Broadcom and Qualcomm Merger Blocked by Trump

President Donald Trump has blocked the merger of Qualcomm and Broadcom, citing national security. More specifically, the order says that there is evidence that if Singaporean business Broadcom took over US-based Qualcomm, that the company may have the potential to impair the national security of the United States through its actions.
Although it’s not uncommon for a President to block a merger, the language used by Trump certainly is odd. Again, referring to the order:
“The companies should permanently abandon the proposed takeover.”
Meanwhile, Broadcom seems to be moving ahead as if nothing had happened. The business is in the process of moving its head office from Singapore to the US and says it will continue to do so.
Additionally, Broadcom has been hedging its bets by stacking the Qualcomm board with its own team members, another common, yet potentially murky move designed to streamline an already agreed merger process. It works by enabling communication fluidity between the merging businesses, but also has the obvious benefit of having insiders to alert the other company in the event of any issues. Trump has also disallowed Broadcom’s board nominees.
The fact is that through their access to the mobile industry, a combined Qualcomm/Broadcom would have a tremendous amount of influence beyond the obvious potential monopoly that the entity could create in some areas. That influence could potentially be used to position technology assets in a disproportionate amount of devices and present the United States with a potential breach.
The process may work like this. A piece of technology is downgraded for competitive reasons – perhaps reducing costs for a major client. On the outside, this is good practice, but the downgraded component means that existing security protocols are rendered potentially useless. Should news of the new component be leaked to the right people, a potential breach of civilian and government devices could be the result.
The US government may be erring on the side of caution, but it’s hardly paranoia when businesses supplying the hardware that keeps the communication of a nation going are potentially controlled by those less favourable to certain policies.