Broadcom ends bid for rival Qualcomm after Trump intervention

15 March, 2018, 05:54 | Author: Darren Santiago
  • US President Donald Trump

Despite hitting back at the USA gov block, Broadcom had struggled to finalise a deal with Qualcomm anyway, with the latter claiming that Broadcom's bids Broadcom claiming they "undervalued" the company and its "leadership position in mobile technology".

Singapore-based tech company Broadcom Limited announced Wednesday that it will comply with President Donald Trump's orders and cancel plans to force a takeover of US chip maker Qualcomm. "The government is being very careful to ensure the USA keeps its leadership role developing these standards". The expedited action underscores the government's view of the importance of 5G wireless technology.

The FBI warned U.S. citizens earlier this year that they shouldn't buy smartphones made by Huawei. "I think we can be hopeful or optimistic Qualcomm, along with Ericsson, Intel and Nokia can win the race for 5G", Townes said.

The deal 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.

Broadcom's announcement a months-long battle to land the technology industry's biggest ever deal. "The Chinese government has been removing restrictions on Chinese companies involving foreign acquisitions, in a bid to increase Chinese dominance in the technology industry". That could lead to Qualcomm losing its leadership in telecom standards, the committee wrote in a letter earlier in March. Companies, including Qualcomm and China's Huawei, have been investing heavily to stake their claim in the underlying technology. Last week, Trump also cited national security concerns in announcing a series of harsh tariffs on steel and aluminum imports, a move that hit rivals such as China as well as allies such as Germany and South Korea.

Broadcom's proposal of investing a $1.5 billion fund into specific branches of Qualcomm's research to "to ensure United States leadership in future wireless technology" was rejected, as was its promise to sell "critical national security assets" to US-based companies only.

The US government views Huawei - one of the world's biggest telecommunications companies - as a national security threat.

"Nobody knows for sure, but there is a suspicion going around that Broadcom's ultimate goal is to help Huawei and that this play is an attempt to squelch American 5G development", Rosenzweig wrote recently on the Lawfare national security blog.

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