On Monday,12th March 2018, President Donald Trump obstructed a $117 billion bid to acquire Qualcomm. The Singapore-based company, Broadcom was at the receiving end of this decision. The reason for this block was based on grounds of national security.
“There is credible evidence that leads me to believe that Broadcom Limited…through exercising control of Qualcomm Incorporated, a Delaware Corporation might take action that threatens to impair the national security in the United States,” Trump wrote in an executive order on Monday.
“The proposed takeover of Qualcomm by the purchaser is prohibited, and any substantially equivalent merger, acquisition, or takeover, whether affected directly or indirectly, is also prohibited,” the order added.
In July 1985, seven industry veterans came together to discuss an idea and outline a plan that has evolved into one of the telecommunications industry’s greatest start-up success stories: Qualcomm Incorporated. Qualcomm is an American multinational semiconductor and telecommunications equipment company that designs and markets wireless telecommunications products and services.
Broadcom Corporation was founded by professor-student pair Henry Samueli and Henry Nicholas from UCLA in 1991. It is a diversified global semiconductor leader built on 50 years of innovation, collaboration and engineering excellence.
Trump’s order came shortly after the Committee on Foreign Investment in the United States (CFIUS) said in a letter to both companies that the deal posed national security concerns. CFIUS noted that Broadcom had violated its rules “on at least three separate occasions,” including when it recently moved to relocate its headquarters to the United States without providing proper notice to the committee.
Many would wonder how President Trump’s decision affects Africa. The key lesson here is this: Africa should empower local providers to deliver a large portion of sensitive aspects of our technology stack. The era where foreign entities are employed to work on core technology infrastructure should be thing of the past.