Trump Met With Intel CEO, Says Tan Will Bring ‘Suggestions’ Next Week

Intel CEO Lip-Bu Tan was appointed in March to turn the chip company around. (Intel Corporation)

After meeting with Intel CEO Lip-Bu Tan Monday, President Donald Trump struck a more conciliatory tone than he had last week when he called for Tan’s resignation.

“The meeting was a very interesting one,” Trump posted to Truth Social. “His success and rise is an amazing story. Mr. Tan and my Cabinet members are going to spend time together, and bring suggestions to me during the next week.”

There was a lot riding on the encounter. Trump had called for Tan to resign in a post last Thursday, saying the Intel CEO was “highly conflicted,” following a letter sent by Republican Sen. Tom Cotton questioning Tan’s links to Chinese firms.

“Mr. Tan had the honor of meeting with President Trump for a candid and constructive discussion on Intel’s commitment to strengthening U.S. technology and manufacturing leadership,” an Intel spokesperson said in an emailed statement late on Monday.

“We appreciate the President’s strong leadership to advance these critical priorities and look forward to working closely with him and his Administration as we restore this great American company,” they added.

Intel has lost out in advanced chip manufacturing for external clients to Taiwan Semiconductor Manufacturing, or TSMC. In its recent earnings Intel signaled it wasn’t on track to win any major external business for its 18A manufacturing process any time soon, and warned it might “pause or discontinue” its next-generation 14A process if it can’t win a significant customer.

If Intel does scrap the 14A process, it would likely represent the end of any hopes of an American company being able to compete in advanced chip manufacturing with TSMC and South Korea’s Samsung Electronics. Taiwan’s TSMC would become the de facto dominant U.S. chip manufacturer as it pours $165 billion into its Arizona plants.

In such a scenario, Intel would be a much-diminished company, left with a chip-design arm that has missed out on the artificial-intelligence boom led by Nvidia and struggling to defend its PC and server market share from Advanced Micro Devices and Arm Holdings.

On the other hand, if Tan can convince Trump the U.S. needs Intel as a domestic chip manufacturing champion, he’ll have an influential ally and argument to use with potential customers. The president has shown himself to be unusually willing to personally direct major companies such as Apple where they should invest.

Even if Trump can’t explicitly send customers Intel’s way, a White House endorsement would go a long way toward reassuring the market about the future of projects such as its $28 billion Ohio semiconductor project, which is heavily dependent on government funding.

Arguably it wouldn’t take much to boost Intel stock, with Wall Street nearly at peak pessimism—just two analysts have a Buy rating, according to FactSet. Intel’s chip-manufacturing business is currently booking billions of dollars worth of annual losses but the company expects it to reach break-even by 2027, based on hopes of 18A and 14A adoption.

As Barron’s has previously noted, the company trades close to its tangible book value—the same as would be expected in a liquidation scenario—due to its valuable semiconductor plants, although it looks more expensive on a price-to-earnings basis.

Intel stock closed up 2.3% Monday at $20.65. Shares are up 2.5% in after-hours trading.

Write to Adam Clark at adam.clark@barrons.com and Anita Hamilton at anita.hamilton@barrons.com