Trump halts Qualcomm takeover by Broadcom for national security

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In an unexpected turn of events, the American president Donald Trump blocks the takeover of chipmaker Qualcomm by Broadcom, for reasons of national security.



The president states that there is no other way to guarantee national security and that he has "credible evidence" that security risks rise. Furthermore, the document states that Qualcomm must hold its annual shareholders' meeting in the next ten days. The company must stop the acquisition together with Broadcom and provide written proof of this once the step has been taken. The presidential order reflected a calculation that the United States’ lead in creating technology and setting standards for the next generation of mobile cell phone communications would be lost to China if Singapore-based Broadcom took over San Diego-based Qualcomm, according to a White House official, reports reuters.

Qualcomm has emerged as one of the biggest competitors to China’s Huawei Technologies Co in the sector, making Qualcomm a prized asset. A White House official on Monday confirmed that the national security concerns related to the risks of Broadcom’s relationship with third party foreign entities.

A source familiar with CFIUS’ thinking had said that, if the deal was completed, the U.S. military was concerned that within 10 years,“there would essentially be a dominant player in all of these technologies and that’s essentially Huawei, and then the American carriers would have no choice. They would just have to buy Huawei (equipment).”

Huawei has been forging closer commercial ties with big telecom operators across Europe and Asia, putting it in prime position to lead the global race for 5G networks despite U.S. concerns.

Huawei has a dominant position in China, which is set to become the world’s biggest 5G market by far, and has also made inroads in the rest of world to compete with rivals such as Ericsson and Nokia in several lucrative markets, including countries that are longstanding U.S. allies.

Trump halts Qualcomm takeover by Broadcom for national security


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