- President Trump himself issued an order prohibiting the Broadcom-Qualcomm merger. He also prohibited Broadcom board members from seeking election.
- While no specific evidence is given in the order, the President believes that the merger raises “ national security concerns. ”
- Sources familiar with the matter declare that the Trump White House is concerned about an eventual chip monopoly with American interests influenced by Huawei.
As the ongoing drama between chip-makers Broadcom and Qualcomm has been quite the rollercoaster, no one may have anticipated what happened late Monday evening. In a startling turn of events, President Donald Trump issued a presidential order forbidding Broadcom’s purchase of Qualcomm.
The President’s order cites “national security concerns” because the reason behind the prohibition of the two businesses merging:
“There is credible evidence that leads me to believe that Broadcom Limited, a limited company organized beneath the laws of Singapore (Broadcom)…through exercising get a grip on of Qualcomm Incorporated (Qualcomm), a Delaware corporation, usually takes action that threatens to impair the national security of america. ”
The brief does not give any indication what the “credible evidence” is that brought the President to the decision. But the U. S. Treasury’ s Committee on Foreign Investment in america expressed similar concerns in a letter sent to both companies’ attorneys at the beginning of the month.
While the letter itself hasn’t been released to the general public, a source familiar with the message said that the U. S. government can be involved that “there would essentially be a dominant player in every of these technologies and that’s essentially Huawei, and then the American carriers would have no choice. They might just have to buy Huawei (equipment). ”
This is an intriguing claim since Huawei had its deal with AT& T squashed by the U. S. government, but not as significantly and directly as today’s Presidential incursion. Richard Yu, CEO of Huawei’s mobile division, was quoted saying that the AT& T deal was actually lost due to smartphone competitors “using politics” to stifle competition. But it appears that things are a lot more serious with regards to Trump’s White House and its own opinions on Huawei’s supposed connections with the Chinese government.
Not merely does this Presidential order forbid the firms from merging, but it also prohibits all 15 of Broadcom’ s proposed candidates for Qualcomm’ s board from standing for election. Trump is rendering it very clear he does not want too much power in the smartphone industry to rest in China’s hands.
Broadcom gave a statement soon after receiving word of the order:
“ Broadcom strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns. ”
Qualcomm only said that it’ll hold its 2018 Annual Meeting of Stockholders on March 23, 2018. It had no more statement at press time.
It is possible to read the full statement from the White House here.