Intel CEO Lip-Bu Tan is under pressure as U.S. President Donald Trump calls for his resignation due to Chinese ties.
Challenges for Intel’s Turnaround
Intel’s CEO Lip-Bu Tan is already facing significant challenges in reviving the struggling chipmaker. Now, President Trump’s call for Tan to step down, citing his connections with Chinese firms, adds another layer of difficulty. According to two investors and a former senior employee, this demand could distract Tan from his primary task of restructuring the company.
Impact of Trump’s Demand
Trump’s statement on Thursday labeled Tan as “highly conflicted” because of his investments in Chinese companies, some linked to the military. This situation forces Tan to focus on convincing Trump of his suitability for the role, detracting from his cost-cutting plans.
Market Reactions and Comparisons
Analyst Ryuta Makino from Gabelli Funds, which holds over 200,000 Intel shares, commented on the distraction. He believes Trump might push Intel to increase spending, similar to Nvidia and Apple, who have pledged billions to boost domestic manufacturing.
Future Outlook for Intel
Intel had been a major beneficiary of the 2022 CHIPS Act, with former CEO Pat Gelsinger planning advanced factories. However, Tan has scaled back these ambitions, focusing on demand-driven factory construction, which may strain relations with Trump.
Intel’s board and Tan are committed to investments aligning with Trump’s America First agenda, though their statement on Thursday did not address Trump’s resignation demand.
Portfolio manager David Wagner of Aptus Capital Advisors, which holds Intel stock, emphasized the need for a decisive stance, either defending Tan or considering leadership changes. Tan, in a personal statement, expressed his commitment to the U.S. and Intel, highlighting his long-standing trust-based reputation.
