Intel is facing mounting political pressure as both US President Donald Trump and Senator Tom Cotton scrutinize CEO Lip-Bu Tan's past investments in Chinese semiconductor firms and his tenure at Cadence Design Systems, which admitted to illegally exporting US-controlled technology to a Chinese military university.
In a letter to Intel Chairman Frank Yeary, Cotton referenced reports stating that Tan "controls dozens of Chinese companies and has a stake in hundreds of Chinese advanced-manufacturing and chip firms," with at least eight "reportedly tied to the Chinese People's Liberation Army."
Tan previously served as CEO of Cadence Design Systems, which in July admitted to illegally exporting US-controlled technologies to a Chinese military university and transferring technology to a related chipmaker without licenses. Cotton stated, "These illegal activities occurred under Mr. Tan's tenure."
Intel has received nearly US$8 billion in federal funding under the CHIPS and Science Act — the largest grant awarded to a single company — including support for military-related facilities under the Biden administration's Secure Enclave program to protect the US defense microelectronics supply chain.
"Intel is required to be a responsible steward of American taxpayer dollars and to comply with applicable security regulations," Cotton wrote. "Mr. Tan's associations raise questions about Intel's ability to fulfill these obligations."
Cotton also demanded clarity on several points, asking:
● Whether the Intel board was aware of Cadence's federal subpoenas prior to Tan's appointment,
● Whether Tan was required to divest from companies tied to the Chinese Communist Party or the PLA, and
● Whether Tan has disclosed all remaining ties to Chinese entities to the US government, particularly given Intel's Secure Enclave contracts.
According to Reuters, Tan — either personally or via his venture capital fund — invested at least US$200 million in hundreds of Chinese firms between 2012 and 2024. While sources said he later divested, Chinese filings reviewed by Reuters indicated many investments were still active, leaving the scale of divestment uncertain.
Intel issued a brief statement in response: "Intel and Mr. Tan remain firmly committed to US national security and to upholding the integrity of the US defense ecosystem."
Credit: Donald Trump
Trump escalates pressure, urges Tan to step down
The controversy escalated after President Donald Trump demanded the immediate resignation of Intel CEO Lip-Bu Tan, alleging conflicts of interest. "The CEO of INTEL is highly CONFLICTED and must resign, immediately," Trump wrote on Truth Social. "There is no other solution to this problem."
Although Trump offered no additional context, the post closely followed Cotton's inquiry into Tan's background and revived scrutiny over his tenure at Cadence, which pleaded guilty to US export control violations tied to China's National University of Defense Technology, according to Bloomberg, The Straits Times, and Forbes.
On August 8, Intel issued a statement reiterating its commitment to US national and economic priorities: "Intel and Mr. Tan are deeply committed to advancing US national and economic security interests and are making significant investments aligned with the President's America First agenda." The company highlighted its 56-year domestic manufacturing presence and pointed to ongoing multibillion-dollar investments in R&D and chip fabrication, including a next-gen fab in Arizona.
Tan's leadership has sparked internal tensions at Intel. The Wall Street Journal reported that some board members oppose his strategy to retain the company's integrated structure and pursue AI acquisitions. On August 8, Intel shares fell 3.1% to US$19.77, erasing earlier gains made in 2025.
Tan, 65, was appointed CEO in March following the board's loss of confidence in former chief Pat Gelsinger amid stalled progress in the foundry business. A seasoned technologist and VC, Tan pledged to streamline operations, divest non-core assets, and refocus Intel's roadmap to better compete with TSMC and Nvidia, whose market caps now stand at US$4.4 trillion and US$87 billion, respectively.
Analysts caution that Trump's public rebuke could destabilize Intel's already tenuous recovery. "This adds political fire to an already fragile turnaround," said Bloomberg Intelligence's Oscar Hernandez Tejada. "Calls for his resignation introduce a layer of uncertainty that could complicate execution."
Tan's China-linked investments have long drawn congressional scrutiny. In 2023, the House Select Committee on the Chinese Communist Party requested details about his venture capital firm Walden International and its Chinese portfolio.
Most recently, Senator Bernie Moreno — an Ohio Republican aligned with Trump — also called for Tan's ouster, citing unfulfilled investment pledges related to Intel's delayed Ohio fab and alleged "conflicted ties" to the Chinese Communist Party.
Intel's revised capital strategy has cast doubt on future CHIPS Act disbursements. The company has delayed its multibillion-dollar Ohio fab until the 2030s, putting it at odds with the Trump administration's push to scale up domestic chipmaking. Wolfe Research analyst Chris Caso warned that Intel's pullback could weaken its alignment with national industrial goals.
While Intel navigates political and strategic uncertainty, global competitors are ramping up their US investments. TSMC has pledged US$165 billion in total US commitments, and Samsung Electronics is similarly scaling its American fabrication footprint — both aiming to capture a larger share of CHIPS Act incentives.
Mounting political pressure and internal discord are forcing Intel's board to reexamine Tan's future. "Lip-Bu was hired for his expertise and industry ties. But with Trump's crosshairs on his back, the real question is whether staying on truly serves Intel's best interests," said Bernstein analyst Stacy Rasgon.
Intel's commitment to advancing US national and economic security
Intel statement, August 7, 2025
"Intel, the Board of Directors, and Lip-Bu Tan are deeply committed to advancing US national and economic security interests and are making significant investments aligned with the President's America First agenda. Intel has been manufacturing in America for 56 years. We are continuing to invest billions of dollars in domestic semiconductor R&D and manufacturing, including our new fab in Arizona that will run the most advanced manufacturing process technology in the country, and are the only company investing in leading logic process node development in the US. We look forward to our continued engagement with the Administration."
Article edited by Joseph Chen
