Intel’s embattled new chief Lip-Bu Tan is reportedly locked in a power struggle with members of the chipmaker’s board — a clash thrust into the spotlight after President Trump called for his removal.
The tensions, which have been simmering since Tan took the helm in March, center on whether Intel should remain in the costly business of manufacturing its own chips or exit the segment entirely, people familiar with the matter told the Wall Street Journal on Friday.
Tan has pushed to keep Intel’s foundry operations, arguing they are essential for American technology independence.
Some board members, led by chairman Frank Yeary, have pushed to spin off or sell the unit, which has been losing money despite accounting for about a third of Intel’s revenue last year, according to the Journal.
Yeary held talks with companies like Nvidia and Amazon about buying pieces of the business, according to the Journal. He is also reported to have explored selling the firm to Taiwanese chip giant TSMC, though that idea went nowhere.
The disagreement has stalled key initiatives, such as a planned multibillion-dollar fundraising effort to expand chip plants, which was delayed after Yeary and others urged moving at a slower pace.
Talks to acquire an artificial intelligence firm — viewed by Tan as critical to catching rivals like Nvidia and AMD — have also dragged, with another buyer now close to sealing the deal, according to the Journal.
Strategic partnerships have fallen through, and Tan has told associates he feels hamstrung in his efforts to turn Intel around, the Journal reported.
Intel’s difficulties come after years of sliding market value, driven in part by its failure to anticipate the rapid rise of AI. The company was awarded billions in funding last year from former President Joe Biden’s CHIPS Act.
Tan’s appointment initially sparked optimism, with shares jumping more than 13% on his first day. He had earned a reputation for reviving Cadence Design Systems, but his honeymoon with Intel’s leadership ended quickly.
The boardroom friction erupted into public view on Thursday when Trump posted on Truth Social that Tan was “highly conflicted” and should resign, declaring “there is no other solution to this problem.”
Trump’s comments appeared tied to Tan’s past leadership of Cadence and his venture-capital investments in Chinese companies with ties to the military. Cadence recently agreed to plead guilty and pay more than $140 million to settle federal charges that it sold chip-design tools to a Chinese military university.
The criticism followed a letter earlier this week from Sen. Tom Cotton (R-Ark.) to Yeary, questioning Tan’s links to Chinese firms. Sen. Bernie Moreno (R-Ohio), whose state is home to several planned Intel plants where construction has been delayed, joined in calling for Tan’s ouster on Thursday.
Intel defended its CEO, saying in a statement that the company, its board and Tan are “deeply committed to advancing US national and economic security interests” and making investments consistent with Trump’s “America First” agenda.
It added that leadership is united on strategy and engages in “thorough discussions and deliberations.”
The company has been tightening its belt, announcing last month a 15% workforce reduction and scrapping plans for new chip facilities in Europe.
It also slowed construction on a major Ohio project.
“There are no more blank checks,” Tan told employees in a recent memo.
“Every investment must make economic sense.”
Before Trump’s post on Truth Social, it had appeared that Tan had been making inroads with the new administration. He met in April with Commerce Secretary Howard Lutnick to outline his turnaround plans and spoke with him again by phone in recent weeks, sources told the Journal.
Lutnick indicated the administration would back Intel if it could land major customers such as Apple, a person familiar with the talks told the Journal.
Tan’s political position may be further complicated by the legacy of his predecessor, Pat Gelsinger, who built a relationship with Vice President JD Vance before stepping down.
Gelsinger left the company soon after Trump and Vance won the 2024 election — three months after Tan resigned from Intel’s board over disagreements with Gelsinger and other directors.
One former board member believes Gelsinger’s ties to Vance could have given Intel a valuable connection to the White House, the Journal reported.
For now, Intel says it plans to keep working with the administration.
But with political pressure mounting and internal disputes unresolved, Tan faces the challenge of convincing both Washington and his own board that he can steer the storied chipmaker back to stability.
The Post has sought comment from Intel, the White House, Vance, Gelsinger and the Commerce Department.
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