Intel’s shares fell on Thursday after President Donald Trump called for the company’s CEO to step down immediately.
In a post on his social media platform Truth Social, President Trump said Intel CEO Lip-Bu Tan was “highly conflicted.” This came as concerns were raised over his ties to Chinese companies, which created doubts over the future of the chip-making firm.
Investors did not respond well to the news
Following the calls for Tan’s immediate resignation, the company dropped in the premarket on the back of the post, last trading 5% lower.
Tan became Intel CEO in March as the company tried to turn around its fortunes from declining sales under the leadership of former CEO Pat Gelsinger.
This also comes a day after US Republican Senator Tom Cotton sent a letter to the company’s board chair questioning Tan’s ties to Chinese firms and expressing “concerns about the security and integrity of Intel’s operations and its potential impact on US national security.”
“Intel is required to be a responsible steward of American taxpayer dollars and to comply with applicable security regulations,” wrote Cotton.
“Mr. Tan’s associations raise questions about Intel’s ability to fulfill these obligations,” added Cotton.
The letter also made reference to a criminal case that involved Tan’s former firm, Cadence Design.
Now, in his post on Truth Social, the President indicated that the only way was for Tan to step down from his role as CEO at the US firm.
“The CEO of Intel is highly conflicted and must resign, immediately. There is no other solution to this problem.”
Trump.
Earlier this year, in April, Reuters reported that Tan invested funds in lots of Chinese companies, some of them linked to the Chinese military. It was reported that he made the investments directly or through venture funds he has founded or operates.
According to the report, Tan poured at least $200 million into hundreds of Chinese advanced manufacturing companies during the period between March 2012 and December 2024.
Intel is restructuring amid cost-cutting initiatives
Intel, which was once a dominant player in the chip-making business is in the middle of a strategy shift as part of efforts to revive the business after it was overtaken by Taiwanese rival TSMC in manufacturing.
Currently, the company is not active in the booming market for AI chips which is now dominated by Nvidia.
As part of the turnaround strategy, Tan has set a goal of cutting the company’s workforce to 75,000 people by the end of this year, a reduction of about 22%. Intel employed 109,800 people at the end of last year. Of these, 99,500 were “core employees”
In late June, the company closed its automotive chip-making business and indicated it would lay off 20% of Silicon factory workers.
The company has pledged to take a more “disciplined” approach to capital expenditure, particularly in chip manufacturing. Calls for Tans’ resignation have intensified following a leadership shakeup in the manufacturing division, where three top executives recently departed. Rivals Nvidia and AMD have outpaced Intel in both hardware and software, particularly in data centres and machine learning applications.
Nvidia currently dominates the AI chip market with over 80% share and posted $18.4 billion in data centre revenue in the third quarter of 2024 alone. AMD’s upcoming MI300 accelerator is expected to generate over $2 billion in sales this year.
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