Trump scut­tling Qual­comm deal could mean more for­eign scru­tiny

Tulsa World - - Work&money -

NEW YORK (AP) — The de­ci­sion by Pres­i­dent Don­ald Trump to scut­tle a hos­tile takeover by Sin­ga­pore's Broad­com of the U.S. chip­maker Qual­comm could sig­nal a shift to­ward stronger sec­tor over­sight.

The deal raised red flags for gov­ern­ment of­fi­cials wor­ried about ced­ing con­trol of tele­com or wire­less in­fra­struc­ture to for­eign en­ti­ties in the long run.

“These tran­si­tions come along al­most ev­ery decade or so, mov­ing to a new it­er­a­tion of tech­nol­ogy,” said Jon Erensen, re­search di­rec­tor for semi­con­duc­tors at re­search firm Gart­ner. “The gov­ern­ment is be­ing very care­ful to en­sure the U.S. keeps its lead­er­ship role de­vel­op­ing these stan­dards.”

Shares of Qual­comm slid more than 4 per­cent Tues­day.

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

Al­though its name isn't widely known out­side the tech­nol­ogy in­dus­try, San Diego-based 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 tech­nol­ogy.

Qual­comm has long been a leader in pre­vi­ous it­er­a­tions of broad­band cel­lu­lar net­work tech­nolo­gies like 3G and 4G and poured re­search and de­vel­op­ment money into de­vel­op­ing 5G tech­nol­ogy and re­lated stan­dards and prac­tices.

“We're see­ing China emerge and start to play a big­ger role in the stan­dards de­vel­op­ing process,” Erensen said. At the same time, there has been a wave of con­sol­i­da­tion in the in­dus­try, so “the di­rec­tion for the tech­nol­ogy and stan­dards has been fewer hands at this point and the stakes are big­ger.”

The Com­mit­tee on For­eign In­vest­ment in the United States, which re­views the na­tional se­cu­rity im­pli­ca­tions of for­eign in­vest­ments, had cited con­cern that Broad­com has a pen­chant for cut­ting costs, which might lead to Qual­comm be­ing less of an in­dus­try leader.

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