US President Donald Trump on Thursday demanded the immediate resignation of Intel’s new CEO, Lip-Bu Tan, saying he is ‘highly conflicted’ due to his alleged ties to Chinese companies and raising doubts on plans to revitalize the struggling American chipmaker.
"The CEO of INTEL is highly CONFLICTED and must resign, immediately. There is no other solution to this problem," Trump said in a post on his Truth Social platform.
Trump’s comments came after media outlets reported that Senator Tom Cotton had sent a letter to Intel’s board chairman Frank Yeary to question Tan’s ties to Chinese firms and ‘express concerns about the security and integrity of Intel’s operations and potential impact on US national security’.
Cotton, a Republican from Arkansas, claims that Tan “reportedly controls dozens of Chinese companies and has a stake in hundreds of Chinese advanced-manufacturing and chip firms. At least eight of these companies reportedly have ties to the Chinese People’s Liberation Army (PLA).”
Cotton also asked Intel if they are aware of the recent criminal case involving Tan’s former firm, Cadence Design, and if Tan has disclosed any other ties to China.
The senator cited an exclusive Reuters report in April revealing Tan’s investments of at least $200 million in Chinese chip manufacturers, including some that were linked to the PLA.
Trump’s intervention marked an unusual instance of presidential intervention in corporate leadership and has sparked concerns among investors that it would set a precedent.
"You don't want American presidents dictating who runs companies, but certainly his opinion has merit and weight," said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.
A change in Intel’s leadership might also spell turmoil for the tech giant, a pioneer of the US semiconductor industry that has since fallen behind competitors following years of underperformance and management blunders.
After being named as Intel’s CEO in March, Tan launched a major restructuring campaign that included plans to lay off up to 22% of Intel’s workforce and pause construction of factories in Europe. He also vowed to personally review and approve each of Intel’s upcoming major chip designs.
“There are no more blank checks. Every investment must make economic sense. We will build what our customers need, when they need it, and earn their trust through consistent execution,” Tan wrote in a memo to employees.
In a statement on Thursday, Intel defended its chief executive and reaffirmed its commitment to US national security.
"Intel, The Board of Directors, and Lip-Bu Tan are deeply committed to advancing U.S. national and economic security interests and are making significant investments aligned with the President's America First agenda," the company said.