Broadcom's buyout of Qualcomm is likely to see even more delays

Broadcom's buyout of Qualcomm is likely to see even more delays

Broadcom's buyout of Qualcomm is likely to see even more delays

"Broadcom will not only maintain the R & D resources Qualcomm devotes to 5G and innovation in future wireless standards - we also will focus R & D spend to those critical technologies that are essential to the USA", the company said in a statement.

The committee's concern is that a reduction in Qualcomm's ability to drive 5G innovation would give Chinese companies-particularly Huawei-an advantage.

With this week's tit-for-tat with Broadcom surrounding a new investigation by a Treasury Department agency over its acquisition campaign, it should be noted that Qualcomm has also questioned if its counterpart would run its operation into the ground - Broadcom CEO Hock Tan's profit regime is known to be an especially aggressive one.

Should the acquisition happen, Broadcom said it would have more than 25,000 employees in the US.

Broadcom invests differently than Qualcomm, said McGregor. The review of Broadcom's bid illustrates the USA government's expanding focus on the competitiveness of the national semiconductor industry as China advances.

In Broadcom's increasingly contentious bid to acquire chip-making rival, 5G networking has emerged to become has drawn the attention of regulators and lawmakers overtaking other issues such as the billions that Broadcom is willing to spend on the deal and oversized influence the combined companies would have in the global technology industry. As part of the that, Broadcom also pledged to work with the United States government to achieve its 5G goals, as well as future ones. The job of CFIUS is to review acquisitions of US companies by foreign entities to assess potential national security implications. Broadcom would also not sell any critical national assets of security to any foreign companies. "Cfius ordered Qualcomm to delay its annual meeting for a month as it reviews a potential deal".

CFIUS's intervention at this early stage is rare.

The company also did a bit of chest thumping in its letter, pointing out shareholder returns have been eight times greater than that of Qualcomm's over the past five years. Broadcom has nominated six directors for election to Qualcomm's 11-member board as a way to force negotiations between the two companies.

U.S. semiconductor giant Broadcom, who has been after buying smartphone chip from Qualcomm for quite some time, is likely to have to wait even longer thanks to management opposition and United States national-security concerns.

Broadcom shares are up 0.06% to $247.10.

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