The original story is updated with reactions **
Intel and its CEO Lip-Bu Tan separately responded to criticism from the President Trump and prominent Republican lawmakers demanding Tan step down from his post because of his past ties to China and the possibility of continued threats such ties might cause to US national security.
The Trump demand again raised questions about Intel's plans for chip fabs, with $8 billion already committed to the fab construction effort under the CHIPS Act during the Biden administration. Tan has supported moving ahead with Intel fabs, while some board members support spinning off fabs from Intel. Some analysts told Fierce that questions over Tan's ties to China are perhaps a way to force a fab spinoff.
Intel’s official statement issued late Thursday said the company and its board and Lip-Bu Tan are “deeply committed to advancing US national and economic security interests and making significant investments aligned with the President’s America First agenda.”
Tan separately in a memo sent Thursday to employees said he has called the US home for more than 40 years. “Leading Intel at this moment is not just a job—It’s a privilege,” he said. He pointed out there is a “lot of misinformation” in his prior roles at Walden International and Cadence Design Systems. “I have always operated with the highest legal and ethical standards. My reputation has been built on trust…This is the same way I am leading Intel.”
Without defending his role at Cadence specifically with regards to contracts with Chinese organizations prior to 2022, Tan said he is working with the Trump administration to address matters that have been raised “and ensure they have the facts.”
Tan also asserted the Intel board is “fully supportive of the work we are doing to transform our company, innovate for our customers and execute with discipline—and we are making progress.”
His own defense is nothing short of extraordinary, but comes after President Trump called on Tan to resign over China ties in a post on Truth Social on Thursday. Trump wrote: “The CEO of Intel is highly conflicted and must resign, immediately. There is no other solution to this problem.”
Trump was apparently referencing Tan’s business dealings in China, pointed out by US Sen. Tom Cotton, R-Ark., in a letter to the Intel board early dated Aug. 5 and posted on X.
Cotton’s open letter to the board questioned Tan’s ties to the Chinese government when Tan was CEO of Cadence Design Systems and entered into contracts with Chinese entities some connected to the Chinese Communist Party. Intel has defended Tan and has dismissed suggestions the company poses a US national security threat.
Tan was born in Malaysia and later became a US citizen. He became CEO of Intel in March and has led a strong push to cut costs and improve performance by slowing manufacturing buildouts and laying off workers.
Cadence very recently agreed to pay $140 million for violating US export restrictions by selling to China’s National University of Defense Technology when Tan was CEO there. Cotton is concerned that any advanced US technology sold to China could benefit the country’s military, much as the Trump administration and the Biden administration were concerned about Nvidia selling GPUs to China.
Cotton also pointed out that Intel was awarded $8 billion under the CHIPS and Science Act, the largest to any single company, and is responsible for complying with security regulations. Intel has received $2 billion of the $8 billion and all CHIPS awards are under review by the US Commerce Secretary.
Cotton is chair of the Senate Intelligence Committee and said on X, “The board of Intel owes Congress an explanation.”
Fallout and reaction after Trump's resignation demand--it's all about the fab
**Since Trump's call for Tan to resign and Tan's response on Thursday, other reports have circulated, including a report in Fortune in which four former Intel board members call for shareholders and the Intel board to decide Tan's fate at Intel. They also call for a radical restructuring of Intel, with its manufacturing unit spun off into an independent company, funded partly with remaining undistributed CHIPS Act funds, recently put at about $6 billion.
The four former board members--Charlene Barshefsky, Reed Hundt, James Plummer and David Yoffie--noted that Tan is the fourth CEO at Intel in seven years, with little improvement in the financial future of the company.
Another report in The Wall Street Journal resurrected a months-old disagreement between Tan and Intel Chair Frank Yeary about whether Intel should remain in the business of making chips for itself and clients or exit manufacturing. Yeary has supported exiting from the foundry business entirely, with either a sale or partnership with TSMC, something Tan opposes. Some social network commentaries have suggested Yeary is working with the Trump administration to get Tan removed, but there is no direct evidence that is the case.
Patrick Moorhead, chief analyst at Moor Insights & Strategy, urged the Trump administration and Intel “to figure this out,” in a comment on X. “From the foundry standpoint, the country needs this. For national security and competition.”
Moorhead noted that Intel is working on the most advanced semiconductor node of any US based company. Referring to Tan’s letter, he said what stands out is that the Intel board supports Tan currently. He cast doubt on whether TSMC would want to partner with Intel's fab split off from Intel and suggested either Tan or board members are likely to depart Intel.
Jack Gold, principal analyst at J. Gold Associates, said Trump and others need to provide proof that Tan has committed any wrongdoing in the past with Cadence contracts or through investments by Walden. "Any CEO with ties to international VCs will have contact with Chinese companies, especially if you are in tech," Gold said. "That is how modern day tech works. If they are worried about China getting our secrets, then they should first be looking at who is working for these companies in China."