US President Donald Trump has blocked the planned takeover of Qualcomm by Singapore based company Broadcom. The reason, he feels that the $140 billion takeovers might impair the national security of the United States.
On the other hand, Qualcomm has also shrugged off Broadcom’s buying bid by saying that price offered clearly undervalues the price of the company as per the current business standards.
Broadcom released a press statement which strongly disagrees that its proposed takeover could cause security concerns to the US or any other nation. Moreover, the silicon wafer producing company feels that the deal could have led to the formation of world’s 3rd largest maker of microchips, just behind Intel and Samsung.
Industry analysts feel that the latest federal order reciprocates more about competitiveness than security concerns. As trump administration is considering a rollover to 5G wireless technologies, Qualcomm was considered as a leader in this field followed by Broadcom and Huawei.
If Broadcom succeeded in snapping Qualcomm, then Huawei could have reached the top slot in years to come- a situation which trump dislikes to the core of his heart( as Huawei is a Chinese telecom firm) and America doesn’t want Chinese dominance in any field from now on.
From past two days, there is a good amount of speculation in the media that Intel could buy Broadcom- as a part of a defensive strategy to cut down competition in chip-making business.
But since Trump has issued an order that no company from Asian region will be allowed to do business in the US and will also be strictly prevented from purchase, the above said the deal could also be halted.
