US President Donald Trump has blocked the acquisition of the Qualcomm chip manufacturer by rival Broadcom in Singapore for reasons of national security. The $ 140 billion deal would have been the largest transaction in the technology sector, according to Mediafax.
According to analysts, the takeover of Qualcomm by Broadcom would have led to the development of the world's third microchip manufacturer after Intel and Samsung. There were concerns at the American level that the transaction could have led China to progress in the development of 5G wireless technology.
The industry is in a race to develop chips for 5G wireless technology, and Qualcomm is the leader in this field, followed by Broadcom and the Chinese Huawei
Analysts say Qualcomm is highly valued for its commitment to research and development, particularly on 5G technology
Broadcom is more known for sales and growth through acquisitions, being less well performing in terms of research and development
Considering this, analysts said a deal between Qualcomm and Broadcom would have given the Chinese company Huawei the chance to take the leading position in the field for the next few years – a situation that American politicians wanted to prevent by presenting security concerns around Chinese telecommunication companies doing business with US carriers
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Analysts in the field claim that Trump's decision was more about competitiveness than about security concerns
"Given the current political climate in the US and other regions around the world, everyone has a more conservative vision of mergers and acquisitions, trying to protect their own areas," said Mario Morales, vice president of generic and semiconductor technologies at global research firm IDC, quoted by the BBC.