By Andrew Nusca and David Meyer
March 14, 2018

Good morning. Andrew Nusca here, filling in for Alan.

Qualcomm CEO Steve Mollenkopf is surely breathing a sigh of relief this morning after news emerged late Tuesday night that rival chipmaker Broadcom will formally abandon its attempt to acquire the San Diego company.

Earlier this week—and in between, um, some management shuffles—President Trump blocked Broadcom’s $117 billion bid, citing national security concerns around 5G wireless technology in particular. A Qualcomm acquisition would have amounted to the largest technology deal in history. (Paging Michael Dell.)

There’s a clear lesson in all of this: Donald Trump is willing to go quite far to protect American companies from foreign competition, particularly in the technology sector, and particularly from China.

Wait, you ask: Isn’t Broadcom based in Singapore? True. Though more than 2,000 nautical miles separate the sovereign and spotless city-state from the Middle Kingdom, Broadcom supplies chips to Chinese telecom giant Huawei. Fears that Broadcom would wind down Qualcomm’s wireless R&D led the Committee on Foreign Investment in the U.S., or CFIUS, to warn against the deal, which in turn prompted Trump to intervene.

An interesting postscript to the deal: Broadcom will reportedly continue its plan to relocate its headquarters to the U.S., even though it will be subject to hundreds of millions of dollars in additional taxes. A small price to pay to scoop up American companies beyond CFIUS’s reach.

Lastly: R.I.P. Stephen Hawking, the renowned physicist whose A Brief History of Time taught many a businessperson to think bigger. As The Guardian put it so well: “Those who live in the shadow of death are often those who live most.”

More news below.

Andrew Nusca


You May Like