Former President Donald Trump is calling for the immediate resignation of Intel’s new chief executive, Lip-Bu Tan, alleging that the chip veteran is “highly conflicted.”

Trump made the demand on his Truth Social network on Thursday with the post, “The CEO of INTEL is highly CONFLICTED and must resign, immediately. There is no other solution to this problem.” The ex-president’s terse statement did not elaborate on the basis for Tan’s alleged conflicts.

Republican Senator Tom Cotton on Tuesday had written to Intel board chair Frank Yeary to express “concern about the security and integrity of Intel’s operations,” given Tan’s “extensive business and investment relationships in China.” The senator from Arkansas, who sits on the Senate Intelligence Committee, singled out Tan’s history of “significant investments in Chinese technology companies,” and said those ties were “misaligned with Intel’s position as America’s most important advanced chipmaker.”

Tan is a Silicon Valley veteran with a long history in semiconductor technology and venture capital. Over his career, Tan’s San Francisco-headquartered investment firm, together with another company of his based in Hong Kong, has led multiple investments in China-based technology companies. In the past, he has also invested in Semiconductor Manufacturing International Corp (SMIC), the largest Chinese semiconductor company.

Tan is also coming under increased scrutiny for his past role as CEO of Cadence Design Systems, another U.S.-based chip design software company. Cadence admitted last week that it violated U.S. export controls by selling its chip design software to a Chinese university with ties to the Chinese military. The latest controversy has sharpened the focus on Tan’s own personal and business connections, particularly to Chinese companies and investment opportunities.

Intel has not responded to a request for comment on Trump’s statement, and neither has the White House. The company’s shares dropped by 3 percent in pre-market trading on Thursday in New York after the post was published.

Intel’s CEO change

Tan assumed the Intel CEO role in March after the company’s board ousted his predecessor, Pat Gelsinger, in December. The leadership change has added to a challenging time for the Silicon Valley stalwart, which is grappling with market shifts as well as intense competition from Taiwan Semiconductor Manufacturing Company (TSMC).

Intel is one of the world’s largest semiconductor companies by revenue and the only U.S.-headquartered company still with the capacity to manufacture advanced chips. But while Intel is well positioned for any near-term geopolitical shifts that may further squeeze international supply chains, the company has, for the most part, missed the boom in artificial intelligence chips that is the latest front of the global chip wars.

Intel has also been on the receiving end of billions of dollars of government subsidies and loans in recent years as part of a wider push by the Biden administration to resuscitate America’s domestic chip industry. Washington is keen to reduce U.S. reliance on overseas chipmakers like TSMC in Taiwan and Samsung in South Korea, and the federal funding has provided Intel with significant ammunition to fight back. However, Intel is far behind TSMC and others in the development of the most advanced manufacturing technology, and pressure is on Tan to deliver.

Tan’s Warning on Intel’s chip technology

In a warning last month, Tan said that if Intel fails to secure a “significant external customer” for its next-generation manufacturing technology by the end of 2023, the company would “evaluate whether to stop its development.” If Intel decided to abandon next-generation chip development, the company would essentially give TSMC a monopoly on the leading edge of chipmaking, which would have ramifications not only for Intel’s business but for U.S. national security as well.

Tan has also announced a series of cost-cutting measures in an effort to turn around Intel’s financials and regain profitability. However, the moves have unsettled some investors and increased uncertainty about Intel’s long-term strategy.

Senator Cotton’s letter made similar points, saying that as a major recipient of U.S. taxpayer-funded subsidies and loans, Intel had “responsibilities to maintain national security” in its business operations. “Intel is required to be a responsible steward of American taxpayer dollars and to comply with applicable security regulations,” Cotton wrote. “Mr Tan’s associations raise questions about Intel’s ability to fulfill these obligations.”

Intel’s conundrum

Intel now finds itself in a dilemma. Tan’s experience and contacts in Asia might have been an asset in what is a highly internationalized semiconductor industry. However, Tan’s past investments in Chinese companies and Cadence’s recent violation of U.S. export controls are ammunition for those who view him as a liability for the U.S. in an increasingly geopolitically charged competition with China in technology and trade.

For Trump, who has made technology and trade relations with China a central theme of his post-presidential political narrative, Tan’s appointment is unacceptable. His call for Tan’s resignation marks the risk of Intel’s internal turmoil becoming further politicized at a time when the U.S. is stepping up its moves to curb China’s semiconductor ambitions.

Intel’s stock price is down, and the pressure is on. And whether or not Tan can survive the latest controversy, the next few years will be make-or-break for Intel and its efforts to reclaim U.S. technology leadership in the global chip industry as well as in the nascent race for artificial intelligence hardware.