Monday, March 12th 2018

President Trump Blocks Broadcom-Qualcomm Deal Through an Executive Order

US President Donald Trump blocked the potentially-$117 billion Broadcom-Qualcomm merger through an executive order. The White House considered damning observations by the Committee on Foreign Investment in the United States (CFIUS), which had been studying potential national security implications of this merger. "There is credible evidence that leads me to believe that Broadcom Ltd. [by acquiring Qualcomm] might take action that threatens to impair the national security of the United States," wrote President Trump in the order.

Broadcom expressed shock and disbelief over the order. The company, in a statement, said that it "strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns." Qualcomm, meanwhile, battened down the hatches for any press comments. The American chipmaker had been wrestling an increasingly Broadcom-slanted board that was all but ready to sell the company to Broadcom at an undervalued price. According to data compiled by Bloomberg, the Trump administration has shot down ten similar deals since it came to power, in which foreign companies - overwhelmingly Chinese in national origin - had attempted buy out American high-technology firms. Californian Intel is still in the foray to swallow Broadcom, as CFIUS doesn't concern itself with American companies buying out foreign firms.
Source: Bloomberg
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26 Comments on President Trump Blocks Broadcom-Qualcomm Deal Through an Executive Order

#1
Xzibit
You shall not take our LED lights, money transfers nor our wireless modems.



For now. Have to wait until the next (D) administration.
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#2
eidairaman1
The Exiled Airman
Good, no monopolies
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#3
lexluthermiester
eidairaman1 said:
Good, no monopolies
Agreed. Was sure it was going to be blocked, but didn't see this coming. Regardless, this is a good thing.
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#4
GoldenX
Next day, they are brought by Intel.
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#5
lexluthermiester
GoldenX said:
Next day, they are brought by Intel.
There's already talk of Intel buying Broadcom. That would be a good thing too. However, if you're referring to Intel buying Qualcomm, that would likely be blocked as it would create a massive antitrust problem. Broadcom not being HQ'd in the states, theres not a real problem here with that kind of buyout/merger though even that could be blocked for similar reasons.
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#6
CheapMeat
One of the few things I hope most folks agree with, even non-techies. It's insane how many mergers & acquisitions have gone on, consolidating so much. Like others mentioned, I hope an Intel buy gets blocked too.
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#7
RejZoR
GoldenX said:
Next day, they are brought by Intel.
Which I also hope it won't happen. Just look what happened to graphics market after we were left with just 2 players. It sucks majorly.
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#8
lexluthermiester
RejZoR said:
Just look what happened to graphics market after we were left with just 2 players. It sucks majorly.
We have some of the most amazing GPU's ever created that can push realism to seriously excellent and amazing levels. How does that suck? Besides, there are more than just two players. In the mobile market, arguiblity the largest market on the planet, Nvidia and AMD are effectively absent. The most common GPU on the planet, by the numbers, is the Mali series by ARM, followed closely by Intel.
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#9
Valantar
eidairaman1 said:
Good, no monopolies
Until Intel buys Broadcom, that is, and subsequently buys Qualcomm as well. Suppose they would stop minding at that point, seeing how Intel is (somewhat) American.
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#10
RejZoR
lexluthermiester said:
We have some of the most amazing GPU's ever created that can push realism to seriously excellent and amazing levels. How does that suck? Besides, there are more than just two players. In the mobile market, arguiblity the largest market on the planet, Nvidia and AMD are effectively absent. The most common GPU on the planet, by the numbers, is the Mali series by ARM, followed closely by Intel.
Yeah, unobtainable GPU's for 900+ € are really awesome yo. And when one vendor (out of only two) cannot provide competing product, the other one slams ridiculous prices on their products. That's why. If there was 3rd or 4th player in GPU market (real discrete one, not integrated nonsense from Intel or mobile Mali), there would still be competition among those "lesser" 3 vendors. But because we only have 2, it sucks. This is why we constantly screech it's bad when mergers within same field are done. The situation with AMD and ATi was a bit different. AMD only made CPU's, ATi only made GPU's. With merger, nothing really changed on the market, in fact opposed happened with introduction of APU's that pushed everyone to make better integrated graphics (otherwise Intel would still be integrating their useless crap).
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#11
Dia01
I wish our government would have the balls to do similar here in Oz
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#12
Valantar
RejZoR said:
Yeah, unobtainable GPU's for 900+ € are really awesome yo. And when one vendor (out of only two) cannot provide competing product, the other one slams ridiculous prices on their products. That's why. If there was 3rd or 4th player in GPU market (real discrete one, not integrated nonsense from Intel or mobile Mali), there would still be competition among those "lesser" 3 vendors. But because we only have 2, it sucks. This is why we constantly screech it's bad when mergers within same field are done. The situation with AMD and ATi was a bit different. AMD only made CPU's, ATi only made GPU's. With merger, nothing really changed on the market, in fact opposed happened with introduction of APU's that pushed everyone to make better integrated graphics (otherwise Intel would still be integrating their useless crap).
Sadly, massive corporate mergers have been the name of the game for the last three or four decades, ever since the US decided that wholesale deregulation and a hands-off approach to ensuring "free" competition was a good idea. Now we're at a point when no-one dares say that this well-established policy is bad for both people and businesses, as that'd lose them corporate campaign funds. The FTC is frighteningly ineffectual, and this news is just saying "we're okay with monopolies, but only if they're our monopolies". The EU is trying to be slightly more hands-on, but can barely be said to be so, and is plagued by a scary slow court system.

