Intel (INTC) is no stranger to scrutiny, having fallen behind global rivals in chipmaking over the past decade. But it’s now facing a much deeper crisis from the highest levels of U.S. politics.
Despite its missteps, Intel has long been a centerpiece of the White House’s push to bring semiconductor manufacturing back to the U.S. and reduce dependence on foreign fabs.
The company has even been described as “the only U.S.-based company with leading-edge semiconductor fabs.”
The March appointment of Lip-Bu Tan — a respected chip veteran and former CEO of Cadence Design Systems — was widely seen as a critical step in Intel’s long-awaited turnaround.
The stock jumped 12% on the news, and analysts credited Tan with having the industry clout to steady the ship. Now, that turnaround is in jeopardy.
On Wednesday, President Trump called for Tan’s immediate resignation, citing alleged ties to Chinese military-linked firms.
“The CEO of INTEL is highly CONFLICTED and must resign immediately,” Trump wrote on Truth Social. “There is no other solution to this problem.”
The post came after Senator Tom Cotton (R-AR) sent a letter to Intel Chairman Frank Yeary, accusing Tan of holding stakes in “hundreds of Chinese advanced-manufacturing and chip firms,” including “at least eight” with ties to the People’s Liberation Army.
Cotton also highlighted Cadence’s legal troubles under Tan’s leadership. The company pleaded guilty last week to illegally exporting software to China between 2015 and 2021 during Tan’s tenure.
Intel, which received an $8 billion grant under the CHIPS and Science Act, the largest single-company award, is now under a microscope.
“Intel is required to be a responsible steward of American taxpayer dollars,” Cotton wrote. “Mr. Tan’s associations raise questions about Intel’s ability to fulfill these obligations.”
Industry pushback
The backlash on X was swift, with some questioning whether the administration is undermining its own reshoring goals.
“Now we know why $INTC isn't more of a focus in the 'Build Here' strategy,” wrote Futurum Group CEO Daniel Newman. “If this is the perception, I expect Intel to continue to be on the sidelines.”
“Forcing Lip Bu Tan out of Intel is probably one of the worst things you can do if you want to save the U.S. chip industry,” added Sutter Hill Ventures partner Kevin Kwok.
CNBC’s Jim Cramer called Tan “incredibly important” to Intel’s recovery and said Trump’s demand is “incredibly salient to this company.”
But Intel hasn’t responded. The company remained silent as of Thursday night, even as pressure mounted.“Intel's lack of external communication recently exacerbates this. A lot,” noted Patrick Moorhead, CEO of Moor Insights & Strategy.
Meanwhile, The Wall Street Journal reported that some in the White House have grown “frustrated” with Intel’s struggles and are reconsidering further collaboration.
With Tan just five months into the job, Intel could now be searching for a new CEO — and another restart to a turnaround plan that was already on shaky ground.
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