US President Donald Trump has blocked a planned takeover of chipmaker Qualcomm by Singapore-based rival Broadcom on grounds of national security.<\/p>\n
His order cited “credible evidence” that the proposed $140bn (\u00a3100bn) deal “threatens to impair the national security of the US”.<\/p>\n
There were concerns the takeover could have led to China pulling ahead in the development of 5G wireless technology.<\/p>\n
The deal would have been the biggest technology sector takeover on record.<\/p>\n
A takeover of Qualcomm by Broadcom would have created the world’s third-largest maker of microchips, behind Intel and Samsung.<\/p>\n
The chipmaking sector is in a race to develop chips for the latest 5G wireless technology and Qualcomm is considered to be a leader in this field, followed by Broadcom and China’s telecoms giant Huawei.<\/p>\n
Analysts say Qualcomm is highly regarded for its commitment to research and development (R&D), particularly in the field of 5G technology. Huawei is equally committed to R&D in the area.<\/p>\n
However, Broadcom is better known for selling assets and growing through acquisitions, and deemed to be weaker on R&D.<\/p>\n
With this in mind, analysts have said a deal between Qualcomm and Broadcom could have given Huawei the chance to take over the top spot in years to come – a situation US politicians wanted to prevent given their ongoing security concerns around Chinese telecom firms doing business with US carriers.<\/p>\n
Others have said Mr Trump’s decision was more about competitiveness than security concerns.<\/p>\n
“Given the current political climate in the US and other regions around the world, everyone is taking a more conservative view on mergers and acquisitions and protecting their own domains,” said Mario Morales, vice president of enabling technologies and semiconductors at global research firm IDC.<\/p>\n
“We are all at the start of a race, and you have 5G as a crown jewel that everyone wants to participate in – and every region is racing towards that,” he told the BBC.<\/p>\n
“Semiconductor technology and companies like Qualcomm will be an important weapon in that 5G arms race [and] the US like other nations and regions want to be first.”<\/p>\n
Broadcom said it was reviewing the order and “strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns”.<\/p>\n
The company had been pursuing San Diego-based Qualcomm for about four months.<\/p>\n
Last week, however,\u00a0Broadcom’s hostile takeover bid was put under investigationby the Committee on Foreign Investment in the US (CFIUS), a multi-agency body led by the US Treasury Department.<\/p>\n
The US company had rejected approaches from its rival on the grounds that the offer undervalued the business, and also that any takeover would face antitrust hurdles.<\/p>\n
Earlier this year, Chinese telecoms giant Huawei said it had\u00a0not been able to strike a deal to sell its new smartphone via a US carrier, widely believed to be AT&T.<\/p>\n
The US also\u00a0recently blocked the $1.2bn sale of money transfer firm Moneygram to China’s Ant Financial, the digital payments arm of Alibaba.<\/p>\n
–<\/p>\n
Source: BBC<\/p>\n","protected":false},"excerpt":{"rendered":"
US President Donald Trump has blocked a planned takeover of chipmaker Qualcomm by Singapore-based rival Broadcom on grounds of national security. His order cited “credible evidence” that the proposed $140bn (\u00a3100bn) deal “threatens to impair the national security of the US”. There were concerns the takeover could have led to China pulling ahead in the […]<\/p>\n","protected":false},"author":5,"featured_media":409360,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[107,106],"tags":[264,9065,17839],"yoast_head":"\n