Unrestricted Warfare and America's Most Important Corporation

It's Looking Dangerous Out There

Welcome back, and thanks for reading! A few weeks ago, a reader interested in the stories on how the PRC decimated America’s orange industry and the PRC’s involvement in the fentanyl crisis reached out and suggested I take a look at the current CEO of Intel’s connections to the Chinese military. The CEO claims he did nothing wrong, and has not been charged. However it is a story that’s certainly worth understanding, and so for today’s article, I’ve put together a succinct summary of the problem. As always, please make sure to like this article by tapping the heart at the top of the page, as that is how Substack knows to promote it! Thanks again!

If there is one absolutely key ingredient to modern America, and indeed the entirety of the developed world, it is semiconductors. Were our access to them cut off, our economy would grind to a halt, our supply lines would fall into chaos, our military machine would be mostly inoperable, and next to nothing we use every day could be even repaired, much less built new.

We saw this in the aftermath of COVID: the semiconductors used for the computers in machinery like automobiles were in short supply, and so automaker production targets from roughly 2021 to 2023 were thrown into chaos. The automakers lost billions of dollars in revenue as cars sat in lots, finished but for the cheap chips that make them run.¹

And while automakers were the hardest hit, most other industries that rely upon access to consumer-grade semiconductor chips—household appliance makers, computer manufacturers, video game console companies, and 166 other industrial sectors—were significantly disrupted by a semiconductor chip shortage.² COVID and a drought in Taiwan (limiting the supply of clean water the semiconductor fabs use in bulk) brought most of the economy nearly to its knees by just pushing up the lead time on orders from about 2.2 to 12.2 weeks, and somewhat limiting the supply available. Even credit cards were difficult to make, as they too now have chips in them.

It turns out, when the whole world runs on small processors that are extremely difficult to make—requiring foundry plants that cost billions of dollars, are highly complex, rely on rare and expensive fabrication machines (hence why the production facilities are also called “fabs”),³ and use immense quantities of water that must be completely pure—even the slightest disruption to the process can cause major problems. Because the process is so complex and expensive, production cannot just be spun up. It takes years, if not decades, of investment.⁴

You might think that, given such a situation, America would take the issue seriously and protect domestic producers of chips from both subversion and being put out of business by foreign competition, or at least force that competition to produce chips here instead of somewhere in the line of fire if things devolve into war globally…such as Taiwan. Similarly, you’d think we would closely husband what foundry facilities we have while encouraging the rapid development of others, so as to lessen the risks from future supply shocks, supply chain disruptions, or droughts in a particular region.

Not so much. While the much-touted “CHIPS Act” passed under Biden was theoretically meant to encourage domestic production of chips, the DEI requirements killed it.⁵ It turns out, foisting requirements that companies hire “justice-involved individuals” (convicts), as the CHIPS Act did, just pushes them to invest in building their fabulously expensive facilities anywhere else. Such is what happened, with TSMC deciding to invest in Japan rather than Arizona after its first CHIPS Act project turned into such a disaster.⁶ So, despite being existentially important, American chip production has fallen from over a third to 12% of global production in the past three decades.⁷

More importantly, the one American company that still designs its own chips and produces them domestically on a large scale⁸—making it one of the most important companies in our nation—is run by a man with close connections to the Chinese military-industrial complex and its research arms, and whose last company was caught selling sensitive technology to a univsersity and company affiliated with the Chinese military.⁹

Listen to the audio version of this article here:

[AUDIO] Unrestricted Warfare and Intel Corporation

Intel and the Lip-Bu Tan Problem

Intel’s Importance

While America still manufactures semiconductors, that critical ingredient of the global economy, we are a net importer of them.¹⁰ Yet worse, the main countries from which we import them—Vietnam, Thailand, Malaysia, India, South Korea, Japan, Cambodia, and Taiwan—are countries at risk of attack or subversion from the CCP.

