Broadcom Takeover of Qualcomm Blocked By Trump

Discussion in '[H]ard|OCP Front Page News' started by rgMekanic, Mar 12, 2018.

  1. rgMekanic

    rgMekanic [H]ard|News Staff Member

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    The Washington Post is reporting that President Trump has issued a Presidential Order for Broadcom to abandon it's hostile bid to acquire Qualcomm. In the order President Trump cited "credible evidence" that the takeover "threatens to impair the national security of the United States." Last week the Committee on Foreign Investment called the takeover a National security risk, and was launching an investigation.

    Well that finally spells the end of the saga. I commented last week that I was completely for the investigation, as putting your entire nations wireless communication in the hands of one company, let alone a foreign one, was a bad idea, and it appears that President Trump agrees. Hopefully now Qualcomm can innovate without this hostile takeover looming.

    One factor that may have pushed CFIUS to move quickly was a unusual maneuver by Broadcom to relocate to the United States. The company had said in a recent corporate filing that it was finalizing its plans to become an American entity in early April. Deals between American companies fall out of CFIUS' jursidiction.
     
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  2. DejaWiz

    DejaWiz Oracle of Unfortunate Truths

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  3. JosiahBradley

    JosiahBradley [H]ard|Gawd

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  4. rgMekanic

    rgMekanic [H]ard|News Staff Member

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  5. dgingeri

    dgingeri 2[H]4U

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    This is troublesome. The company that has become Broadcom started as an investment group that snatched up every slightly troubled tech company, monopolizing many areas of server technology and driving up the prices by double to triple. They're on a mission, and they are very powerful. I don't think they'll take this sitting down. They'll almost certainly begin to come after Trump politically for this.
     
  6. 5150Joker

    5150Joker 2[H]4U

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    Smartest thing Trump has done so far. America has been selling off its crucial technology assets to foreign companies for way too long now.
     
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  7. CombatChrisNC

    CombatChrisNC Gawd

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    Hey, a broken clock is right twice a day.
     
  8. Chupachup

    Chupachup Limp Gawd

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    "Credible evidence" is a good thing now?! FFS!
     
  9. theBrownLlama

    theBrownLlama Limp Gawd

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    time for plan B, buying stakes or out right buying over stockholders of Qualcomm using proxies two-hopes away.

    very little chance the White House can unknot this tangle

    lets see if media is persistent enough to continue tracing and covering the corporate going-ons at Qualcomm and Broadcomm
     
  10. TrailRunner

    TrailRunner Limp Gawd

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    As a dirty low-down capitalist, I am getting pretty discouraged over Qualcomm’s performance. Intel’s really eating into their modem business, and there doesn’t seem to be a lot of interest in their enterprise SoC diversification. The NXP deal better go through.
     
  11. Twisted Kidney

    Twisted Kidney 2[H]4U

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    A question for American political enthusiasts. Is there a process here or can one guy just dictate what happens in this?
     
  12. CombatChrisNC

    CombatChrisNC Gawd

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    There's a board which considers outside investment against the national security and then they make a recommendation to the executive.
     
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  13. umeng2002

    umeng2002 Gawd

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    Why do things like this confuse people?

    You really think the US Government would allow foreign owned companies to takeover American companies that supply our defense industry and critical infrastructure?
     
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  14. Dead Parrot

    Dead Parrot [H]ard|Gawd

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    Yes. https://www.energy.gov/sites/prod/files/Large Power Transformer Study - June 2012_0.pdf Somewhere around page 25 starts the how many we get from outside information.
    Try to buy a wholly US made Router, switch, modem, computer lately? Or a display screen?
     
  15. Unter Dog

    Unter Dog [H]Lite

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    I’ve been actively designing out NXP due to their terrible recent lead times. Hope Qualcomm can help get that fixed and not Bork it more.
     
  16. sfsuphysics

    sfsuphysics I don't get it

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    So what's the history of other presidents specifically baring one company from buying out another?
     
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  17. lollerwaffle

    lollerwaffle Gawd

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  18. sfsuphysics

    sfsuphysics I don't get it

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    Oh I'm not trying to play sides on this, I was genuinely curious how many other times a "Presidential Order" was done to stop this, as opposed to a simple antitrust assessment. Curious how a US president puts a stop to one foreign company buying another foreign company though.
     
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  19. northwoodsf

    northwoodsf [H]Lite

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    I too think it is better that they are two separate companies.
     
  20. DukenukemX

    DukenukemX 2[H]4U

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    Did Trump stop the free market from doing whatever it wants?
     
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  21. griff30

    griff30 I Lower the Boom!

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    Yeah, he put America first. Specifically National Security.

    Would you want "Russians" running our entire communications platform?
    Didn't think so.
     
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  22. Twisted Kidney

    Twisted Kidney 2[H]4U

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    Makes sense, I'm not sure if I'd support a single man having that power, but sometimes decisions need to be fast. I'm sure there's further process.

