Trump blocks Broadcom's acquisition of Qualcomm on national security grounds

midian182

TechSpot Editor
Staff member

Singapore-based Broadcom’s long-running attempts to purchase rival chipmaker Qualcomm could be at an end. Yesterday, President Trump issued an order blocking the acquisition and anything “substantially equivalent” over claims it could “impair the national security” of the US.

Broadcom has made several offers to buy Qualcomm since last November but has continually been turned down. The proposed deal had come under scrutiny from the Committee on Foreign Investment in the United States (CFIUS), who also said the takeover would pose a security risk. CFIUS warned that if Broadcom purchased Qualcomm, it would weaken the US firm's position against Chinese rivals, thereby allowing companies such as Huawei to dominate the 5G wireless industry, leaving America behind.

Based on CFIUS’s recommendations, Trump has issued an order under the Defense Protection Act of 1950 prohibiting any merger or acquisition.

“There is credible evidence that leads me to believe that Broadcom Limited, a limited company organized under the laws of Singapore (Broadcom) [...] through exercising control of Qualcomm Incorporated (Qualcomm), a Delaware corporation, might take action that threatens to impair the national security of the United States," reads a White House statement.

Trump’s order also disqualifies all 15 of Broadcom's proposed candidates for Qualcomm's board from standing for election.

Broadcom had hoped plans to move its headquarters from Singapore to the US would allow the deal to go through. “US national security concerns are not a risk to closing, as Broadcom never plans to acquire Qualcomm before it completes redomiciliation,” it said, in a statement. As Trump’s order says the firms should “permanently abandon the proposed takeover,” it appears that relocating to the US isn’t going to help Broadcom’s cause.

In a statement yesterday, Broadcom said it is reviewing the order and "strongly disagrees" that its proposed acquisition raises any national security concerns.

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Theinsanegamer

TS Evangelist
Wow. the look at the power of the executive department!

now, where is the power to regulate gpu prices and fight illegal profiteering?
Nothing illegal about selling a product for what the market will bear. Unethical? Depends on the industry. Illegal? Nope.

Especially as GPUs are not required for, well, anything really. Cant play video games? There is this thing called the OUTSIDE. There is a lot to do out there. You should try it.

We dont need government regulation on friggin GPUs. That is an obscene waste of resources.
 

Uncle Al

TS Evangelist
Hmmmmmmm ...... as much as I dislike Trump it looks like he finally made a good call. This is one technology that is so widely used we can hardly afford to allow for into foreign hands and before you argue about their use, all of these producers produce a lot of "specialty" chips for government and military application.
 

Kibaruk

TechSpot Paladin
@Theinsanegamer I think he was being sarcastic...

This is one technology that is so widely used we can hardly afford to allow for into foreign hands and before you argue about their use, all of these producers produce a lot of "specialty" chips for government and military application.
“US national security concerns are not a risk to closing"
Because my mom said.
 

mbrowne5061

TS Evangelist
Especially as GPUs are not required for, well, anything really...
GPUs are heavily used in the fields of AI and CFD research and design. A strong case can be made that their scarcity is impacting our ability to innovate in these fields that will be critical to the national defense. AI is the future of C&C, and we've reached the limit of what averaged Reynolds models can tell us about hypersonic flows - we now need to compute each flow line independently, and this requires a GPU architecture.

But, that's neither here nor there really, since this merger was about mobile chips.
 

bolski

TS Booster
Wow. the look at the power of the executive department!

now, where is the power to regulate gpu prices and fight illegal profiteering?
Nothing illegal about selling a product for what the market will bear. Unethical? Depends on the industry. Illegal? Nope.

Especially as GPUs are not required for, well, anything really. Cant play video games? There is this thing called the OUTSIDE. There is a lot to do out there. You should try it.

We dont need government regulation on friggin GPUs. That is an obscene waste of resources.
Just someone who wants his Obama-GPU (a dig at the Obama phone). They want things for free.
 
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GeforcerFX

TS Evangelist
Especially as GPUs are not required for, well, anything really...
GPUs are heavily used in the fields of AI and CFD research and design. A strong case can be made that their scarcity is impacting our ability to innovate in these fields that will be critical to the national defense. AI is the future of C&C, and we've reached the limit of what averaged Reynolds models can tell us about hypersonic flows - we now need to compute each flow line independently, and this requires a GPU architecture.

But, that's neither here nor there really, since this merger was about mobile chips.
There is no shortage of Tesla and Quadro, Firepro and so on, GPU's miners want the cheap gaming focused chips. Companies trying to do serious parallel processing are buying the higher end workstation and server class cards, which are usually ordered (in bulk) directly from the chipmaker.
 

Angga B

TS Enthusiast
Great LoL.

But seriously, one must see beyond the lines here. Why such a strong and right in your face rejection when he can easily (and more smoothly) block it in via DoJ due dilligence for merger which may hugely impair competition?

What message is he trying to convey to the community of large corporations (and wall streeters)?
 
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poohbear

TS Evangelist
Wow. the look at the power of the executive department!

now, where is the power to regulate gpu prices and fight illegal profiteering?
Nothing illegal about selling a product for what the market will bear. Unethical? Depends on the industry. Illegal? Nope.

Especially as GPUs are not required for, well, anything really. Cant play video games? There is this thing called the OUTSIDE. There is a lot to do out there. You should try it.

We dont need government regulation on friggin GPUs. That is an obscene waste of resources.
Lol he was being sarcastic. Maybe u should get outside and interact with ppl more so u understand what it is. ;)
 

mbrowne5061

TS Evangelist
There is no shortage of Tesla and Quadro, Firepro and so on, GPU's miners want the cheap gaming focused chips. Companies trying to do serious parallel processing are buying the higher end workstation and server class cards, which are usually ordered (in bulk) directly from the chipmaker.
And the enthusiasts and hobbyists fields - where a lot of the most creative innovations often occur - are left high and dry because they can't afford workstation-class cards, and now can't find or afford gaming-class cards either. It took me nearly 6 months to get my hands on a 1080ti, and I use its horsepower for both AI and CFD projects.
 
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Reachable

TS Evangelist
Great LoL.

But seriously, one must see beyond the lines here. Why such a strong and right in your face rejection when he can easily (and more smoothly) block it in via DoJ due dilligence for merger which may hugely impair competition?

What message is he trying to convey to the community of large corporations (and wall streeters)?
If he had blocked the merger via the conventional means, that would have sent a message to Wall Street that he was interested in regulating the economy and limiting the movement of money.

But that, of course, is totally not what Trump is about. I think he came up with the idea of blocking the merger himself out of his crude and belligerent nationalism.

However, he ended up doing the right thing for the wrong reason.