This is to say, if hostilities ever were to erupt between them and China and/or us and China, much of America’s semiconductor supply chain would be at risk. Or, were their governments to drift closer to China, our supply chains would be put at similar risk. Further, the most advanced chips—the ones produced in relatively small numbers and extremely difficult to make—are nearly entirely made in Taiwan, perhaps the likeliest target of Chinese aggression or subsumption¹¹; TSMC makes 90% of them.¹²

That is a glaring strategic vulnerability, as the most prominent and innovative American companies only design chips. The chips themselves are made in TSMC foundries reliant on access to Taiwan. For example, while the design work done by Nvidia, Qualcomm, AMD, and Apple is highly innovative, it is largely TSMC that makes those chips;¹³ the companies themselves are “fabless.” In fact, even the Nvidia chips made by TSMC in Arizona have to be shipped back to Taiwan to be finished before they can be used;¹⁴ in a crisis, they wouldn’t be useful or available.

So, only the companies that can make their own chips in America, whether those chips be consumer-grade or highly advanced (both types are needed in prodigious quantities),¹⁵ would be useful in a time of crisis and de-risk our rickety and all-important supply lines.

There are only a few companies that can do so. Texas Instruments, though now a global operation, still makes many of its chips in Texas and Utah,¹⁶ and plans to produce over 90% of its chips in America by 2030.¹⁷ Micron makes some of its advanced memory chips in America, and is investing more in American manufacturing, with the goal of making 60% of its chips in America in the next 20 years.¹⁸ However, only 10% of its chips are currently produced in America,¹⁹ and they are memory chips rather than processor chips. ON Semiconductor makes chips in Arizona, but it is relatively small compared to others in the industry,²⁰ and produces relatively few chips. Similarly, defense contractor Northrop Grumman makes semiconductors for military applications, but far from enough to be useful if our access to the world supply were cut off.²¹

That leaves Intel, a company that has been greatly mismanaged for many years,²² but is one of the most important companies in America. It’s a behemoth that does $53 billion in revenue a year,²³ produces about three-quarters of its chips in America, and is investing in a massive new plant in Ohio that will onshore even more of its production.

Such is why the Trump Administration is considering having the US government take a 10% stake in Intel,²⁴ as has been done with other critical companies, mainly in the rare earths sector.²⁵ Without Intel and its chip fabrication capabilities, America would be in a dire position.

Intel’s Unrestricted Warfare CEO

This is why the CEO of Intel has sparked so much concern. Appointed in March of this year, Intel’s CEO is a naturalized American named Lip-Bu Tan. He was born in Malaysia to an ethnically Chinese family. Before leading Intel, Tan was both in charge of a company that was caught selling American technological secrets to a Chinese military university and created a fund investing in numerous PLA-tied companies.

As a note: Tan has claimed he did nothing wrong, and always followed ethical guidelines.²⁶ Further, he was not charged in the Cadence scandal discussed below, though the company pleaded guilty. Still, what happened is worth understanding, as it has become a major political issue.²⁷

The Cadence Design Systems Scandal

Before he was in charge of America’s most important company, Tan was the CEO of another tech company, Cadence Design Systems. Cadence, which produces electronic design automation (EDA) tools that verify semiconductor performance and are thus critical for making high-tech, high-specification chips, recently pleaded guilty to illegally transferring its technology to both a semiconductor company in the PRC and a Chinese military university.

Specifically, Cadence pleaded guilty to selling, over the course of about half a decade, its highly advanced EDA tools to the National University of Defense Technology (NUDT), “a university in the People’s Republic of China (PRC) under the leadership of the PRC’s Central Military Commission.” NUDT was added to the U.S. Entity List in 2015 for “its use of U.S.-origin components to produce supercomputers believed to support nuclear explosive simulation and military simulation activities in the PRC,” and is closely connected to the Chinese military establishment.²⁸

Further, Cadence sold the technology to a related company called Phytium, transferring to it EDA tools that are critical for building high-tech semiconductors. Phytium is a PRC semiconductor company that is closely affiliated with NUDT, and thus the Chinese military establishment.²⁹

All of that happened while Tan was the CEO of Cadence.³⁰ So, while Tan was running the high-tech semiconductor machinery company, it transferred tools that are integral to the production of high-specification chips used in AI tools and military weapon systems, the very sort of chips America is attempting to keep out of China’s hands,³¹ to the Chinese military and a semiconductor manufacturer associated with the Chinese military.

