President Donald Trump issued an order blocking any merger of the chipmaking giants Broadcom and Qualcomm, saying it was necessary to protect national security, Bloomberg reported Monday.
Broadcom’s control over Qualcomm, the order says, might allow the Singapore-based company to “take action that threatens to impair the national security of the United States.”
Broadcom has been trying to purchase Qualcomm for the last several months, but has continually been rebuffed. It’s since tried to stack Qualcomm’s board with friendly members. Trump’s order says that Broadcom will not be allowed to purchase or merge with Qualcomm in any way, and that all of the people Broadcom has proposed to Qualcomm’s board are disqualified.
The announcement came just hours after Broadcom CEO Hock Tan met with officials from the Committee on Foreign Investment in the U.S. (CFIUS) to make his case for the deal, according to a source familiar with the meeting.
CFIUS had launched an investigation into the national security implications of the deal last week, over concerns that it would hamper US efforts to develop 5G wireless networks and other emerging technologies.
Earlier, CFIUS had notified Broadcom and Qualcomm that the former had violated a Treasury Department order issued on March 5, in what an unidentified Reuters source described as an unprecedented move.
Another source Reuters cites as familiar with CFIUS’ thinking had said that, if the deal was completed, the US 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).”
Full Content: Bloomberg