US President, Donald Trump, issued an official order Monday, March 12, 2018, to block the efforts of the merger of chip makers Broadcom and Qualcomm. Trump felt the need to do so to protect national security. This controversial man declares that 'there is credible evidence' that Singapore-based Broadcom has plans to take over Qualcomm to 'do things that threaten the national security of the United States'.
Broadcom has been trying to buy Qualcomm for the past few months, but this effort has been unsuccessful. Broadcom even tried to send its people to the position of Qualcomm's board of directors in order to facilitate the transaction, but this effort was smelled by the President of America. Trump firmly states that Broadcom is not allowed to buy or merge with Qualcomm in any way and that people from Broadcom submitted to the Qualcomm board are all ineligible.
Broadcom itself has realized that Trump and the Department of Justice have tried to block the merger and try to avoid it. Trump itself has several times stopped companies owned by China who attempted to buy Qualcomm last September.
Broadcom is currently in the process of moving its headquarters from Singapore to the US, according to Bloomberg, and plans to complete the transition on April 3. With this move, Broadcom seems to be preparing to 'fight' against Trump. In the company's official statement, it was stated that "US National Security is not something to worry about because Broadcom never attempted to have Qualcomm before completing the company's base transfer to the US".
Analysts do not dare to estimate whether Broadcom's efforts can go smoothly because Trump's order clearly states that 'these two companies are banned from merging forever', indicating that Broadcom's move to the US will not make a difference.
Broadcom's unlikely purchase of this Qualcomm brings a positive influence for Microsoft who was concerned that the Always On PC project would be threatened by ownership transfer. As we know, the chips for this new Microsoft category device are made by Qualcomm and are planned to be officially sold commercially this year!