Walden International

While that would be terrible enough on its own, it gets worse. Tan has also been a prolific investor in Chinese technology companies, including a number of companies closely affiliated with the People’s Liberation Army.

Specifically, Tan founded a San Francisco-based investment fund called Walden International in 1987.³² Ominously, the Chinese name for the fund, huádēng, translates roughly to “ascendant China.” And ascendant it has helped make China, as it has poured hundreds of millions of dollars into PRC companies that produce much-needed semiconductors and electronics, including for the PLA.

While Walden has invested in hundreds of businesses in China, having invested over $200 million in the country’s semiconductor and advanced technology firms, a few are particularly notable and concerning, particularly given the existing tie to the Chinese military establishment through the Cadence scandal.

First is one of the most concerning investments Walden made: Semiconductor Manufacturing International Corporation (SMIC). China's largest chip maker, SMIC is a close competitor of Intel³³ and one of the few Chinese chipmakers that can produce advanced chip designs. It is also closely tied to the PLA and has been caught in attempts to access advanced American semiconductor manufacturing technology through proxies and IP theft.³⁴ Walden International not only invested $52 million in SMIC, but also invested tens of millions of dollars in various SMIC affiliates, such as Advanced Micro-Fabrication Equipment; AMFE produces the equipment that is used in the semiconductor manufacturing process. Tan sat on the SMIC board for years, and reportedly held the investment until 2021.³⁵

Another PLA-connected company in which Walden was deeply connected is China Electronics Corporation (CEC). CEC is a leading PLA electronics supplier, and as a result, was sanctioned by the American government.³⁶ Alongside CEC, Walden invested in other Chinese military companies, including military drone sensor manufacturer QST Group and Intellifusion, a sanctioned company that focuses on surveillance.³⁷

Further, Walden is connected to a company called Yangtze Memory Technologies Co. through an investment in one of its suppliers, Wuxi Xinxiang Information Technology Company Limited. Yangtze was designated by the Pentagon as one of the "Chinese military companies operating in the United States.”³⁸

Additionally, through a Hong Kong-based entity that it controls, Walden invested in “Dapu Technologies, which the U.S. House Select Committee on the Chinese Communist Party identified as a PLA contractor, and an 8.3 per cent stake in HAI Robotics, a firm the committee said has bid for a PLA contract and works with Chinese surveillance companies.”³⁹

All in all, eight of Walden’s investments are particularly concerning because of close ties to the PLA,⁴⁰ and the high-tech electronics focus of many of the others makes them at least somewhat concerning.

In short, Walden is extremely plugged into the Chinese military ecosystem, particularly in the realm of advanced electronics and the semiconductors that make such electronics possible. While Tan claims to have divested from those investments, Reuters found that most of them are still listed as “current.”⁴¹

What Unrestricted Warfare Looks Like

So, in short, the man who currently runs one of the most important companies in America, particularly as regards our competition with Red China in the economic, artificial intelligence, and military spheres:

• Invested around $200 million in advancing Chinese semiconductor and advanced technology manufacturing, both of which are critical to the current struggle

• Was in charge of the American company that illegally sold sensitive, advanced technology that further helped Chinese semiconductor firms and military-controlled researchers get closer to catching up to us in the technological arms race

• Was deeply involved with SMIC, even serving on its board, as it stole IP from companies like TSMC⁴² and became one of the most important companies on the Chinese side of our technological competition

• Invested tens of millions of dollars more in advanced Chinese companies, some of which produce equipment for the PLA