Despite what quite a few techies seem to think, corporations are not our friends. At best, they can provide things we want or need for acceptable prices, while also providing jobs for people. At worst - and far more realistically - they exist to get as much money out of consumers as possible, while avoiding their societal responsibilities (taxes and so on) to the largest extent possible. Profit-first corporations are the biggest moochers out there, and we desperately need effective regulation and policing to keep them in check, as they show us time and time again that if they can, they'll screw us over.

To get back on track: if the FTC was effective, it would never have allowed Intel, Nvidia, Qualcomm, or any other dominant chip maker to grow as dominant as they are. In the mid-20th century, market shares like that meant that the company might be forced to split into two separate entities to maintain competition. That's definitely a drastic measure, but it would ensure competition, and likely wouldn't hinder progress or development much at all.
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#13
DeathtoGnomes
I wonder what national security issues there are that forced this block.
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#14
Dartenor
I like very much this move, don't get me wrong, but where are now all the talks about the "free market" being the god that drives american economy?
It seems to me that Trump is the least "free market" president in the last years blocking deals, adding tariffs, etc...
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#15
DeathtoGnomes
Dartenor said:
I like very much this move, don't get me wrong, but where are now all the talks about the "free market" being the god that drives american economy?
It seems to me that Trump is the least "free market" president in the last years blocking deals, adding tariffs, etc...
please leave your ignorant politics at the door.
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#16
TheinsanegamerN
DeathtoGnomes said:
I wonder what national security issues there are that forced this block.
My educated guess: Qualcomm is the only maker of CDMA radios, used on verizon and sprint phones. Verizon phones are very popular with the US government.

In addition, they are the only US chipmaker left in the phone market. Mediatek is chinese, so is helios, so are the other no name brands used (I am sure there is another major chinese brand I am unaware of.)

From the US's standpoint, if qualcomm was bought by broadcomm, every future US government phone would have a chinese radio, with Chinese firmware, in it. That is a recipe for disaster. There would be 0 security at the federal level, on just about anything. Secret service, aides, DoD members, even the president himself, could all be eavesdropped on with no real way of preventing it, if the chinese wanted to. With qualcomm, at least the US has a chipmaker they can use, and subsequently review the code of.

Same reason crucial cant be bought by the chinese, the US government needs a source of flash storage that isnt controlled by the chinese (and chinese firmware).

lexluthermiester said:
We have some of the most amazing GPU's ever created that can push realism to seriously excellent and amazing levels. How does that suck? Besides, there are more than just two players. In the mobile market, arguiblity the largest market on the planet, Nvidia and AMD are effectively absent. The most common GPU on the planet, by the numbers, is the Mali series by ARM, followed closely by Intel.
One side sitting on their laurels twittling their thumbs due to lack of competition, the other side producing non-competitive garbage, and GPUs hitting rediculous prices?

