At the top of the to-do list for many American business leaders is a simple priority: placate Donald Trump.
Anyone doubting the need to keep the CEO-in-Chief happy has just been served a stark reminder by Lip-Bu Tan, boss of chipmaker Intel. A week ago, Tan had the dubious distinction of being the most prominent American business executive whose head Trump has demanded on a plate.
The presidential call for his resignation appeared to stem not from Intel’s struggles and recent threat to abandon cutting-edge chip manufacturing, but from Tan’s former existence as a prolific start-up investor in Chinese semiconductor companies.
A hastily arranged meeting at the White House on Monday turned the tide. Trump declared Tan’s rise “an amazing story” and hinted mysteriously at “proposals” from the company that would soon follow. Days later, it emerged that the US has discussed taking a stake in Intel in return for investing in one of its manufacturing plants.
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If Tan has won over the deal-besotted president with a tempting transaction, it is a fitting sign of the times.
While the White House experiments with a new form of capitalism-by-fiat, extreme political volatility has descended on the US chip industry. For Tan, a widely-respected industry veteran who landed in the top job at Intel in March, the drama has complicated what was already one of the toughest turnaround jobs in the history of Silicon Valley.
“Semiconductor leaders have had to pivot from being an industry that was under-appreciated, not understood ... to now being in the bullseye,” says Jodi Shelton, chief executive of the Global Semiconductor Alliance, an industry group.
The political warning signs should have been obvious. Intel was the biggest beneficiary of the Biden administration’s move to pour $39bn into reviving chip manufacturing in the US. Trump has chafed at those grants, though he has so far stopped short of killing them outright.
Through Walden International, a US venture capital firm he started more than 40 years ago with just $3 million put up by family friends, Tan has played a significant role as a start-up investor in China’s tech industry – investing in China’s state-backed chip manufacturers SMIC and Biren Technology, as well as Sina, creator of Weibo, China’s answer to X.
Those deals made him a natural target for Washington’s China hawks. US senator Tom Cotton wrote to Intel’s chair last week asking if Tan had a “conflict of interest”.
Tan, who dismissed the queries as “misinformation”, appeared to lack the political antenna to recognise the seriousness of the threat. “It’s taken too long for him to get to Washington. He should have got there sooner,” says Daniel Newman, an analyst at The Futurum Group.
That marks Tan out from his predecessor. Pat Gelsinger, who was pushed out late last year after losing the confidence of his company’s board nearly four years into an attempted turnaround, worked Washington hard and positioned Intel as a national champion.
On Gelsinger’s watch (and with Tan on the board until last year) Intel made some headway. But it failed to meet his habitually upbeat predictions and was caught out by the surge in demand for Nvidia’s AI chips. “Intel are losing share in almost every category they’re in,” says Ben Bajarin, an analyst at Creative Strategies.
Tan (65) is willing to challenge orthodoxy inside one of Silicon Valley’s most hidebound cultures, bringing an investor’s eye to an engineer-led company. His arrival has been welcomed both in the chip industry and on Wall Street (Intel’s stock has risen by more than a fifth since his appointment), though he has taken on a position few envy.
“Intel is where good reputations go to die,” says Michael Marks, a veteran Silicon Valley executive who is partner in a venture capital firm with Tan.
Tan has taken a circuitous route to the top of the US corporate world. Born in Malaysia, he obtained a degree in quantum physics in Singapore before moving to the US to study nuclear engineering.
By his own account, he dropped out without completing his PhD at Massachusetts Institute of Technology after the Three Mile Island nuclear disaster and moved to Silicon Valley. He went on to build Walden, his VC firm, into a behemoth with $5 billion under management.
That was followed by a surprise move in 2009 to become the head of Cadence, which sells software used to design chips. The role cemented Tan’s relationships with many of the semiconductor industry’s leading figures.
In contrast to Gelsinger’s optimistic rhetoric, Tan has emphasised the deep problems besetting Intel. According to a former colleague at Cadence, he is “demanding but very fair, very clear”.
Despite taking early action to slim Intel down, the company’s finances are still under pressure. Nor has Tan ended uncertainty about its strategy. Last month, he threatened to drop its push into advanced manufacturing.
With the future of the last US-headquartered manufacturer of cutting-edge chips in doubt, suspicions in Washington about Tan’s role as longtime cheerleader for China’s semiconductor industry have been harder to quell.
Learning to play by the capital’s new rules is now paramount. The fate of a struggling Silicon Valley icon depends on it. – Copyright The Financial Times Limited 2025
