Monday, March 12th 2018
President Trump Blocks Broadcom-Qualcomm Deal Through an Executive Order
US President Donald Trump blocked the potentially-$117 billion Broadcom-Qualcomm merger through an executive order. The White House considered damning observations by the Committee on Foreign Investment in the United States (CFIUS), which had been studying potential national security implications of this merger. "There is credible evidence that leads me to believe that Broadcom Ltd. [by acquiring Qualcomm] might take action that threatens to impair the national security of the United States," wrote President Trump in the order.
Broadcom expressed shock and disbelief over the order. The company, in a statement, said that it "strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns." Qualcomm, meanwhile, battened down the hatches for any press comments. The American chipmaker had been wrestling an increasingly Broadcom-slanted board that was all but ready to sell the company to Broadcom at an undervalued price. According to data compiled by Bloomberg, the Trump administration has shot down ten similar deals since it came to power, in which foreign companies - overwhelmingly Chinese in national origin - had attempted buy out American high-technology firms. Californian Intel is still in the foray to swallow Broadcom, as CFIUS doesn't concern itself with American companies buying out foreign firms.
Source:
Bloomberg
Broadcom expressed shock and disbelief over the order. The company, in a statement, said that it "strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns." Qualcomm, meanwhile, battened down the hatches for any press comments. The American chipmaker had been wrestling an increasingly Broadcom-slanted board that was all but ready to sell the company to Broadcom at an undervalued price. According to data compiled by Bloomberg, the Trump administration has shot down ten similar deals since it came to power, in which foreign companies - overwhelmingly Chinese in national origin - had attempted buy out American high-technology firms. Californian Intel is still in the foray to swallow Broadcom, as CFIUS doesn't concern itself with American companies buying out foreign firms.
26 Comments on President Trump Blocks Broadcom-Qualcomm Deal Through an Executive Order
For now. Have to wait until the next (D) administration.
Despite what quite a few techies seem to think, corporations are not our friends. At best, they can provide things we want or need for acceptable prices, while also providing jobs for people. At worst - and far more realistically - they exist to get as much money out of consumers as possible, while avoiding their societal responsibilities (taxes and so on) to the largest extent possible. Profit-first corporations are the biggest moochers out there, and we desperately need effective regulation and policing to keep them in check, as they show us time and time again that if they can, they'll screw us over.
To get back on track: if the FTC was effective, it would never have allowed Intel, Nvidia, Qualcomm, or any other dominant chip maker to grow as dominant as they are. In the mid-20th century, market shares like that meant that the company might be forced to split into two separate entities to maintain competition. That's definitely a drastic measure, but it would ensure competition, and likely wouldn't hinder progress or development much at all.
It seems to me that Trump is the least "free market" president in the last years blocking deals, adding tariffs, etc...
In addition, they are the only US chipmaker left in the phone market. Mediatek is chinese, so is helios, so are the other no name brands used (I am sure there is another major chinese brand I am unaware of.)
From the US's standpoint, if qualcomm was bought by broadcomm, every future US government phone would have a chinese radio, with Chinese firmware, in it. That is a recipe for disaster. There would be 0 security at the federal level, on just about anything. Secret service, aides, DoD members, even the president himself, could all be eavesdropped on with no real way of preventing it, if the chinese wanted to. With qualcomm, at least the US has a chipmaker they can use, and subsequently review the code of.
Same reason crucial cant be bought by the chinese, the US government needs a source of flash storage that isnt controlled by the chinese (and chinese firmware).One side sitting on their laurels twittling their thumbs due to lack of competition, the other side producing non-competitive garbage, and GPUs hitting rediculous prices?
How does that NOT suck? There is no competition, there is nvidia and there is AMD's table scraps. We havent had competition since the 7000/200 series.
Ofcourse that's the crazy ideology, you can have your own country on Mars and have Broadcom do your dinner and Google do your laundry if you wish, we say no thanks.
Atheros is the other big chip OEM in consumer Routers, but Atheros was acquired by Qualcomm, the other big one in consumer networking is Realtek but Realtek is almost a monopoly in a lot of other smaller cheaper things already. Come on people, this is very good news!
There are these groups all over different topics on the internet which are people who don't really use anything but spend more time living on the internet being basically some kind of sports fans for various companies, the NeoGAF forums comes to mind where a group of people would spend most of the time discussing and cheering about these parasitic companies and how they dominate and how they conquer everything, these are delusional poor basement dwellers that have no idea how stupid they are and are unfortunately generating a lot of internet buzz in various ways and also creating a huge perception of "what the internet thinks", it's an incredibly primitive activity of very bored people, very similar to how average football fans talk in bars all day being half drunk, it took me some years of confusion until I finally got it, that's where all the console wars come from, it's a big football match, those people simply picked a company as if it was their football team, it's about the success of a team and only that, and ofcourse the context of what "success" means is all a standard skewed perception of what an average person would think success is, money, drugs, hollywood, fame, everything arrogant and greedy, and that's exactly why they don't even know the events going in the world and sorrounding this case, would still support a corporate merger by default, they just want a team to win, Broadcom in this case, it's like a game to them.
This block is just one little thing in a big plan, there's a lot more reasons than just natsec, but those reasons might have not been enough to lawfully do this, that's why they're unstated, but unlafwully because it's the law that's not good enough, there is absolutely nothing good for an average citizen when two large corporations merge, and if mergers are allowed without unrestrain you'll end up with one company basically ruling the whole planet because that's how the system is set up, it's mathematical, it's bound to happen.
If Broadcom and Qualcomm merge, is every American going to get a free hamburger? A free ride in an F-22 jet fighter ? A free ride to the moon ? Nope