US President Donald Trump has demanded the immediate resignation of new Intel CEO Lip-Bu Tan, calling him "highly conflicted" due to his ties to Chinese firms and raising questions about plans to turn around the struggling American chip icon.

Reuters reported exclusively in April that Tan – himself or through venture funds he has founded or operates – invested at least $200 million in hundreds of Chinese advanced manufacturing and chip firms, some of which are linked to the Chinese military.

Trump's comments came a day after Reuters was first to report that Republican Senator Tom Cotton had sent a letter to Intel's board chair with questions about Tan's ties to Chinese firms and a recent criminal case involving his former firm Cadence Design.

"There is no other solution to this problem," Trump said in a post on his Truth Social platform, knocking shares of Intel down around 2 per cent in early US trading.

A change in leadership at Intel could pile pressure on the company, which is also a pillar of US efforts to boost domestic chipmaking. Last year it secured $8 billion in subsidies, the largest outlay under the 2022 CHIPS and Science Act, to build new fabs in Ohio and other states.

Analysts debated whether Trump should be making calls on corporate leadership.

Phil Blancato, CEO of Ladenburg Thalmann Asset Management, which does not own Intel shares, said:

"It would be setting a very unfortunate precedent. You don't want American presidents dictating who runs companies, but certainly his opinion has merit and weight."

David Wagner, head of equity and portfolio manager at Intel shareholder Aptus Capital Advisors, responded that while "many investors likely believe that President Trump has his hand in too many cookie jars, it's just another signal that he's very serious about trying to bring business back to the US."

Intel and Tan, who took over as CEO in March, did not immediately respond to requests for comment. An Intel spokesperson said in a statement this week that "Intel and Tan are deeply committed to the national security of the US and the integrity of our role in the US defence ecosystem."

Reuters in April reported that Tan between March 2012 and December 2024 invested in Chinese firms, including in contractors and suppliers for the People's Liberation Army, according to a review of Chinese corporate databases cross-referenced with US and analyst lists of companies with connections to the Chinese military.

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Reuters identified 20 investment funds and companies where his venture capital firm Walden is currently a joint owner along with Chinese government funds or state-owned enterprises, according to Chinese corporate records. The government funds are mostly from municipal governments of Chinese tech hubs like Hangzhou, Hefei, and Wuxi.

A source familiar with the matter had at the time told Reuters that Tan had divested his positions in entities in China, without providing further details. Chinese databases reviewed by Reuters at the time had listed many of his investments as current, and Reuters was at the time unable to establish the extent of his divestitures.

Tan, a Malaysian-born Chinese American business executive, was also the CEO of Cadence Design from 2008 through December 2021 during which the chip design software maker sold products to a Chinese military university believed to be involved in simulating nuclear explosions.

Cadence last month agreed to plead guilty and pay more than $140 million to resolve the US charges over the sales, a deal Reuters first reported.

Business turmoil

"This all boils down to Lip Bu's past involvement and investment in Chinese semiconductors, which is also what makes him so valuable as CEO," said Anshel Sag, principal analyst at Moor Insights & Strategy.

Once the dominant force in chip-making, Intel has in recent years lost its manufacturing edge to Taiwanese rival TSMC. It also has virtually no presence in the booming market for artificial intelligence chips dominated by Nvidia.

Its shares are little changed so far in 2025, after dropping more than 60 per cent last year. The company's market value has fallen below $100 billion, with profit margins – once the envy of the industry – running at about half their historical highs.

To revive Intel's fortunes, Tan has set a goal of slashing the chipmaker's workforce by around 22 per cent to 75,000 people by year-end. Intel has also warned of exiting chip manufacturing if it fails to secure a major customer, a potentially drastic move.

Tan's wide-ranging investments in China

The following are some key investments uncovered by Reuters and their connections to Chinese state entities:

Walden International 

Through Walden International, the San Francisco venture capital firm Tan founded in 1987,he became a seed investor in Semiconductor Manufacturing International Corp, China's largest chip foundry, in 2001, the year after it was founded, and served on the board until 2018.