How does that NOT suck? There is no competition, there is nvidia and there is AMD's table scraps. We havent had competition since the 7000/200 series.
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#17
Markosz
Oh, so this is the land of 'freedom', where you are not allowed to sell your own company?
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#18
DeathtoGnomes
Markosz said:
Oh, so this is the land of 'freedom', where you are not allowed to sell your own company?
are you trying to be ignorant for a reason or are always this stupid? When it comes to national security as explained in the post prior to yours, there are conditions that need to be met especially when it comes to publicly traded companies.
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#19
lexluthermiester
RejZoR said:
Yeah, unobtainable GPU's for 900+ € are really awesome yo. And when one vendor (out of only two) cannot provide competing product, the other one slams ridiculous prices on their products. That's why.
TheinsanegamerN said:
One side sitting on their laurels twittling their thumbs due to lack of competition, the other side producing non-competitive garbage, and GPUs hitting ridiculous prices? How does that NOT suck? There is no competition, there is nvidia and there is AMD's table scraps. We havent had competition since the 7000/200 series.
Those are opinions. The ridiculous prices have little to do with the companies producing the cards. As for the competition point, years of benchmarks show back and forth on varying levels saying otherwise.
DeathtoGnomes said:
are you trying to be ignorant for a reason or are always this stupid?
Hey, be nice. Let's not provoke the mods..
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#20
trparky
This is the first smart thing he's done during his whole presidency.
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#21
Owen1982
I hope Singapore blocks the sale of Broadcom. Broadcom makes alot of good stuff. Intel would swallow it and kill it. I wonder if there would be another Raspberry Pi if Intel bumps up the price of the rebranded SoC. Or all the router SoCs and Wireless chipsets. All the 'LSI' RAID/HBA Cards. What then? NOTHING GOOD FOR US. I can tell you that.
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#22
RuskiSnajper
Xzibit said:
You shall not take our LED lights, money transfers nor our wireless modems.



For now. Have to wait until the next (D) administration.
So you want only one company making the chips in all Routers and network gear , you crazy man?

Ofcourse that's the crazy ideology, you can have your own country on Mars and have Broadcom do your dinner and Google do your laundry if you wish, we say no thanks.

Atheros is the other big chip OEM in consumer Routers, but Atheros was acquired by Qualcomm, the other big one in consumer networking is Realtek but Realtek is almost a monopoly in a lot of other smaller cheaper things already. Come on people, this is very good news!

There are these groups all over different topics on the internet which are people who don't really use anything but spend more time living on the internet being basically some kind of sports fans for various companies, the NeoGAF forums comes to mind where a group of people would spend most of the time discussing and cheering about these parasitic companies and how they dominate and how they conquer everything, these are delusional poor basement dwellers that have no idea how stupid they are and are unfortunately generating a lot of internet buzz in various ways and also creating a huge perception of "what the internet thinks", it's an incredibly primitive activity of very bored people, very similar to how average football fans talk in bars all day being half drunk, it took me some years of confusion until I finally got it, that's where all the console wars come from, it's a big football match, those people simply picked a company as if it was their football team, it's about the success of a team and only that, and ofcourse the context of what "success" means is all a standard skewed perception of what an average person would think success is, money, drugs, hollywood, fame, everything arrogant and greedy, and that's exactly why they don't even know the events going in the world and sorrounding this case, would still support a corporate merger by default, they just want a team to win, Broadcom in this case, it's like a game to them.

This block is just one little thing in a big plan, there's a lot more reasons than just natsec, but those reasons might have not been enough to lawfully do this, that's why they're unstated, but unlafwully because it's the law that's not good enough, there is absolutely nothing good for an average citizen when two large corporations merge, and if mergers are allowed without unrestrain you'll end up with one company basically ruling the whole planet because that's how the system is set up, it's mathematical, it's bound to happen.

If Broadcom and Qualcomm merge, is every American going to get a free hamburger? A free ride in an F-22 jet fighter ? A free ride to the moon ? Nope
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#23
StrayKAT
CheapMeat said:
One of the few things I hope most folks agree with, even non-techies. It's insane how many mergers & acquisitions have gone on, consolidating so much. Like others mentioned, I hope an Intel buy gets blocked too.
It should happen more in the non-tech world actually. Media, food stuff, etc..
Posted on Reply
#24
Manoa
hang on you guys before you say it is a good thing.. yes in principle and on it's own this is a good thing, but you have to remember that amerika has big debt to china and incidents like this only make their relationship worse, so while yes this is good for amerika and good for customers for more competition, it can make china more aggressive and could increase tension between them
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#25
StrayKAT
Manoa said:
hang on you guys before you say it is a good thing.. yes in principle and on it's own this is a good thing, but you have to remember that amerika has big debt to china and incidents like this only make their relationship worse, so while yes this is good for amerika and good for customers for more competition, it can make china more aggressive and could increase tension between them
China is remarkably patient and not aggressive on the world stage (not like they are against their own populace). I think even the recent development with Kim Jong Un wanting to meet Trump is due to the Chinese, who are probably getting sick of the trouble. And for a rising world power, they have relatively few nukes...less than France and UK, let alone Russia and the US. Which should say something about their overall strategy in other affairs. They just have it for deterrence. Not for dick swinging. I think people should worry a little less about what China thinks. Or at least, test it.
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