mounting pressure from lawmakers over his previous business relationships with Chinese entities, raising national security concerns about Intel’s role in critical semiconductor manufacturing.
Tan assumed the CEO role at Intel earlier this year as the chipmaker faces significant challenges including intense competitive pressures and manufacturing difficulties.
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Tom Cotton’s letter to Intel’s board chair
The presidential demand follows a letter sent Wednesday by Senator Tom Cotton of Arkansas, chair of the Select Committee on Intelligence, to Intel’s board chair Frank Yeary regarding Tan’s ties to Chinese firms and a criminal case involving his former company, Cadence Design Systems Inc. (NASDAQ: CDNS).
Cotton wrote to “express concern about the security and integrity of Intel’s operations and its potential impact on U.S. national security.” The senator asked whether Intel’s board knew about subpoenas sent to Cadence during Tan’s time as CEO and what measures were taken to address concerns.
The letter also questioned whether Intel required Tan to divest from Chinese chip firms linked to the military or Communist Party, particularly given Intel’s role in the Secure Enclave program, a Biden administration initiative for secure defense microelectronics.
“Intel is required to be a responsible steward of American taxpayer dollars and to comply with applicable security regulations,” Cotton wrote. “Mr. Tan’s associations raise questions about Intel’s ability to fulfill these obligations.”
Reuters reported in April that Tan invested at least $200 million in hundreds of Chinese manufacturing and chip firms between 2012 and 2024, some with military ties.
Last week, Cadence Design agreed to plead guilty and pay over $140 million for selling chip design products to a Chinese military university during Tan’s tenure as CEO from 2008 to 2021.
Featured image via Shutterstock.
