After President Donald Trump publicly called for Intel CEO resignation, citing credible security risks to the US, Intel stocks took a hit. Trump pointed to Lip-Bu Tan's connections with Chinese semiconductor companies as the main reason for his demand.
Trump wrote in a Truth Social post, "Lip-Bu Tan, who is The Intel Chief Executive, is MORE than CONFLICTED and must resign at once." This step was preceded by increased pressure on politicians on the part of, in particular, Senator Tom Cotton, who drew attention to the fact that Tan had previously invested in Chinese tech companies, including Cadence Design Systems.
Senator Cotton addressed a formal letter to Intel's board chairman, weighing the company with Tan over ties to businesses that are considered to have breached US export controls. Cadence Design Systems under Tan had been found guilty and pleaded guilty to selling products to the National University of Defense Technology, a military-related institution in China.
Intel responded to the criticism by reaffirming its commitment to national security. The company, a major recipient of the Biden era Chips and Science Act, has received close to eight billion dollars in financing from the US government to pursue the internal production of its undertakings.
Such undertakings incorporate the facilities that assist US military operations. Intel's statement focused on reinforcing its commitment to national security and integrity in its service provision in the defense industry.
Intel still pays attention to its key position in the US semiconductor market, although the whole situation is somewhat controversial. The firm is still facing pressure to address the issues related to its previous relations and comply with the US security rules.
With tensions rising in the US-China trade relations amid Trump tariff repercussions, Taiwanese media suggested the US is compelling Taiwan Semiconductor Manufacturing Corporation (TSMC) to purchase a 49% equity stake in Intel and a subsequent investment of $400 billion in US facilities. Such a tentative agreement is associated with the talks over the possibility of lowering the import tariffs on Taiwanese chips and may redefine the global supply chains of semiconductors.
The proposed deal would strive to make the US more independent in the production of semiconductors. At the same time, Intel would be motivated to create a competitive advantage over TSMC and NVIDIA.
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