With his swift rejection of Broadcom Ltd.'s hostile takeover of Qualcomm Inc., U.S. President Donald Trump sent a clear signal to overseas investors: Any deal that could give China an edge in critical technology will be swatted down in the name of national security.
Although Broadcom is based in Singapore, China loomed large over the U.S. government's fears about a foreign takeover of chipmaker Qualcomm. That's because Qualcomm is locked in a head-to-head race with China's Huawei Technologies Co. over which company will dominate the development of next-generation wireless technology.
"This decision hangs a huge 'not-for-sale' sign on just about every American semiconductor firm," said Scott Kennedy, who studies China's economic policy at the Center for Strategic & International Studies in Washington. "A Chinese entity doesn't need to be anywhere near a transaction now in semiconductors for the deal to be nixed."