President Trump nixes Broadcom-Qualcomm deal


Broadcom's attempt to take control of rival chipmaker Qualcomm appears to have hit a tough barrier, as US President Donald Trump has weighed in with a presidential order forbidding any merger between the two companies. Furthermore, Trump disqualified all 15 of Broadcom's candidates for Qualcomm's board of directors. The order cites national security concerns as the primary reason for blocking the acquisition of San Diego-based Qualcomm by Broadcom, an organization with elements in the US, Singapore, and the Cayman Islands.

Trump cites subsection 721f of the Defense Production Act of 1950 in the order, but does not specifically refer to how a merger between the two silicon design firms would "impair the national security of the United States." The New York Times' Cecilia Kang posits that Trump blocked the merger as part of the administration's campaign to level the playing field between the US and economic rival China.

The executive order also includes instructions for Qualcomm to accelerate its elections for its board of directors. The company is now moving forward toward a March 23 date for electing its board.

Broadcom issued an exceptionally-brief press release denying the suggestion that its acquisition of Qualcomm would pose any threat to US national security, stating simply that "[it's] reviewing the Order", and that "[the company] strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns."

Aimen Mir, a member of the Committee on Foreign Investment in the United States (CFIUS), says the committee concluded that the deal would weaken Qualcomm's leadership position in the field of next-generation 5G mobile networks and leave an opening for Chinese manufacturer Huawei. Broadcom already initiated plans to move its headquarters to the US and reportedly wrote to lawmakers promising not to slow R&D efforts in 5G mobile networks even if it was allowed to acquire Qualcomm.

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