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Investing.com -- Intel (NASDAQ:INTC) CEO Lip-Bu Tan directly addressed President Donald Trump’s call on Thursday that he should resign immediately because of ties to China.
In a letter sent to Intel employees on August 7, Tan said the U.S has been his home for 40 years and he loves the country and the company. Tan said there has been a lot of misinformation circulating about his past roles at Walden International and Cadence Design (NASDAQ:CDNS) Systems.
“I want to be absolutely clear: Over 40+ years in the industry, I’ve built relationships around the world and across our diverse ecosystem – and I have always operated within the highest legal and ethical standards,” the CEO said. “My reputation has been built on trust – on doing what I say I’ll do, and doing it the right way. This is the same way I am leading Intel. “
Tan said the company is working with the Trump Administration to address concerns and provide accurate information, adding that he shares the President’s commitment to strengthening U.S. national and economic security.
The CEO added that the board is “fully supportive of the work we are doing to transform our company, innovate for our customers, and execute with discipline – and we are making progress.”
Trump, on Thursday, called the CEO “conflicted” and said he should immediately resign, sending the stock down more than 3%.
Tan is widely believed to be the most qualified person to turn Intel around, which has seen its market share erode to NVIDIA (NASDAQ:NVDA) and AMD (NASDAQ:AMD).
“The CEO of INTEL is highly CONFLICTED and must resign, immediately,” Trump posted on Truth Social. “There is no other solution to this problem. Thank you for your attention to this problem!”
Trump’s comments follow a recent letter from Sen. Tom Cotton, chairman of the Senate Select Committee on Intelligence, asking Intel’s board for information about Tan’s investments in Chinese semiconductor firms and entities linked to China’s military.
In a letter to Intel Chairman Frank Yeary, Mr. Cotton cited concerns over the executive’s prior tenure at Cadence Design Systems Inc., which in July pleaded guilty to violating U.S. export controls by selling hardware and software to China’s National University of Defense Technology.
The Arkansas Republican wrote that the CEO’s ties “raise questions about Intel’s ability to fulfill these obligations” as “a responsible steward of American taxpayer dollars” and to comply with U.S. security regulations.
Bernstein analyst Stacy Rasgon said while Tan’s China activity is “indeed substantial”, it is not a secret.
Rasgon, who is no fan of the stock, does not believe that Tan is “conflicted,” but understands that his China ties “are seemingly creating an increasingly bad look.” He believes that Tan may lack the personal relationship with Trump that other tech CEOs have garnered.
On why Trump is targeting Tan, who, by the way, is Malaysian (not a Chinese national), the analyst said that Trump is perhaps not happy with the recent talk of capex cuts and possible scrapping of leading-edge process efforts. “And of course, Trump likes winners; we suspect he does not find the failure that has permeated Intel in recent years all that attractive,” Rasgon added.
Rasgon said Tan, who took the role out of a passion for the company and a desire to reinvent the chipmaker, now faces the question of whether stepping down would be best for the company amid the political pressure from Trump. Mr. Tan’s deep industry expertise and connections were central to his appointment, Rasgon noted, and his departure could leave a leadership vacuum, raising uncertainty over potential successors and complicating Intel’s broader turnaround and talent recruitment efforts. However, the analyst added that “it seems unlikely to us that Trump’s opinion will change anytime soon.”