US Lawmakers send letter to Intel about China ties
Intel Corporation's (INTC) appointment last March of Lip-Bu Tan as its new chief executive was widely seen as a critical step in company's long-awaited turnaround.
A respected chip veteran and prominent venture capitalist in the tech space, Tan was seen as someone who had enough industry clout to revitalize Intel's long-suffering business.
INTC shares immediately jumped 12% on news of his appointment.
But five months after Tan was brought on board, President Trump was calling for him to be ousted.
“The CEO of INTEL is highly CONFLICTED and must resign immediately,” Trump wrote on Truth Social in August. “There is no other solution to this problem.”
The post came after Senator Tom Cotton, a Republican from Arkansas, 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.
But after Tan met with Trump, he was able to allay the president's concerns and Trump backed off his calls for him to resign.
In fact, the US government took a 10% stake in Intel the same month that Trump had called for Tan's resignation.
Commerce Secretary Howard Lutnick called the controversial deal an “historic agreement” in a post on X that will “strengthen U.S. leadership in semiconductors” while boosting the economy and national security."
Intel has been central to Washington’s semiconductor strategy, seen as the linchpin in efforts to bring chipmaking back to U.S. soil and reduce reliance on Asia. The company has even been described as “the only U.S.-based company with leading-edge semiconductor fabs”.
Intel's ties to blacklisted company is scrutinized
But as the US government now has an ownership stake in the company, Intel is once again coming under scrutiny about its ties to China, this time from a bipartisan group of US Senators.
In a letter sent to Tan from Republican and Democratic members of the Senate's Banking, Housing, and Urban Affairs committee, the lawmakers cited a Reuters report that said the company was testing chipmaking tools from ACM Research, a Chinese state-backed company whose affiliates have been placed on the US government's Department of Commerce Entity List, which means it is blacklisted.
“Given extensive national security restrictions on ACM subsidiaries, Intel’s relationship with ACM is concerning,” the Senators wrote.
ACM Research Shanghai and ACM Research Korea were blacklisted by the Commerce Department in December 2024 for their role in the development or production of integrated circuits for military end use.
According to Reuters, Intel was testing two ACM-manufactured “wet-etch” tools that could be used in its most advanced chipmaking processes.
Wet-etch tools are used in semiconductor manufacturing equipment to create precise circuit patterns.
“By operating in Intel’s facilities, ACM could gain exposure to cutting-edge chipmaking processes that may materially improve the quality and competitiveness of ACM and these Chinese military companies," the senators wrote. "Intel’s actions risk providing an avenue to overcome U.S. national security restrictions on these companies, granting them access to proprietary process insights that could be repurposed to advance China’s domestic semiconductor industry.”
The Senators noted that Intel's relationship with ACM "is also concerning given enormous taxpayer investment in Intel," alluding to the government's 10% stake in the company.
“This raises important questions about Intel’s fiduciary responsibility and approach to safeguarding the public interest, including how the company benefits American economic interests and taxpayers,” they continued.
“Intel’s entanglements with blacklisted Chinese companies calls into question whether taxpayer dollars are subsidizing activities that could directly threaten U.S. national security and leadership in semiconductor manufacturing.”
The Senators have asked Intel to submit detailed information about its testing of ACM equipment, including what due diligence was conducted and what safeguards were put in place to protect sensitive information.
Sophie Won Metzger, an Intel spokeswoman, said in a statement that all "Intel activities fully comply with applicable U.S. laws and regulations, and we engage regularly with the U.S. government on security matters."
She added that Intel’s systems are set up to “limit the information any individual tool can receive during the manufacturing process.”