• Slowed the pace of building the Ohio megaplant that would have reshored even more advanced chipmaking in America⁴³

All in all, Tan is, then, a man who either wittingly or unwittingly aided communist China in its rise to technological near-preeminence. Perhaps he did nothing intentionally wrong, as he and his legal team contend. But, regardless of what was intended, the “ascending China” translation of his firm’s name proved accurate. Further, it’s an example of how the PRC’s strategy of Unrestricted Warfare seems to play out in practice. As a reminder, Unrestricted Warfare is:⁴⁴

“the main blueprint for China’s efforts to unseat America as the world’s economy, political, and ideological leader… it shows exactly how a totalitarian nation set out to dominate the West through a comprehensive, long-term strategy that includes everything from corporate sabotage to cyberwarfare to dishonest diplomacy; from violations of international trade law and intellectual property law to calculated abuses of the global financial system….”

A strategy that involves getting American capitalists to fund malign Chinese companies that produce goods for the PLA or that aid the PLA⁴⁵ is exactly the sort of thing that helps to “unseat America” as the world’s economic, military, and technological leader, particularly over the long term.

And, of course, there’s the risk that Intel under Tan will turn into what Cadence under Tan—either wittingly or unwittingly—was; yet another pawn of the PRC.

That is an unacceptable risk, and likely the reason President Trump has called for Tan’s firing.⁴⁶ America must be able to produce cheap and trustworthy semiconductors on a large scale.

If they are too limited in number or expensive, the supply crunch for consumer goods will remain a problem. If they are suspected of PRC-connected unreliability, the sort of intentional issues that introduce risks of compromise, malfunction, or sabotage, they can’t be trusted by the military⁴⁷ (and probably shouldn’t be by the civilian sector).

The danger that Intel is already falling apart in dangerous and counterproductive ways under Tan, is increasing. Already, the massive Ohio project has been delayed.⁴⁸ Already, nearly a quarter of Intel’s workforce faces being cut despite America’s need for Intel to grow.⁴⁹

Most worrisome, already it appears that Intel could drop out of being a leading semiconductor designer and manufacturer. In its most recent 10Q filing, Intel stated:⁵⁰

"However, if we are unable to secure a significant external customer and meet important customer milestones for Intel 14A, we face the prospect that it will not be economical to develop and manufacture Intel 14A and successor leading-edge nodes on a go-forward basis. In such event, we may pause or discontinue our pursuit of Intel 14A and successor nodes and various of our manufacturing expansion projects.".

What that means, in practice, is that Intel would be giving up "the leading-edge semiconductor technology race for a major node, essentially leaving leading-edge process technologies to TSMC and possibly Samsung Foundry.”⁵¹ That, in turn, means America would no longer be a leading semiconductor design and manufacturing hub. TSMC would take the lead in that next-generation process, and America would be further at risk in any case of disruption, particularly war or a supply chain crunch.

Intel has been mismanaged for years, but it is still a vitally important company. America needs to be able to design and produce a vast quantity of semiconductors that are reliable and free of sabotage. Intel is, at least for now, the most important company for ensuring that is possible: it can design bleeding-edge chips, produce them and legacy ones in vast quantities, and has the capital to further expand research and production efforts on a grand scale. That capability must be kept intact, and not put at risk of Unrestricted Warfare-style subversion, whether it be witting or unwitting.

Featured image credit: Mister rf, CC BY-SA 4.0 <https://creativecommons.org/licenses/by-sa/4.0>, via Wikimedia Commons

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1. https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/coping-with-the-auto-semiconductor-shortage-strategies-for-success

2. Described here: https://en.wikipedia.org/wiki/2020%E2%80%932023_global_chip_shortage

3. Terminology and process discussed here: https://newsroom.lamresearch.com/difference-between-fab-vs-foundry?blog=true

4. Some of that discussed here: https://www.semiconductors.org/america-projected-to-triple-semiconductor-manufacturing-capacity-by-2032-the-largest-rate-of-growth-in-the-world/; and here: https://a2globalelectronics.com/shortage-mitigation/the-semiconductor-shortage-in-one-timeline/

