Intel CEO Lip-Bu Tan’s position in jeopardy — Spotlight shifts to Applied Materials’ Gary Dickerson

The U.S.–China semiconductor confrontation is entering a new phase where political scrutiny of corporate leaders is becoming as potent a force as export controls. Intel’s Chief Executive Officer Lip-Bu Tan faces a storm of political and investor pressure over his ties to Chinese companies.

Applied Materials’ CEO, Gary Dickerson, is increasingly in the crosshairs of a widening U.S. investigation into whether American semiconductor equipment has been illegally shipped to China’s leading chipmakers. These parallel developments underscore the fragility of U.S. corporate positioning in a market where national security concerns and commercial opportunity are colliding.

Intel’s leadership crisis
Donald Trump’s recent calls for Lip-Bu Tan’s resignation over his historical connections to Chinese companies have amplified an already difficult turnaround challenge for Intel. This political pressure is not isolated. U.S. Senator Tom Cotton has publicly questioned Tan’s ties to Chinese enterprises, while Senator Bernie Moreno, whose state of Ohio has seen Intel delay its major fab project, has joined the chorus for leadership change.

The timing could not be worse for Intel, which until recently was one of the most prominent beneficiaries of the CHIPS Act of 2022. Former CEO, Pat Gelsinger’s ambitious vision to rival Taiwan’s TSMC in foundry capacity has now been pared back, with Tan slowing construction in Ohio and conditioning future expansion on demonstrable demand for Intel chips.

Compounding the political challenges is Intel’s legacy association with Cadence Design Systems, where Tan once served as CEO. Just last week, Cadence agreed to plead guilty and pay more than $140 million to resolve U.S. Department of Justice charges that it sold chip designs to a Chinese military university.

This case has reinvigorated concerns about whether the current Intel leadership can effectively align with U.S. national security objectives. For Intel, the risk is that political distraction will pull resources and focus away from operational restructuring at precisely the moment when the company needs a clear, unencumbered path to restoring competitiveness.

In the early months of Tan’s tenure, internal fissures surfaced between him and Intel’s board leadership, particularly Chairman Frank Yeary. Yeary, a former investment banker acting as interim executive chair, reportedly proposed spinning off or selling Intel’s foundry business to firms such as Nvidia, Amazon, or even TSMC—moves Tan opposed on grounds that maintaining in-house manufacturing is vital for U.S. semiconductor sovereignty.

That foundational conflict, coupled with board resistance to Tan’s capital-raising plans—pushed back from mid-2025 into 2026—suggests the leadership challenge may be less about the CEO alone and more about the board’s strategic direction.

Hiring Tan, despite his baggage from Cadence, and then contesting his vision so soon after appointment, raises questions about whether it is Intel’s governance, rather than its leadership, that is the deeper source of instability.

Applied Materials in the crosshairs
While Intel’s challenges are political and reputational, Applied Materials faces an equally severe legal and regulatory gauntlet. Applied Materials disclosed in its February 27, 2024 10Q filing that it has received multiple subpoenas from U.S. government authorities seeking information pertaining to its China shipments.

According to a news article:

• The semiconductor firm received subpoenas from the U.S. Securities and Exchange Commission in February 2024. It also received a subpoena from the U.S. Attorney’s Office for the District of Massachusetts in the same month requesting information related to certain federal award applications.
• The recent subpoenas are in addition to ones received from the U.S. Attorney’s Office for the District of Massachusetts in August 2022 and February 2024, as well as from the U.S. Commerce Department’s Bureau of Industry and Security in November 2023.
• The U.S. has restricted shipments of advanced chips and chipmaking equipment to China for national security and a task force is in place to investigate and prosecute violations of export controls.

The significance of these allegations is amplified by Applied’s outsized role in the Chinese semiconductor equipment market. According to Table 1, Applied Materials is the single largest U.S. supplier of chipmaking equipment to China, with 2024 shipments totaling $7.215 billion.

This dominance means that any enforcement action could reverberate through both Applied’s financial performance and the broader supply chain dynamics between the U.S. and China, according to The Information Network’s report entitled “Global Semiconductor Equipment: Markets, Market Shares and Market Forecasts.”

SMIC’s resilience, despite sanctions
Since Applied Materials is accused of illegally shipping equipment to China’s Semiconductor Manufacturing International Corporation (SMIC), it is important for readers to see that this equipment played a leading role in enhancing SMIC’s technology and marketing prowess.

If the intent of U.S. export restrictions was to suppress China’s leading foundry, the most recent SMIC results suggest the policy has been less effective than intended. The company’s Q2 2025 performance exceeded revenue guidance, growing 16.2 percent year-on-year to $2.209 billion despite tighter controls on equipment imports. Capacity utilization improved to 92.5 percent, shipments grew sequentially, and demand across multiple end markets remained strong.

Equally significant is SMIC’s demonstrated ability to manufacture advanced logic at the 5nm node without access to extreme ultraviolet (EUV) lithography tools. By using multiple patterning techniques on deep ultraviolet (DUV) immersion lithography equipment—much of it reportedly supplied by global vendors before restrictions tightened—SMIC has managed to narrow the technological gap with leading-edge foundries.

While this approach is costlier and less efficient than EUV, it has proven sufficient for certain high-performance applications. We at The Information Network believe that SMIC is already producing 5nm-class chips for Huawei’s Ascend AI accelerators, Kirin-series smartphone processors, and specialized automotive SoCs.

Back in a May 18, 2022 Seeking Alpha article entitled “Applied Materials: SMIC Move To 7nm Node Capability Another Headwind,” we first revealed to readers and investor that SMIC was at 7nm. Now, three years later, 5nm has been achieved.

Given Applied Materials’ position as the largest single supplier of semiconductor equipment to China. It is likely that some of these capabilities have been enabled, directly or indirectly, by tools the company shipped to SMIC before or despite regulatory scrutiny.

SMIC’s ability to maintain high utilization and grow shipments despite ASP declines in certain segments indicates a strong demand base supported by domestic substitution, particularly in analog chips, RF components, and automotive electronics. With Q3 2025 guidance calling for further sequential growth in both shipments and average selling prices, SMIC appears positioned to sustain momentum even as visibility into Q4 declines...

-- Kristian Castellano, Director of Marketing, The Information Network, USA.