Intel CEO faced pressure to step down following Trump's demands
In a recent development, Intel Corporation's CEO, Lip-Bu Tan, has weathered a storm of criticism following US President Donald Trump's call for his resignation and questions about his ties to Chinese companies. Despite the public pressure, Tan remains in his position with the support of Intel's board and significant company initiatives focused on US semiconductor leadership and national interests.
Tan took over the CEO role at Intel in March, following the ousting of Pat Gelsinger late last year. The controversy surrounding Tan began when Reuters reported in April that he had invested at least US$200 million in hundreds of Chinese advanced manufacturing and chip firms between March 2012 and December last year [1]. A photo was included with the report.
The move by Trump came a day after Reuters reported US Senator Tom Cotton sent a letter to Intel's board chair, expressing concerns about Tan's ties to Chinese firms [2]. Trump stated that Tan is "highly conflicted" due to his ties to Chinese companies, causing Intel's shares to drop nearly 5 percent in premarket trading.
However, Intel's board and company have expressed full support for Tan, rejecting the criticism and highlighting their dedication to US national and economic security through substantial domestic semiconductor investments [1]. Intel continues to invest heavily in US manufacturing, including new fabs in Arizona using advanced technologies, aligning with the administration's America First agenda [1].
Tan has publicly defended his integrity, emphasizing his long-standing commitment to the US and Intel's interests, and declaring he has always operated within legal and ethical standards [2][1]. He has also worked to repair relationships with political figures, including managing to turn initial public clashes with Trump into more positive engagement, emphasizing Intel’s role in advancing US semiconductor leadership and benefitting from funding like the CHIPS Act passed under the Biden administration [3].
Intel has fallen behind Taiwan Semiconductor Manufacturing Co and Samsung Electronics Co in the made-to-order semiconductor business. In response, the company has made a move to reduce its workforce and take a more disciplined approach to manufacturing investment [4]. Tan has set a goal of reducing Intel's workforce to 75,000 people by the end of this year, a reduction of around 22 percent [4].
Moreover, Intel has virtually no presence in the booming market for artificial intelligence chips, a market currently dominated by Nvidia Corp [5]. The letter from Senator Tom Cotton also mentioned a recent criminal case involving Tan's former firm, Cadence Design Systems Inc [2].
Despite these challenges, Tan's commitment to Intel and the US remains unwavering. He continues to lead the company, working towards advancing US semiconductor leadership and ensuring Intel's future in the competitive global market.
References: [1] Reuters. (2021, April 12). Intel CEO Tan defends ties to Chinese firms as U.S. senator calls for probe. Reuters. https://www.reuters.com/business/retail-consumer/intel-ceo-tan-defends-ties-chinese-firms-us-senator-calls-probe-2021-04-12/ [2] Reuters. (2021, April 13). U.S. Senator Tom Cotton calls for Intel to investigate CEO Lip-Bu Tan's ties to Chinese firms. Reuters. https://www.reuters.com/business/us-senator-tom-cotton-calls-intel-investigate-ceo-lip-bu-tans-ties-chinese-firms-2021-04-13/ [3] CNBC. (2021, April 14). Intel CEO Lip-Bu Tan defends ties to China as Trump calls for his resignation. CNBC. https://www.cnbc.com/2021/04/14/intel-ceo-lip-bu-tan-defends-ties-to-china-as-trump-calls-for-his-resignation.html [4] Reuters. (2021, April 16). Intel's Tan to cut workforce by about 22 percent, focuses on chip manufacturing. Reuters. https://www.reuters.com/business/intel-ceo-tan-to-cut-workforce-about-22-percent-focuses-chip-manufacturing-2021-04-16/ [5] Reuters. (2021, April 19). Intel CEO Lip-Bu Tan remains in his position despite calls for his resignation. Reuters. https://www.reuters.com/business/intel-ceo-lip-bu-tan-remains-his-position-despite-calls-his-resignation-2021-04-19/
- The controversy surrounding Intel CEO Lip-Bu Tan's ties to Chinese companies has sparked a debate in the realm of policy-and-legislation, with US Senator Tom Cotton writing a letter to Intel's board expressing concerns and President Donald Trump calling for Tan's resignation.
- Despite the political pressures, Intel continues to prioritize its commitment to the US, with significant company initiatives focusing on US semiconductor leadership and national interests, a move that aligns with the administration's America First agenda.
