Intel stock falls after Donald Trump calls for CEO Lip-Bu Tan to resign over China ties

Intel CEO Lip-Bu Tan latest news: Intel’s stock took a hit on Thursday after US president Donald Trump publicly demanded that the company’s CEO, Lip-Bu Tan, step down immediately, as per a report.

Donald Trump Demands Immediate Resignation of Intel CEO

Trump wrote on his social media site, Truth Social, to highlight that Tan is “highly CONFLICTED” and that his resignation is the only solution to ongoing issues, according to a CNBC report. The US president said, "Intel Chief Executive Lip-Bu Tan is highly CONFLICTED and must resign, immediately. There is no other solution to this problem,” as quoted by CNBC.

Intel Stock Slide 5% in Premarket Trading

Following Trump's social media post, Intel shares dropped about 5% in premarket trading on Thursday, as reported by CNBC.

Intel CEO Lip-Bu Tan Took Over Amid Business Restructuring

Tan, who took over as CEO of Intel in March, has been leading the chipmaker through a challenging period, according to the report. The company has been working to bounce back from falling sales during the tenure of the previous CEO, Pat Gelsinger, as per the CNBC report. Despite the challenges, Intel had beaten earnings expectations in its second quarter report in July this year, according to the report.

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Concerns Mount Over Intel CEO’s Ties to China

Trump's call for Tan to resign comes after mounting concerns about the CEO’s ties to China, as per the CNBC report. Senator Tom Cotton, a Republican from Arkansas, recently questioned Tan’s connections to Chinese firms and referenced a previous criminal case involving Cadence Design, where Tan served as CEO until 2021, as reported by CNBC.

Senator Tom Cotton Raises National Security Questions

In a letter to Intel’s board chair, Cotton expressed worries about the security and integrity of Intel’s operations, and how Tan’s relationships might impact US national security, according to the report. Cotton emphasized that Intel must be a responsible guardian of American taxpayer dollars and comply with security regulations, as reported by CNBC.

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Cotton wrote to Intel’s chair, saying, “express concern about the security and integrity of Intel’s operations and its potential impact on U.S. national security,” adding, “Intel is required to be a responsible steward of American taxpayer dollars and to comply with applicable security regulations,” as quoted by CNBC. He also wrote that, “Mr. Tan’s associations raise questions about Intel’s ability to fulfill these obligations,” as quoted in the report.

Investments in Chinese Companies Spark Washington Backlash

Reports have highlighted Tan’s investments in several Chinese companies, some with military links, either directly or through venture funds, which has raised further concerns in Washington, according to the CNBC report.

Intel Cuts Foundry Spending as Part of Restructuring

Meanwhile, Intel is also reshaping parts of its business. Tan also recently announced cuts to Intel’s expensive foundry division, which makes chips for other companies but has been losing billions, with an operating loss of $3.17 billion, as per the CNBC report.

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Factory Plans Canceled or Delayed Globally

The firm also canceled plans for new chip factories in Germany and Poland and is consolidating some operations in Vietnam and Malaysia, according to the report. Construction on a chip plant in Ohio will also slow down, as per the CNBC report.

FAQs

Why did Intel stock drop?
Because President Trump publicly called for CEO Lip-Bu Tan’s resignation, raising investor concerns.

What did Trump say about Intel’s CEO?
He called Tan “highly CONFLICTED” and demanded he resign immediately via Truth Social.