On Tuesday, Intel started its much anticipated new chapter when Lip-Bu Tan, a longtime chip executive, took the reins as chief executive. 

For Intel’s board and investors, Tan represents something of a savior: Intel’s previous CEO Patrick Gelsinger resigned last December after the company posted a $16.6 billion quarterly loss  — the biggest in Intel’s history. Tan, who was previously chief executive of Cadence Design Systems, a chip design software company, himself resigned from Intel’s board last summer, having privately expressed frustration about the company’s contract manufacturing business. His appointment is seen by many as a necessary antidote to Gelsinger’s slow pace. After naming Tan CEO on March 12, Intel’s stock rose 25 percent, though it has since tapered a bit. 

But while many industry insiders view Tan as Intel’s best chance to restore America’s chipmaking capability at a critical time, he is also a surprising choice because of his longstanding and prolific investments in the semiconductor industry in China, America’s chief rival. 

Tan’s venture capital firm, San Francisco-based Walden International, has made around 140 investments in Chinese chip companies since its founding in 1987, including in Semiconductor Manufacturing International Corporation (SMIC) and Advanced Micro-Fabrication Equipment (AMEC), two companies at the forefront of China’s efforts to make its own cutting-edge chips and in the crosshairs of U.S. officials.¹SMIC was added to the Commerce Department’s Entity List in 2020, while AMEC was added to the Defense Department’s list of “Chinese military companies” last year. It was subsequently removed in December after AMEC filed suit. Tan himself sat on the board of directors of SMIC for almost two decades and on the board of AMEC for 15 years. A Walden managing director, Tony Zhang Yu, continues to sit on AMEC’s board, suggesting that Walden may still hold a stake in the company.

Walden no longer holds a stake in SMIC, but WireScreen shows that, as of December 2024, its funds were invested in Shanghai Biren Technology, a prominent would-be rival to Nvidia that is on the Commerce Department’s export control list. ​​According to WireScreen, funds managed by Walden hold stakes in at least two other U.S.-blacklisted companies, Shenzhen Intellifusion Technologies Co. and Beijing E-Town Semiconductor Technology. Its limited partners also include at least nine state entities. 

These investments in China are going to be a liability… [I]n this era of geopolitical competition, Walden’s role in China could raise some eyebrows and could complicate [Intel’s] ability to negotiate deals with the U.S. government.

Jimmy Goodrich, senior advisor for technology analysis to the RAND Corporation

Indeed, as of 2022 Walden managed at least 4.7 billion RMB (~$650 million) on the Chinese state’s behalf, including for the State-owned Assets Supervision and Administration Commission of the State Council, the national organization tasked with managing state-owned enterprises, and for a handful of provincial governments. 

Tan will remain chairman of Walden even as he takes the CEO position at Intel, and many of Walden’s investments in Chinese companies have been divested, according to a person familiar with the matter. 

Walden did not respond to phone calls or emails requesting comment. 

Intel declined to comment.

“These investments in China are going to be a liability,” says Jimmy Goodrich, senior advisor for technology analysis to the RAND Corporation. “On the one hand, Lip-Bu is fantastically talented and the right person for Intel at this moment, when it’s especially important that Intel succeeds for America’s national security. But in this era of geopolitical competition, Walden’s role in China could raise some eyebrows and could complicate [Intel’s] ability to negotiate deals with the U.S. government.”

For years, global chip companies were keen investors in China’s semiconductor industry. In 2011, for example, after Walden set up China’s first chip investment fund alongside the Shanghai government and the National Development and Reform Commission, China’s top economic planning agency, companies like Arm, Samsung and TSMC signed up as co-investors. And as Beijing ramped up its push to become a dominant player in the chip sector in the late 2010s, Silicon Valley investors eagerly participated in funding rounds that raised billions of dollars for Chinese chip startups.

Where Walden stands apart, however, is in its long-standing focus on semiconductors and its willingness to continue to pursue deals in China as the political costs of doing so have ballooned. A former official in the Biden administration told The Wire that Walden was a “poster child” for proponents of the outbound investment controls that Biden imposed by executive order, particularly due to the firm’s investments in SMIC, Biren and the drone maker DJI. 

In July 2023, the bipartisan House Select Committee on the Chinese Communist Party took aim at the most active Silicon Valley VC firms investing in China’s high-tech sectors. It sent Tan a letter to “express serious concern” about his firm’s investments in Chinese artificial intelligence and semiconductor companies, citing a think tank report that found that at least 39 percent of Walden’s AI investments went to Chinese firms between 2015 and 2021.²Since 2015, the firm has participated in 129 deals in China worth an estimated $3.8 billion, according to Preqin, an investment data provider.

The same committee then published a report accusing Walden and four other VC firms of facilitating China’s technological advancements. It found that Walden has invested between $833 million and $2.25 billion in Chinese semiconductor firms. More than $50 million in early investment went to state-owned SMIC, according to company documents viewed by the Select Committee. 

