Trump Blocks Broadcom Bid For Qualcomm Citing National Security Concerns

Qualcomm CES 2016 booth.

President Trump blocked Broadcom’s bid to purchase rival chipmaker, Qualcomm.

On Monday, President Donald Trump blocked Broadcom’s $117 billion bid to buy rival chipmaker, Qualcomm, on grounds of national security. The move disrupted what would have been the largest technology deal in history.

The president’s order cited “credible evidence” which had led him to believe that if the Singapore-based chipmaker would have acquired Qualcomm, it “might take actions that threaten to impair the national security of the United States.

There were previous concerns that the takeover could have resulted in China surpassing the US in the development of 5G wireless technology.

If it was successful, the Broadcom deal would have created the world’s third-largest maker of microchips, behind Intel and Samsung.

Trump’s decision to block the deal not only reinforced his administration’s protectionist stance but it also underscored the lengths that he is willing to go to prevent American companies from competing with foreign businesses.

The chipmaking industry is currently in a race to create chips which could sustain a 5G wireless technology. Qualcomm is considered to be a leader in this field, followed by Broadcom and Hong Kong-based telecommunication giant, Huawei.

President Trump was given the opportunity to block Broadcom’s bid for Qualcomm earlier this month. During that time, the Committee on Foreign Investment in the United States, a government panel that reviews deals after they are announced, said that it would postpone the chipmaker’s plea of purchase due to national security concerns.

Singapore-based Broadcom said that it was reviewing Trump’s order, and denied that the bid posed a security threat.

“Broadcom strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns,” a company spokesman said in a statement.

San Diego-based Qualcomm had rejected numerous attempts from Broadcom to buy the company, claiming that the offers undervalued the business.

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