Published: Wed, March 14, 2018
Science | By Hubert Green

Trump blocks Broadcom's $117-b bid to buy Qualcomm

Trump blocks Broadcom's $117-b bid to buy Qualcomm

Broadcom Ltd Chief Executive Hock Tan is unlikely to slow his acquisition spree after US President Donald Trump blocked the microchip maker's US$117 billion (RM456.7 billion) bid for Qualcomm Inc on national security grounds, analysts said yesterday. Beyond giving you a much faster connection on your phone, 5G could serve as the communications foundation for emerging technologies like self-driving cars, streaming virtual reality experiences and advanced telemedicine options like remote surgery.

5G remains in the early stages of development.

The agency also cited the Defense Department's reliance on products made by Qualcomm, which is based in San Diego.

"These transitions come along nearly every decade or so, moving to a new iteration of technology", said Jon Erensen, research director for semiconductors at research firm Gartner. "The government is being very careful to ensure the USA keeps its leadership role developing these standards". "The government is being very careful to ensure the US keeps its leadership role developing these standards".

It's the second recent USA warning shot across the bow of foreign telecom makers. The company was hoping that their current process of moving its headquarters back to the USA would be enough to alleviate the concerns put forth by the federal government.

Broadcom said earlier this year it would fully be a USA domiciled company by May 6.

The FBI warned United States citizens earlier this year that they shouldn't buy smartphones made by Huawei.

The stakes are even higher in the 5G race.

Two analysts said Xilinx and Mellanox would be a good fit for Broadcom, though not as transformational as Qualcomm.

The deal, spearheaded by CEO Hock Tan, would have created the world's No. 3 semiconductor company with a leading market share in smartphones, vehicle electronics and industrial internet devices. Qualcomm also owns patents on key pieces of mobile technology that Apple and other manufacturers use in their products.

Trump may not get to build the network himself, but he's sure not going to leave it to China to build it for us. At the same time, there has been a wave of consolidation in the industry, so "the direction for the technology and standards has been [putting them in] fewer hands at this point and the stakes are bigger".

The Treasury argued that Broadcom has a history of acquiring companies, and then slashing their spending on new technologies. The move followed a letter from the Committee on Foreign Investment, which said that letting a foreign company control Qualcomm would pose a security risk.

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