Broadcom Vows to Maintain Qualcomm 5G Spending as Government Review Looms
Mar 10 2018 by Desiree Burns
Broadcom's controversial $117bn bid to acquire Qualcomm is hanging by a thread after United States authorities ordered a postponement of a critical shareholder meeting.
The Singapore-based firm promised to create a US$1.5 billion fund with a focus on innovation to train and educate the next generation of United States engineers to ensure the country's lead in future wireless technology.
Broadcom sought again to soothe USA security concerns around its bid for chipmaker Qualcomm on Wednesday, saying it would stick with investments aimed at maintaining the US's leadership in 5G technology. This would ensure the country's continued leadership in future wireless technology.
Key quote: "Broadcom is committed to making the United States the global leader in 5G".
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With the aim of soothing USA security concerns regarding its Qualcomm bid, Broadcom says it will maintain the R&D resources the chipmaker devotes to 5G. Any notion that a combined Broadcom-Qualcomm would slash funding or cede leadership in 5G is completely unfounded.
The announcement comes two days after the government sent Broadcom and Qualcomm a letter outlining reservations about a potential tie-up between the two chip makers. "There is no truth to Qualcomm's argument that its anticompetitive licensing practices are needed to fund a robust R&D effort".
The New York Times reported that Broadcom appeared poised to gain seats on Qualcomm's board at this week's meeting, and Broadcom called Qualcomm's filing with CFIUS "a blatant, desperate act by Qualcomm to entrench its incumbent board of directors". "More than half of Broadcom's total workforce is in the United States, across more than 25 states, including Texas, Colorado, California and Pennsylvania", Broadcom said. Currently, it is in the finale of redomiciling to the USA and as expected the process would be completed by 6th May 2018.
Broadcom said that ninety percent of Broadcom's shareholders are in the US and they are largely owned by the same United States institutional investors that own Qualcomm.