Lip-Bu Tan appointed as CEO of Intel has caused concern among U.S. lawmakers. According to ReutersUS Senator Tom Cotton sent a letter to Intel CEO Frank Yee asking him to explain whether the company had sufficiently thoroughly vetted Tan’s past business ties with Chinese technology firms, including those related to the Chinese military.
Intel is participating in the government’s Secure Enclave initiative, which aims to protect microelectronics critical to the U.S. defense industry. The company already has a contract worth about $3 billion with the Pentagon. So Cotton directly asked in his address whether Tan’s past investments do not jeopardize Intel’s ability to comply with the terms of these programs.
Earlier this year, Reuters reported published an investigationaccording to which Tang’s foundation — Walden International — has invested at least $200 million in more than 600 Chinese companies, some of which were linked to the People’s Liberation Army of China. These include SMIC and other entities with ties to state-owned defense corporations. Although Tang formally announced the sale of these assets, many companies are still listed as holdings in Chinese registers, raising questions about compliance.
Another reason for questioning is Tan’s past activities as the head of Cadence Design Systems, which he headed until 2023. Cadence recently pleaded guilty and agreed to pay more than $140 million in fines for supply of chip design software to a Chinese military university, which is involved in nuclear research. Senator Cotton specifically asked whether Intel’s board of directors was aware of the subpoenas received by Cadence under Tan’s leadership and what measures were taken to prevent the risks.
Intel responded by saying that both the company and its new CEO are “deeply committed to the national security of the United States” and will cooperate with the supervisory authorities.
This story is not just a political scandal. It touches on the foundation of Intel’s strategy. The company, which aims to become a leader in chip manufacturing and compete with giants such as TSMC, is seriously revising its technical direction: in particular, is considering the possibility of abandoning the 18A node in favor of 14A to attract customers such as Apple and NVIDIA.
Analysts acknowledge that Tan’s experience, including his role in shaping the Chinese semiconductor industry, could be valuable in helping Intel regain its footing. But that same experience raises serious questions about potential conflicts of interest — especially in connection with companies that are currently subject to export restrictions and sanctions. Under the leadership of a new CEO Intel lays off 24 thousand employees and cancels projects in several countries.
Also, the media reportthat Intel is studying the possibility of spinning off some of its production facilities into separate entities — amid the struggle for the attention of investors and competitors. And this is not even about reputation: a CEO’s ties to other countries can directly affect business decisions, government policy, and the trust of partners.
Intel has not been doing well lately. After quarterly losses the company is laying off more than 5.5 thousand employees in the United States. Due to numerous problems and poor financial performance Intel has received a BBB credit rating.
Source: tomshardware
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