In­dus­try caught off guard af­ter Trump scut­tles tech deal

Jamaica Gleaner - - FINANCE -

THE DE­CI­SION by Pres­i­dent Don­ald Trump to scut­tle a hos­tile takeover by Sin­ga­pore’s Broad­com of the United States chip­maker Qual­comm caught some on Wall Street off guard.

Shares of Qual­comm slid more than four per cent i n early trad­ing Tues­day.

In­dus­try an­a­lysts spec­u­late that Qual­comm’s ad­vanced work on 5G tech­nol­ogy, which is ex­pected to pro­vide speeds needed to fuel the ‘in­ter­net of things’, was the rea­son.

Trump said late Mon­day that a takeover of Qual­comm would im­peril na­tional se­cu­rity, end­ing Broad­com’s US$117-bil­lion buy­out bid.

Chris Caso, an in­dus­try an­a­lyst with Ray­mond James, pointed out how brief the re­view of the deal was by the US Com­mit­tee on For­eign In­vest­ment, and how rare it is for a US pres­i­dent to in­ter­vene.

Kevin Cas­sidy, an in­dustr y an­a­lyst with Stifel Ni­co­laus, said Qual­comm is well ahead of for­eign and do­mes­tic com­peti­tors in 5G tech­nol­ogy, giv­ing that as a lead­ing rea­son for the ex­ec­u­tive ac­tion from the White House.

GOP Se­na­tor Rob Port­man of Ohio said he was not sur­prised by Trump’s ac­tions.

“Given the Chi­nese in­flu­ence at least, and own­er­ship, to a cer­tain ex­tent, of Broad­com, and their in­ter­est in get­ting some of this 5G tech­nol­ogy, it is a na­tional se­cu­rity is­sue, so I think that it’s ap­pro­pri­ate that CFIUS look at it,” Port­man told CNBC in an early in­ter­view Tues­day.

Al­though its name isn’ t widely known out­side the tech­nol­ogy in­dus­try, Qual­comm is one of the world’s lead­ing mak­ers of the pro­ces­sors that power many smart­phones and other mo­bile de­vices. Qual­comm also owns patents on key pieces of mo­bile tech­nol­ogy that Ap­ple and other man­u­fac­tur­ers use in their prod­ucts.

“We’ve got to wake up and re­alise that China, Rus­sia and other com­peti­tors are out there con­stantly try­ing to get tech­nol­ogy,” Port­man said.

Qual­comm is f end­ing off al­le­ga­tions in com­plaints filed by Ap­ple and gov­ern­ment reg­u­la­tors around the world that it has abused the power of its mo­bile patents to throt­tle com­pe­ti­tion and charge ex­ces­sive roy­al­ties for its tech­nol­ogy.


In this Thurs­day, April 27, 2017 photo, vis­i­tors look at a dis­play booth for Qual­comm at the Global Mo­bile In­ter­net Con­fer­ence in Bei­jing.

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