CFIUS was anxious that Broadcom's takeover would lead to a decline in investments in research and development in the sector, opening the door for Chinese firms to take the lead in developing next-generation wireless technology.
The decision of the head of the White house explained the presence of "credible evidence" indicating that the transaction "threatens the national security of the United States".
With the Broadcom takeover behind it, Qualcomm "can get back on target", said Larry Townes, project director of the Georgetown Center for Business and Public Policy.
Predictably, Broadcom goes on to say that it's "disappointed with this outcome", but that it'll nevertheless comply with the presidential order. It could just rest easy, or could make a play for either Broadcom or Qualcomm. That's probably a mergers-from-hell kind of scenario for competitors, including Samsung and Huawei, both when it comes to 5G networking technology but also other chip tech that's now in use in all sorts of smartphones and connected devices. Broadcom's key units are US-based; the company is headquartered in Singapore, which is generally considered friendly to the US.
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Qualcomm CEO Steve Mollenkopf is surely breathing a sigh of relief this morning after news emerged late Tuesday night that rival chipmaker Broadcom will formally abandon its attempt to acquire the San Diego company. That theoretically gives Chinese companies such as Huawei and closest rival ZTE Corp. the upper hand in steering the direction of wireless communications development, thereby - so the argument goes - jeopardizing US national security.
By way of a quick recap, the months-long saga began in November when Qualcomm rejected a takeover offer from Broadcom.
Broadcom also pulled its proposed nominees to Qualcomm's board of directors.
And not everyone thinks the U.S. national security concerns over the deal are justified. Treasury Department further sent a letter to both, Broadcom and Qualcomm which was made public on the 12th of March. Broadcom does say, however, that it will continue with the redomiciliation process it started to make this proposed buyout more attractive to U.S. regulators.
He added that the government is not trying to "make any other statement about Broadcom or its employees, including its thousands of hard working and highly skilled United States employees".
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