    This really isn't a free market situation, Chinese companies don't have a great deal of autonomy. Basic parts are one thing, huge swathes of communications infrastructure are another. Let's not forget their president just became supreme dictator for life.

    Though supreme dictator for life is kind of amateur compared to "His Excellency, President for Life, Field Marshal Al Hadji Doctor Idi Amin Dada, VC, DSO, MC, Lord of All the Beasts of the Earth and Fishes of the Seas and Conqueror of the British Empire in Africa in General and Uganda in Particular".
     
  23. Gasaraki_

    Gasaraki_ Gawd

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    Yes, everything is a National Security issue now. Don't we have a process for issues like this? Like Department of Justice or FBI? Did emperor trump really need to step in right now? Did the merger get approved already?
     
  24. Gasaraki_

    Gasaraki_ Gawd

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    Broadcom is not a Chinese company....
     
  25. Twisted Kidney

    Twisted Kidney 2[H]4U

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    I just leaned it's a Singapore company. That's much more interesting, it really does make things muddier.

    Especially the intent of quashing the deal. If this is all about the location of manufacture of the parts then the veto of the deal is probably nothing but nationalistic hand-fucking. Intel's shit is made all over the world, too. So is everybody else's... everything.

    I do feel like I wasted Idi Amin's title now.
     
  26. Nytegard

    Nytegard 2[H]4U

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    Have to give credit where credit is due. Good job Mr. President.
     
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  27. Bigdady92

    Bigdady92 [H]ardness Supreme

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    This is a play now for Intel to swoop in and buy one or the other.
     
  28. groebuck

    groebuck 2[H]4U

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    I don't know why they would block this - where do they think most technology is made? When everyone was offshoring everything - what security was in place? None. How do you think Cisco ios code showed up in Huawei routers?
     
  29. DukenukemX

    DukenukemX 2[H]4U

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    No, it's just that's odd coming from a Republican.
     
  30. Galvin

    Galvin 2[H]4U

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    My fear is one day we'll have maybe 4 to 5 companies at the top. Then those own every company below it.
     
  31. groebuck

    groebuck 2[H]4U

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    One day? Look at the media comoanies...
     
  32. lcpiper

    lcpiper [H]ardForum Junkie

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    Yes we do, and you just saw how it works lol.

    The man does have an entire swath of advisors you know.
     
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  33. Neo_East

    Neo_East n00bie

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    Would the purchase of AMD buy a foreign corporation be similarly blocked?
     
  34. TwistedAegis

    TwistedAegis [H]ardForum Junkie

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    This will get even more interesting, as 65% of Qualcomm's revenue comes from sales to China. So China can quite effectively counter-punch due to this ruling.
     
  35. GlowingGhoul

    GlowingGhoul Whines about Whiners

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    Yes, the Committee on Foreign Investment is required under law to review these kinds of mergers and advise the President, which they did, and he acted. I know you're really, realty desperate to get the crypto-Marxists back into office so America can resume it's managed decline, but for now, the plans and your desire to see America get the "punishment it deserves" are on hold.
     
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  36. jeremyshaw

    jeremyshaw [H]ardForum Junkie

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    China owns Singapore? China owns Broadcom, Qualcomm? What does China have to do with this?
     
  37. zzzz52

    zzzz52 n00bie

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    Broadcom is techinically a American company, but with their headquarters in SIngapore for tax purposes. Their co-headquarters are in San Jose. Their broad of directors are all American except for 1 from Germany and 1 from Singapore. And further their major shareholders are American companies and share almost similar shareholders with Qualcomm.
    Further Broadcom are going to move their headquarters to US as announce in Nov 2017 in the White House together with Trump.
    How can this be a national security when Broadcom is almost an American company? Qualcomm directors must have deep political ties, as during the "aborted" shareholders meeting, Broadcom's investor unofficially already voted in 6 of Broadcom's proxy nominated director's. Meaning the "owners" of Qualcomm rejected the management team.

    And Broadcom not spending in R&D? The 2017 figure shows that Broadcom is 3rd in the list of money spened in R&D, about 19.2% of revenue, whereby Qualcomm is 2nd, with 20.2% of revenue. So both companies are spending similar % of R&D. And FYI, Intel spend 21.2% in R&D which is also very similar in figure.
     
  38. InorganicMatter

    InorganicMatter I Don't Know How to Make Threads

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    The problem is that the wireless space has been heavily consolidated in the last decade. The Federal Government is very concerned that further consolidation would leave China with an advantage in 5G R&D.
     
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  39. TwistedAegis

    TwistedAegis [H]ardForum Junkie

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    Read the reason why this was declined, China has everything to do with this decision. We don't want them to get ahead of us with 5G.
     
  40. zzzz52

    zzzz52 n00bie

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    How is Broadcom buying over Qualcomm affect the 5G lead? Broadcom will still continue to invest in 5G as there is no logic not investing in 5G as that is the main revenue generator in the future. The 20% R&D spending is same as qualcomm. This shows that they are investing in R&D, not like what the media is portraying. If they are not investing in R&D, how can they maintain their share of components in Apple's iPhone?