Set micro-March 8 reported the face of the United States government intervention in the face of regulatory intervention, Broadcom recently said that if the success of the acquisition of Qualcomm, Qualcomm will not reduce the current R & D and operational aspects of the scale of investment will also increase the input of 1.5 billion US dollars To train American engineers so as to ensure the United States' global leadership in the field of mobile communications and to reduce the U.S. government's concern about the information security caused by the acquisition.
Broadcom has said it will fully cooperate with the investigation after the CFIUS said it fully intervened the investigation and postponed the Qualcomm annual meeting to shareholders for 30 days, in fact, a few weeks ago CFIUS submitted the materials.
In previous acquisitions, Broadcom was affixed with an 'adventurous liability acquisition, overly focused on sales and profits, while ignoring R&D investment' corporate labels. Over the past few years, compared to 20% of Qualcomm's revenue investment in innovation and In terms of operations, Broadcom’s investment in this area is only 4%. Therefore, the acquisition has triggered concerns that Broadcom only focuses on short-term interests and does not pay attention to R&D investment. Amazon, Google and other technology giants once told CFIUS that the acquisition will be a technological innovation. Have an impact.
More importantly, the U.S. government is worried that the merger will weaken the U.S. competitiveness in the field of mobile communications such as 5G. This gives Huawei and other Chinese companies the opportunity to catch up. Now China is focusing on the integrated circuit and communications industry from a national strategic perspective. Support, In the recent two sessions in China, integrated circuits were listed as the first in the real economy in the government work report.
According to sources, Broadcom, which is headquartered in Singapore, is closely associated with Chinese companies, and Qualcomm’s leading technologies in 5G are adopted by security agencies such as the Pentagon. The US government is also worried that due to the weakening of 5G competitiveness and the background of Broadcom’s overseas companies, it will give The impact of information security.
After Qualcomm’s several meetings with Broadcom, they once complained that Broadcom only paid attention to quotations, lacked sincerity in the future of Qualcomm, and seriously underestimated the value of Qualcomm.
Yesterday, Broadcom expressed its position on Qualcomm's business model, and will strengthen R&D and innovation in accordance with legitimate business practices, instead of adopting the fund investment model that Qualcomm has always adopted to guarantee R&D operations through licensing revenue.
It can be foreseen that with the intervention of US regulators, Broadcom will be pressured to respond to Qualcomm’s future, especially business models and information security, and strive for shareholder support, responding to regulatory concerns, and maximizing All parties agree. However, sources said that the full involvement of CFIUS, especially in terms of information security, will likely make Broadcom's hopes fall.