What happens if a US president tries to defeat the CEO of a publicly traded company?
In a bizarre case, we will find out that not only the career of a CEO, but also a unique company jewel of the American Enterprise, a global industry, and what a former trade secretary referred to as “the most important hardware in the 21”st Century.”
The drama began on the morning of August 7th as President Trump posted a short explanation In the truth, social: “The CEO of Intel is very conflict and has to step down immediately. There is no other solution for this problem. Thank you for your attention for this problem!” The post suddenly focused on a letter that Senator Tom Cotton (R.-Mark) had sent to the CEO of Intel two days earlier. It said Intel CEO LIP-TAN TAN “According to reports, she checks dozens of Chinese companies”, and a multinational company recently guilty of violating the US export controls “under Mr. Tan’s term of office”. At the end of the day, Tan had sent a letter to Intel employee in which she said: “There were many misinformation about my earlier roles. I have always operated within the highest legal and ethical standards. The share fell on an up day for the market by 5%, another blow for Intel shareholders who had hoped -finally -that things may have reached the ground.
How Intel lost its edge
It would have been a one -day story if it were not about Intel, once the largest and most advanced manufacturer of computer chips in the world.
The decline began about 20 years ago when the company made several acquisitions, many of which were in telecommunications and wireless technology. This made it very useful in the concept. However, the acquisition of companies is its own ability, and David Yoffie, a professor of Harvard Business School, who was in the Intel Board of Directors at the time Assets “100% of these acquisitions failed. We spent $ 12 billion, and the return was zero or negative.”
Intel also unsuccessfully tried to capture the Mammut Handy opportunity. The company understood the opportunity and provided chips for the very popular Blackberry phone. The chips were designed by arm, a British company that designs chips, but did not make them. Intel understandably preferred to make phone chips with its own architecture known as X86. In retrospect, the company decided not to make arm chips and create an X86 chip for mobile phones – in retrospect, “an important strategic mistake,” says Yoffie. “The plan was that we would have a competitive product within a year, and we had no competitive product within a decade,” he recalls. “It wasn’t that we missed it. It was that we screwed it up.”
Simple bad management crept in over the years. Intel was always missing new chip deadlines and lost market shares. The company gave up smartphone chips. The CEOs were replaced, but the production problems lasted for the first time in Intel’s existence, his chips were two generations behind competitors. These competitors were Taiwan’s TSMC and South Korea’s Samsung.
In crisis mode, Intel’s Board Pat Gelsinger, an engineer who had spent 30 years at Intel VMware. As CEO of Intel, he announced an extremely ambitious and expensive plan to regain the stature of the company as the world’s leading provider in the chip technology. In February of this year, when the share price fell, the board fired him and brought Tan in.
Despite everything, Intel is still crucial, since it is the only US company with technology and know-how to make leading chips in America-it has not been done for eight years. At the highest level of geopolitics, primacy in chips is of central importance for power, and in the past eight years the fastest and most valuable chips were only made in Taiwan and South Korea. Therefore the congress said goodbye Chips and Science Act With cross -party majorities. It became a law in 2022 and began last year from dollars of chip makers, American and foreign, built -up new factories and other chip infrastructure in the US Intel were assigned to most subsidies, about 8 billion US dollars plus loans, although the company has not received most of the money to achieve project milk.
It is like the money is a bit too late. “Intel had a great opportunity,” says Gauvar Guppa, analyst at the Gardener Research company. “You got all of these subsidies from the government. But I think they just couldn’t do it.” At this critical moment, the poor performance was expensive. “A year and a half ago there was still positive to Intel,” says Alvin Nguyen, analyst of the research company Forrester. “Well, not so much. The negativity she has hit is only snowball.”
Let us now assume that Tan should step down as CEO. “Who wants this job?” Asks Stacy Rasgon, a long -time tech analyst near Bernstein. In a recent note, he finds that Tan “does not” have to run “Intel” (he is very wealthy and has a lot of other things to keep his time). He clearly wants to do what is best for Intel … “, but it is unclear whether resignation would be good or bad for the company,” especially with Trump’s cross hair on his back. ” Rasgon, speaks with AssetsAsks: “How do you pull someone else to this place?”
It was not easy to become a tan. “The board took a while when the new CEO (former boss) left Pat Gelsinger,” says Guppa. “It took a long time for a candidate to be found who was ready to take control and lead the company in one direction.”
Nevertheless, Yoffie and three other former Intel directors argued in A opinion To Assets For a new company, a new board and a new CEO that overturned the Intel production arm into an independent company to ensure the dominance of the chipmaking of America.
Trump’s position is at the center of a decisive puzzle for national security. Global dominance requires a reliable source for leading chips. That is why trade minister Gina Raimondo said in 2024 that they were “the most important piece of hardware”. The world’s largest producer of leading chips in Taiwan’s TSMC builds two factories in Arizona, which have been subsidized by the Chips Act and are more planned. “You can submit the argument that the capacity in Arizona, maybe less, need Intel,” says Rasgon. But TSMC is not an American company, and Nguyen says: “The best technology from TSMC is definitely not coming to the USA at that time.”
That leaves Intel. “You are the only American company that can do,” says Rasgon. “But Intel still has to prove that they could deliver. They have not proven that.” Trump put the once Iikonic company into the spotlight. But identifying problems and solving them are two very different affairs.