Three of the five firms targeted by the committee — Sequoia Capital, GGV Capital and GSR Ventures — have split their U.S. and China investment arms. GSR Ventures was the latest to do so when it hived off and renamed its U.S. arm just last week.³The fourth firm is Qualcomm Ventures, a subsidiary of the San Diego-based chip designer.

Although the pace of its dealmaking has slowed since Congress’s rebuke, Walden has stood firm. But it is a position that could become untenable as Tan assumes leadership of America’s chip champion.

“Is it awkward? For sure,” says Chris Miller, a professor at Tufts University and author of Chip War: The Fight for the World’s Most Critical Technology. “The entire chip industry has had to reorient its way of thinking about China given pressure from the U.S. government, and it’s been a tough reorientation for many in the chip industry who came of age at a time when economic interlinkages with China were not only seen as unobjectionable, but the right way to make money.”

Adding to the awkwardness is Tan’s history of leaning into the perception that his goal is to help China’s chip development. 

“I am an overseas Chinese and have always had a Chinese complex,” he said in an interview with Chinese media in 2018. “Although Cadence is an American company, within the scope allowed by the U.S. government, we will help domestic [Chinese] companies in tools and IP as much as possible.”

Walden has even become so synonymous with chip investments in China that it has named at least 16 of its funds “Huaxin,” Mandarin for “China chip.” 

The irony, of course, is that Tan’s success in China is what Intel now needs. With Chinese chipmakers like SMIC capable of producing 7 nanometer chips — the same process node as Intel’s current generation of chips — many analysts note that Tan might be best positioned to help the struggling 57-year-old American company regain the lead.

SMIC “has both hands tied behind their back” and they’re still performing well, says Doug O’Laughlin, president of Semianalysis, a chip consultancy. “They don’t need Intel. We [the U.S.] need Intel. It’s a much more critical concern the other way around. Lip-Bu Tan is one of the most qualified people to possibly do this.”

‘Ascendant China’

Tan was born in Malaysia in 1959 into a family of high achievers. His mother worked at Singapore’s Nanyang Technological University and his father edited Malaysia’s leading Chinese-language newspaper. The youngest of five siblings — including a Rhodes Scholar, two doctorate holders and a sister who speaks 16 languages — Tan described himself in a 2018 interview as “kind of a drop out.” After graduating from Nanyang Technological University with a degree in quantum physics after just three years, he started a PhD program in nuclear engineering at MIT. But he withdrew from the program soon after the Three Mile Island disaster in 1979, fearing there was no future for nuclear power in the United States. 

Tan then turned to business. After getting a MBA at the University of San Francisco and working briefly as an engineer, he started Walden International in 1987, the same year he became a naturalized American citizen. The firm was a spin-off of Walden Venture Capital and designed to focus on the booming Asian market. His first fund, he said in a 2018 oral history interview with the Computer History Museum, raised $3.3 million and included money from his father’s friends in Malaysia. By 1994, the firm’s China Walden Venture Fund had won $7.5 million in investment from the World Bank. 

Walden’s Chinese name, huádēng, translates roughly to ‘ascendant China.’ 

“My father gave the company its Chinese name, hoping that Walden would contribute to China’s rise and serve as a beacon of progress,” Tan said in a speech to commemorate AMEC’s public listing in 2019. 

Within five years of its initial foray into the Chinese market, Walden led a $6.5 million investment round in Beijing Stone Rich Sight Information Technology — a stake that positioned the fund to profit from China’s first variable-interest-entity (VIE) merger when Stone Rich Sight combined with U.S.-based Sinanet in 1998. 

Tan said the deal, which saw Walden become the largest shareholder in the new entity, Sina, would go down “in the annals of venture capitalism.” It did.

The merger set the stage for Walden to get access to the highest echelons of Chinese government decisionmaking. After the deal, one of Walden’s vice presidents, Daniel Mao, jumped ship to Sina. Mao became Sina’s chief executive in 2001, and two years later married Chinese President Hu Jintao’s daughter.

Intel has a lot of IP, but they’ve never made it externally focused and available to other people. This is where the expertise at the EDA and IP level, which Cadence has, is the important link. Tan has the expertise to make [Intel’s] process usable.

Doug O’Laughlin, president of Semianalysis, a chip consultancy

Mao was not the only tie between Walden and China’s political elite. In 2001, the firm brought on Jeffrey Zeng as a managing director responsible for leading venture investments in China. A “princeling,” Zeng is the son of Zeng Peiyan, who at the time led the powerful State Planning and Development Commission and later became vice premier. Zeng worked at Walden for seven years before going on to be managing director at Kaixin Investments, a VC firm set up by two state-owned entities, China Development Bank and Citic Capital. 

By 2004, Walden was all in on semiconductors — an unusual venture capital strategy at the time. 

“Throughout the 2000s, nobody wanted to touch semiconductors because they have long investment timeframes, and the technology is more difficult and risky,” says Goodrich. “Walden was one of the few VC firms that was willing to invest in semiconductor startups. It bucked that trend, seeding companies both in the U.S. and China.”

