Tan may now be forced to convince Trump that he is still the right leader to steer the storied American chipmaker’s revival—diverting attention from the cost-cutting measures he is working to implement.
“It’s a distraction,” said Ryuta Makino, an analyst at Intel investor Gabelli Funds, which holds over 200,000 Intel shares, according to LSEG data. “I think Trump will push Intel to spend more, but I don’t believe the company has the capacity to match the spending levels of Apple or Nvidia.”
Until recently, Intel had been among the largest beneficiaries of the 2022 CHIPS Act, with former CEO Pat Gelsinger outlining bold plans to build advanced chipmaking plants.
Tan, however, has scaled back those ambitions as the company’s efforts to compete with Taiwanese chipmaking giant TSMC’s contract manufacturing capabilities have fallen short. Last month, he announced plans to slow construction on new factories in Ohio and to build additional plants only when there is clear demand for Intel’s chips—a decision likely to further strain his relationship with Trump.
In a statement on Thursday, Intel said the company, its board, and Tan were making substantial investments in line with Trump’s “America First” agenda, but made no mention of his call for Tan’s resignation.
The statement was “bland,” said David Wagner, a portfolio manager at Intel shareholder Aptus Capital Advisors, which holds Intel shares through index funds.
“Either stand by your leader—which would mark the start of a difficult road ahead—or consider making a change,” Wagner said, warning that a drawn-out process over several months is something Intel cannot afford.
Late Thursday, Tan issued his own statement: “The United States has been my home for more than 40 years. I love this country and am profoundly grateful for the opportunities it has given me. I also love this company,” he said, adding that the board was “fully supportive of the work we are doing to transform our company.”
BUILT ON TRUST
A veteran of the chip industry, Tan took over at Intel roughly six months ago, after the board ousted former CEO Pat Gelsinger over years of strategic missteps and mounting losses. Intel’s shares are little changed this year, following a nearly two-thirds plunge in value last year.
Previously, Tan led chip-design software maker Cadence Design from 2008 until December 2021. Last month, Cadence agreed to plead guilty and pay over $140 million to settle charges related to selling products to a Chinese military university allegedly involved in simulating nuclear blasts—sales that took place under Tan’s leadership.
On Wednesday, Reuters reported that U.S. Republican Senator Tom Cotton had sent a letter to Intel’s board chair raising concerns about Tan’s ties to Chinese firms and the Cadence case.
“There has been a lot of misinformation about my past roles,” Tan said in his statement. “I have always acted within the highest legal and ethical standards. My reputation has been built on trust.”
It is not illegal for U.S. citizens to hold stakes in Chinese companies unless they are listed on the U.S. Treasury’s Chinese Military-Industrial Complex Companies List, which explicitly bans such investments. Reuters found in April no evidence that Tan at the time directly held shares in any company on that list.
However, Trump’s comments have brought heightened attention to an issue that could undermine investor confidence. “If you add another layer of government scrutiny, with everyone examining how the company operates, it just makes things harder,” said a former senior Intel executive familiar with the firm’s strategy under Gelsinger.
The source—who requested anonymity and was laid off during Gelsinger’s workforce cuts last year—said Tan’s strategy is to “shed all non-productive parts of the business and concentrate on a few core products.” They added: “If Tan leaves, it will only delay the urgent changes Intel needs to make.”
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