China in mind, Donald Trump kills world’s biggest tech deal between Broadcom, Qualcomm: What it means

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Updated: March 13, 2018 6:27:02 PM

US President Donald Trump has killed the biggest technology deal in history, citing "credible evidence" that suggested a threat to his country's security.

Donald TrumpIn this March 6, 2018, photo, President Donald Trump speaks during a news conference with Swedish Prime Minister Stefan Lofven in the East Room of the White House in Washington. Gary Cohn’s departure as chief Trump economic adviser heightens doubts about the direction of the administration’s economic policies just as Republican lawmakers prepare for midterm elections. (AP Photo)

US President Donald Trump has killed the biggest technology deal in history, citing “credible evidence” that suggested a threat to his country’s security. By blocking the $117 billion takeover of Qualcomm Inc by Broadcom Ltd, US President Donald Trump has made it clear that he would leave no stone unturned to stop China from getting any edge in critical technology. And such attempt, if made, would be nipped in the bud in the name of “national security”. As Trump’s Presidential Order blocking the merger said today:

“There is credible evidence that leads me to believe that Broadcom Limited, a limited company organized under the laws of Singapore (Broadcom), along with its partners, subsidiaries, or affiliates, including Broadcom Corporation, a California corporation, and Broadcom Cayman L.P., a Cayman Islands limited partnership, and their partners, subsidiaries, or affiliates (together, the Purchaser), through exercising control of Qualcomm Incorporated (Qualcomm), a Delaware corporation, might take action that threatens to impair the national security of the United States,” the order read.

China loomed large on the US policymakers’ mind amid fears of the foreign takeover of the American chipmaker Qualcomm.

A United States Treasury had written last week that in the wake of the hostile takeover” of Qualcomm, China would “compete robustly” to fill any void left by Qualcomm, the New York Times reported today.

Had the deal been successful, America’s largest mobile chipmaker would have become an Asian-owned company. It was believed by the US administration that China’s Huawei technologies would have got a clear field if Qualcomm had floundered under Broadcom.

At present, the Delaware-based chipmaker is neck and neck with Chinese Huawei Technologies Co. The winner between the two may decide the dominant player in the development of next generation of wireless technologies in near future.

The US government is apparently concerned that Chinese giant Huawei may soon develop tech as fast as its American counterpart.

Computer chips are expected to become one of the most vital technologies in near future. Qualcomm has an edge at present because its tech is used by almost every major business and consumer electronics providers.

Experts believe Trump’s decision to block the Broadcom-Qualcomm deal has given a clear signal that American chipmakers are not for sale, and especially when Chinese interests are served.

Since taking to power in 2016, the US President has been very vocal against any foreign takeover of American technology and companies. Reports have claimed the US is also planning a clampdown on Chinese investments in a bid to punish Beijing for intellectual property theft.

Broadcom-Qualcomm merger would have created world’s third-largest chipmaker after Intel and Samsung.

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