In 2020, SMIC was placed under sanction by the US government for its close ties to the Chinese military, and Tan exited his SMIC investment in 2021, according to the US House Select Committee on the Chinese Communist Party. SMIC did not respond to a request for comment.

The firm remains invested in 20 funds and companies alongside Chinese government funds or state-owned enterprises, according to Chinese corporate databases, including tech hubs like Hangzhou, Hefei, and Wuxi.

Walden has also invested in six Chinese tech firms alongside leading PLA supplier China Electronics Corporation, which was sanctioned by President Trump in 2020 as part of an executive order that banned purchasing or investing in "Chinese military companies." CEC did not respond to a request for comment.

Those joint investments, detailed in Chinese government databases, include Shanghai-based QST Group whose sensors have been found in Russian military drones captured by Ukraine, according to a Ukrainian government database. QST Group did not respond to a request for comment.

Another joint investment with CEC is a 2 per cent stake in Intellifusion, a surveillance company that was placed on a US Department of Commerce trade blacklist in 2020 for alleged involvement in human rights abuses in the Xinjiang region.

Two Walden funds currently own over 5 per cent of Wuxi Xinxiang Information Technology Company Limited, a supplier of remote control equipment to leading Chinese memory chipmaker Yangtze Memory Technologies Co. Ltd, according to procurement data found in Chinese corporate databases.

The Commerce Department added YMTC to a trade blacklist in 2022 and the Pentagon added it to a list of "Chinese military companies operating in the United States" on January 31, 2024. Intellifusion, Wuxi Xinxiang and YMTC also didn't respond to comment requests.

Sakarya Limited 

Tan is listed as sole owner of Sakarya Limited, a Hong Kong-based holding company that invests in China, according to an earnings report from a Sakarya-backed chipmaker published on October 31.

Sakarya controls 38 Chinese firms including Huaxin Yuanchuang (Qingdao) Investment Management Co., Ltd., which is Walden's main investment entity in mainland China that ties Tan to over 500 Chinese companies, according to Chinese corporate databases.

Sakarya and Huaxin Yuanchuang did not respond to a request for comment and Walden declined to comment.

Seine Limited 

Tan holds stakes in 68 Chinese firms through Seine Limited, another Hong Kong-based entity controlled by Walden Technology Ventures III LP, according to Chinese corporate databases.

Seine holds a 3.1 per cent stake in Guangdong-based component maker Dapu Technologies, which the US House Select Committee on the Chinese Communist Party identified as a PLA contractor, and an 8.3 per cent stake in HAI Robotics, a firm the committee said has bid for a PLA contract and works with Chinese surveillance companies, according to filings. Seine Limited and Dapu did not respond to requests for comment.

Hai Robotics confirmed Seine's stake in the company and said it has never bid for any military contracts.

"All technology R&D and commercialization is centered on logistics technology innovation, focusing on civilian warehousing scenarios, and in strict compliance with the control laws and regulations of China, the US, and Europe," the company said in a statement.

Cadence Design Systems

Reuters exclusively reported on August 6 that US Republican Senator Tom Cotton questioned Tan's ties to Chinese firms and a recent criminal case involving his former company Cadence Design.

In a letter to Intel's board, Cotton specifically questioned whether the company was aware of subpoenas issued to Cadence during Tan’s leadership and whether Intel had taken steps to mitigate potential national security risks before appointing him.

Separately, Cadence had sold chip design products to a Chinese military university, according to the Reuters report. Last week, Cadence Design agreed to plead guilty and pay more than $140 million to resolve the charges.

Tan ran Cadence as CEO from 2008 through 2021 and was executive chairman until May 2023. The sales to Chinese entities occurred under his leadership at Cadence, which makes design software and other tools used to manufacture chips.