5. This article describing the issues is fantastic: https://thehill.com/opinion/4517470-dei-killed-the-chips-act/

6. Noted here: https://finance.yahoo.com/news/tsmc-shifts-focus-japan-amid-152552116.html

7. https://www.z2data.com/insights/who-are-the-top-us-companies-in-the-semiconductor-industry

8. A good description of the company’s domestic manufacturing operations is available here: https://www.investopedia.com/articles/markets/100214/inside-intel-look-mega-chipmaker.asp

9. My friend Yuri has written about Unrestricted Warfare recently. Check his great summary and examples here:

How To Counter CCP Unrestricted Warfare

10. https://www.stlouisfed.org/on-the-economy/2022/dec/u-s-trade-of-semiconductors-cross-country-patterns-and-historical-dynamics; https://www.usimportdata.com/blogs/top-us-semiconductor-manufacturers-imports-by-country-2024-25

11. At the very least, the subversion and espionage problem in Taiwan is a major problem: https://jamestown.org/program/taiwan-exposes-more-prc-military-infiltration-cases/

Further, the PRC has vowed to “reunify” Taiwan at some point, making this a lurking threat: https://al24news.dz/en/china-vows-never-to-allow-separation-of-taiwan-after-trumps-remarks-on-xis-assurances/

12. https://www.hstoday.us/uncategorized/semiconductors-a-critical-infrastructure-vulnerability-in-americas-supply-chain/

13. Apple: https://www.cnbc.com/2023/12/01/how-apple-makes-its-own-chips-for-iphone-and-mac-edging-out-intel.html#:~:text=Apple%20first%20debuted%20homegrown%20semiconductors,course%2C%20is%20our%20silicon.%22; Nvidia: https://technologymagazine.com/articles/the-potential-of-tsmc-nvidias-ai-chip-production

14. https://technologymagazine.com/articles/the-potential-of-tsmc-nvidias-ai-chip-production

15. For example, the importance of “legacy” chips to the auto industry: https://www.csis.org/analysis/strategic-importance-legacy-chips

16. https://www.ti.com/about-ti/company/ti-at-a-glance/manufacturing.html

17. https://www.fox4news.com/news/texas-instruments-semiconductor-investment

18. https://www.cnbc.com/2023/10/23/micron-building-biggest-chip-fab-in-us-history-despite-china-ban.html#:~:text=%22We're%20now%20moving%20into,many%20of%20the%20early%20PCs.

19. https://www.cnbc.com/2023/10/23/micron-building-biggest-chip-fab-in-us-history-despite-china-ban.html#:~:text=%22We're%20now%20moving%20into,many%20of%20the%20early%20PCs.

20. https://nanotronics.ai/resources/2025-guide-to-american-chip-semiconductor-companies

21. https://www.northropgrumman.com/what-we-do/microelectronics/making-super-small-microelectronics-with-superpowers#:~:text=Hicks%20manages%20Northrop%20Grumman's%20Advanced,and%20other%20U.S.%20Government%20agencies.

22. For example, in losing some of its more important, high-end customers: https://www.investopedia.com/articles/markets/100214/inside-intel-look-mega-chipmaker.asp#toc-intel-faces-criticism

23. https://www.intc.com/news-events/press-releases/detail/1726/intel-reports-fourth-quarter-and-full-year-2024-financial

24. https://www.bbc.com/news/articles/c620gg77epxo

25. https://www.reuters.com/sustainability/land-use-biodiversity/trump-administration-expand-price-support-us-rare-earths-projects-sources-say-2025-07-31/

26. https://finance.yahoo.com/news/intel-ceo-responds-after-trump-calls-for-resignation-122344026.html

27. Both Trump and Tom Cotton have gotten involved in investigating: https://www.reuters.com/world/us/us-lawmaker-questions-intel-ceos-ties-china-letter-company-board-chair-2025-08-06/

