Broadcom says to stick with USA 5G investment after Qualcomm deal


The government said it fears an acquisition by Broadcom could threaten Qualcomm's competitiveness. But in light of the heat this week from Washington, Broadcom is now aiming to be complete the move to the United States in April.

Qualcomm just concluded its 5G day in San Diego, California, where it showed off a number of new demos showcasing what the new Snapdragon 845 can do.

The US "has identified potential national security concerns that warrant a full investigation of the proposed transaction", treasury said.

Some on Wall Street and in government have been vociferously against the proposal, partly because of the idea that Broadcom might cut Qualcomm jobs, but also because of the importance of the companies' products-chips for telecommunications equipment-in the upcoming wave of "5G" mobile broadband technology.

The Treasury Department laid out its concerns in a letter to both chipmakers explaining its Sunday order to delay Qualcomm's annual shareholder meeting. Broadcom shareholders are expected to vote on the move in early May.

Before Broadcom disclosed its buyout offer for Qualcomm in November, Trump himself announced Broadcom's plan to shift its headquarters back to the United States after a White House meeting with CEO (chief executive officer) Hock Tan, a Malaysia-born businessman.

Qualcomm also is a product supplier to the USA government and is working with it on cybersecurity for the next generation of wireless, 5G and the Internet of Things, according to the letter.

"This will ensure America's lead in future wireless technology", Broadcom said in its statement. "Articulation of the potential national security concerns, in significant part, is classified".

Broadcom has sought to acquire Qualcomm since November in what would be the largest tech merger in history at $117 billion, but the US company rejected each offer.

The letter was only made public by Qualcomm on Tuesday 6 March and is a rarity as the CFIUS rarely weighs in on deals it is examining. It lends weight to Qualcomm's argument that the hostile bid would struggle to get regulatory sign-off.

These days, the US government is keeping Chinese companies at bay while mentioning national security. The company is now based in Singapore, but said in November that it will move its legal headquarters back to the United States.

Mir noted that Chinese companies such as Huawei, which is also the No. 3 smartphone maker, have increased their engagement in 5G's development and that Huawei owns about 10 percent of 5G essential patents.

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