AsianFin -- U.S. President Donald Trump on Thursday called for the immediate resignation of Intel’s newly appointed CEO Lip-Bu Tan, describing him as “highly conflicted” over investments in Chinese tech firms.

Tan, a prominent figure in the semiconductor industry, is reported by Reuters to have invested over $200 million in numerous Chinese advanced manufacturing and chip companies—some of which are allegedly tied to the Chinese military.

Trump’s statement came shortly after Republican Senator Tom Cotton sent a letter to Intel’s board chair raising concerns about Tan’s China connections and referencing a recent criminal case involving his former firm, Cadence Design.

"The CEO of INTEL is highly CONFLICTED and must resign, immediately. There is no other solution to this problem," Trump wrote on his Truth Social platform. His remarks triggered a nearly 3% drop in Intel’s stock (INTC.O) during late morning trading.

The controversy arrives at a sensitive time for Intel, which has positioned itself as a linchpin in the U.S. strategy to restore domestic chip production. The company secured $8 billion in federal subsidies last year—the largest allocation under the 2022 CHIPS Act—to fund new semiconductor facilities in Ohio and other states.

Trump’s public demand for a CEO’s ouster is a rare move from a U.S. president and has stirred debate among investors and business leaders.

Intel and Tan, who became CEO in March, have not made any response to Trump's social media post. Following a news report published Wednesday detailing U.S. lawmakers’ concerns over Tan’s business dealings in China, an Intel spokesperson stated that both the company and its CEO remain deeply committed to U.S. national security and their role in the country’s defense ecosystem.

Tan’s investments allegedly include firms that contract with the Chinese military. 

The analysis by Reuters identified 20 firms or funds in which Walden, Tan’s venture capital firm, is currently co-owned by Chinese government entities or state-backed enterprises. These investments often involved municipal funds from tech hubs like Hangzhou, Hefei, and Wuxi.

A source familiar with the matter previously told Reuters that Tan had divested his stakes in Chinese ventures, although no specifics were disclosed. 

Tan, a Malaysian-born Chinese American, previously served as CEO of Cadence Design Systems from 2008 to 2021. During that time, the firm reportedly sold software to a Chinese military university believed to be involved in nuclear simulation research.

Last month, Cadence agreed to plead guilty and pay more than $140 million to settle U.S. criminal charges related to those transactions.

"We don't believe Lip-Bu is 'conflicted,' though given the nature of this administration the China ties are seemingly creating an increasingly bad look," said Bernstein analyst Stacy Rasgon. "And unfortunately, unlike other tech CEOs Lip-Bu does not appear to have cultivated the kind of personal relationship with Trump that would help to assuage his ire."

A White House official weighed in, stating, "President Trump remains fully committed to safeguarding our country's national and economic security. This includes ensuring iconic American companies in cutting-edge sectors are led by men and women who Americans can trust."

Intel at a Crossroads

Once considered the crown jewel of Silicon Valley’s chip dominance, Intel has faced mounting struggles in recent years. It has lost manufacturing leadership to Taiwan’s TSMC and has virtually no stake in the rapidly growing AI chip sector, where Nvidia now dominates.

Intel has also been losing ground in its traditional strongholds—data centers and personal computing—to competitors like AMD. The company’s stock has remained flat in 2025 following a 60% plunge in 2024. Its market capitalization dipped below $100 billion, while Nvidia recently became the first $4 trillion company.

Intel’s profit margins have also plummeted to about half their historical highs. Late last year, the board ousted then-CEO Pat Gelsinger, cutting short his four-year roadmap aimed at regaining Intel’s competitive edge. 

In selecting Tan, the board aimed to bring in a leader with deep industry knowledge and a strong track record in tech investments. Since taking the reins, Tan has pivoted sharply away from Gelsinger’s strategy. He has slashed Intel’s workforce and paused construction of several planned manufacturing plants worldwide.

A key part of Intel’s turnaround plan—its next-gen chip production process—has hit roadblocks, with quality issues.

Meanwhile, Intel has further delayed construction on its Ohio facility, which is now expected to be completed around 2030 or 2031.

Ohio Senator Bernie Moreno criticized the company’s delays, writing on X, “It is pretty obvious that Intel failed its commitments to the state and that Ohio should start a fraud investigation.”