In the U.S., Walden invested in companies like Inphi Corporation, a chipmaker that was later acquired by California-based Marvell, and Aptina Imaging, a Micron Technology spinoff that was later acquired by Arizona-based ON Semiconductor. And in China, it soon became one of the largest foreign financiers of chip manufacturers, often partnering with state entities to raise investment. 

Today, Walden manages $2.3 billion in assets in total, according to data provider Pitchbook. 

“When you say Walden International, really what you’re saying is Lip-Bu Tan,” says Tony Huang, an Asia-focused venture capitalist who invested with Tan in the 1990s and early 2000s. “The two are the same, because he’s the only constant [over four decades].”

Tan held onto his role as Walden’s chairman even after he took on an additional role as CEO of the San Jose-based Cadence in 2009. Cadence’s software is used by practically all chip designers. In a 2012 interview with Sina Technology, he explained that he balanced both roles by sleeping four hours per night and that he saw the work of both Cadence and Walden as mutually beneficial since “many of the [Chinese] companies I invest in are also Cadence customers.”

‘The New Intel’

Analysts note that Tan’s role at Cadence has given him a holistic and customer-centric view of the semiconductor industry that Intel desperately needs. Companies like Cadence produce electronic design automation (EDA) software, which allows chipmakers to design and test their blueprints before putting them into production. Even integrated chipmakers like Intel — which design, fabricate and package their own chips in-house — rely heavily on companies like Cadence to design their next-generation chips.

Gelsinger, the previous Intel CEO, had been leading a hundred-billion dollar turnaround plan at the company that involved attracting new customers with a “world-class” business manufacturing chips for other companies, which is known as a foundry model. This included two new state-of-the-art plants in Ohio supported by agreements for nearly $8 billion from the Biden administration’s CHIPS Act. (Intel has received $2.2 billion so far). 

But analysts note that Intel’s efforts to build a competitive foundry model have long been hindered by uncompetitive prices and the required use of its proprietary tools. 

Lip-Bu is like a statesman. He’s very polished, very diplomatic, but he is also very, very sharp. I think what he brings to the table is not necessarily his investment acumen, but he has a knack of doing deals.

Tony Huang, an Asia-focused venture capitalist who invested with Tan in the 1990s and early 2000s

“Intel has a lot of IP, but they’ve never made it externally focused and available to other people,” says O’Laughlin, adding that Intel’s design rules have been opaque and difficult for customers to navigate. “This is where the expertise at the EDA and IP level, which Cadence has, is the important link. Tan has the expertise to make [Intel’s] process usable.”

Tan stepped down as chief executive of Cadence in 2021 and joined Intel’s board the following year, just one month before the Biden administration unveiled export controls that restricted the sale of advanced chips made with American technology to Chinese buyers. (The administration tightened those controls in 2023 and 2024.)

Supporters note that Tan’s resignation from the Intel board last August illustrates his desire to help the U.S. regain its chipmaking abilities; he was frustrated, insiders say, with Intel’s slow pace under Gelsinger, and he has signaled he intends to move swiftly to create “The New Intel.”

“I believe we have a truly unique opportunity to remake our company at one of the most pivotal moments in its history,” he wrote in his first letter to Intel employees. He promised to establish Intel as “a world-class foundry,” echoing a phrase used by Gelsinger.

Tan’s connections in China might even help Intel as the company navigates its tricky relationship with Beijing. Last year, a think tank associated with China’s top cyberspace regulator called for Chinese regulators to do a security review of Intel’s products in China. Analysts saw the article as a warning shot for Intel, though nothing further has come of it. Like many U.S. semiconductor firms, Intel remains deeply dependent on the Chinese market, which accounted for 29 percent of its net revenue in 2024.

“Lip-Bu is like a statesman,” says Huang, the Asia-focused venture capitalist. “He’s very polished, very diplomatic, but he is also very, very sharp. I think what he brings to the table is not necessarily his investment acumen, but he has a knack of doing deals.”

His China dealmaking with Walden’s funds, however, may soon slow to a crawl. Outbound investment restrictions that went into effect at the start of this year will severely curtail Walden’s ability to invest in China’s high-end chips and AI sector. The Trump administration has also signaled it could up the ante: Last month it ordered federal agencies to “consider new or expanded restrictions” in outbound investment to several Chinese sectors, including semiconductors.

Hrishikesh Hari, a partner at law firm Dechert LLP, says these rules together with public scrutiny could deter U.S. investors from China-focused funds like Walden’s. “Fewer U.S. institutional investors appear to be willing to tolerate the headline risk associated with investments in the Chinese semiconductor industry,” he says.

Indeed, notes Miller, the way in which the U.S. let Western firms like Walden help build China’s high-tech industries, “in hindsight, looks like an extraordinary strategic error.” 

But many industry analysts now seem focused on the future and what Tan can do for Intel — and the United States — going forward.  

“Remember: every single chip that is ever made that has any bit of high-end logic is done on an island off the coast of China. It’s a pretty concerning situation,” O’Laughlin says, alluding to Taiwan’s TSMC, its dominance in chipmaking and China’s claims over the island. Intel, he says, is “the only [company] with the ability to change that. It’s a really powerful hand.”

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