Intel’s Board of Directors and CEO find themselves in crisis mode yet again this weekend in the wake of the shocking intervention by President Trump, declaring publicly that Lip Bu Tan should immediately resign his position:
This post from the president likely stems from a letter sent by US Senator Tom Cotton to Frank Yeary, Intel’s board Chairman on August 5 last, details here:
The letter outlines two main concerns. The first relates to his former role as CEO of Cadence. Last week, Cadence pleaded guilty to charges of selling its software to a Chinese company allegedly with military ties and without proper licenses, details here.
These events took place under Mr. Tan’s watch as CEO of Cadence and this is the senator’s first concern.
The second issue concerns Mr. Tan’s many investments in Chinese companies through his investment firm, Walden International, among others. It’s unclear to what extent he still remains invested in those companies, something the Senator is seeking answers to. This Reuters report does a deep dive into those investments. It would appear that they are many, and include two Hong Kong listed entities primarily focused on investments in China.
Both Intel and Mr. Tan have since issued statements on the matter. In the case of the former, it can be found here, and states the following:
Intel, the Board of Directors, and Lip-Bu Tan are deeply committed to advancing U.S. national and economic security interests and are making significant investments aligned with the President's America First agenda. Intel has been manufacturing in America for 56 years. We are continuing to invest billions of dollars in domestic semiconductor R&D and manufacturing, including our new fab in Arizona that will run the most advanced manufacturing process technology in the country, and are the only company investing in leading logic process node development in the U.S. We look forward to our continued engagement with the Administration.
Mr. Tan’s statement is much longer and can be found here.
After reiterating his commitment to Intel, and to the US, he hits out at what he calls “misinformation” and robustly defends his legal and ethical standards
There has been a lot of misinformation circulating about my past roles at Walden International and Cadence Design 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. 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.
The phrasing in the opening sentence is unfortunate. Yes his role at Cadence in the past, but his role at Walden International is not in the past; he is still its Chairman.
It’s also unclear here what he considers misinformation. For example, the facts of the Cadence guilty plea are pretty clear as outlined in the Department of Justice report linked earlier, and he was the CEO when all this occurred. Equally, with regard to his prior investments, these are mostly a matter of public record, as the Reuters report details. What may be construed as misinformation is President Trump’s claim that he is “highly CONFLICTED”, but then the President is wont to make unusual statements, indeed it could be viewed as his trademark.
He then goes on to outline his plan to engage with the Administration and make sure that they have all the facts, wisely choosing to praise the President’s leadership while so doing:
We are engaging with the Administration to address the matters that have been raised and ensure they have the facts. I fully share the President’s commitment to advancing U.S. national and economic security, I appreciate his leadership to advance these priorities, and I’m proud to lead a company that is so central to these goals.
As to why President Trump would choose to intervene in this manner, apart from the obvious of course, it could be down to the simple fact that Intel is in the process of laying off some 25,000 employees across the United States, and drastically slowing the build out of its flagship fab of the future in Ohio. That’s pretty much the exact opposite of what the US Administration wants to see happening, particularly in view of the billions in CHIPs Act funding bestowed on the company by the previous Administration. Just my two cents…
So what’s going on here? Does Senator Cotton’s letter to Intel’s Chairman have questions of merit? Is Mr. Tan “CONFLICTED” in his role? Should he resign? Let’s dig in…
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