28. The DOJ covers the details of what was sold, why that was illegal, and what the connections to the Chinese military are here: https://www.justice.gov/opa/pr/cadence-design-systems-agrees-plead-guilty-and-pay-over-140-million-unlawfully-exporting

29. https://www.reuters.com/world/china/cadence-plead-guilty-pay-140-million-us-china-sales-2025-07-28/

30. He was in a leadership role from 2008 to 2023, mainly as CEO: https://www.reuters.com/world/china/cadence-plead-guilty-pay-140-million-us-china-sales-2025-07-28/

31. http://www.cpreview.org/articles/2024/11/the-chip-war-assessing-us-policy-against-china-moving-forward

32. https://www.reuters.com/technology/why-is-trump-targeting-intel-ceo-lip-bu-tan-2025-04-10/

33. https://www.techinsights.com/blog/how-smic-joined-ranks-intel-tsmc-and-samsung

34. https://www.asiafinancial.com/us-still-backing-china-firm-providing-chips-for-drones-pla-units

35. https://www.reuters.com/technology/why-is-trump-targeting-intel-ceo-lip-bu-tan-2025-04-10/

36. https://m.economictimes.com/news/international/us/intel-ceo-malaysia-born-tech-lip-bu-tans-connections-with-china-companies-pla-army-exposed-details-here/articleshow/123168916.cms

37. https://economictimes.indiatimes.com/news/international/us/intel-ceo-malaysia-born-tech-lip-bu-tans-connections-with-china-companies-pla-army-exposed-details-here/articleshow/123168916.cms?from=mdr

38. https://economictimes.indiatimes.com/news/international/us/intel-ceo-malaysia-born-tech-lip-bu-tans-connections-with-china-companies-pla-army-exposed-details-here/articleshow/123168916.cms?from=mdr

39. https://www.reuters.com/technology/intel-ceo-invested-hundreds-chinese-companies-some-with-military-ties-2025-04-10/

40. https://www.marketwatch.com/story/trump-calls-for-intels-ceo-to-go-lawmakers-have-focused-on-his-ties-to-china-768390cc

41. https://www.reuters.com/world/china/trump-demands-highly-conflicted-intel-ceo-resign-over-china-ties-2025-08-07

42. SMIC: China’s Leading Hope for Chip Hegemony

Tan served on the board from 2001 to 2018. The legal battle raged from 2002-2009

43. https://www.reuters.com/world/china/trump-demands-highly-conflicted-intel-ceo-resign-over-china-ties-2025-08-07/

44. Quoted by Yuri in this article:

How To Counter CCP Unrestricted Warfare

45. https://2017-2021.state.gov/u-s-investors-are-funding-malign-prc-companies-on-major-indices/

46. https://www.bbc.com/news/articles/c70x6602pdyo

47. The Chinese semiconductor issue discussed here: https://www.heritage.org/china/commentary/time-wean-ourselves-chinese-semiconductors

48. https://www.dispatch.com/story/news/2025/07/24/intel-says-it-will-further-slow-construction-on-ohio-factories/85363393007/

49. https://www.computerworld.com/article/4028896/intel-to-lay-off-22-of-workforce-as-ceo-tan-signals-no-more-blank-checks.html#:~:text='Surgical'%20approach%20targets%20management%20layers,effectiveness%20and%20transform%20our%20culture.%E2%80%9D

50. https://www.tomshardware.com/tech-industry/semiconductors/intel-might-cancel-14a-process-node-development-and-the-following-nodes-if-it-cant-win-a-major-external-customer-move-would-cede-leading-edge-market-to-tsmc-and-samsung

51. https://www.tomshardware.com/tech-industry/semiconductors/intel-might-cancel-14a-process-node-development-and-the-following-nodes-if-it-cant-win-a-major-external-customer-move-would-cede-leading-edge-market-to-tsmc-and-samsung