SAN DIEGO — Singapore-based chip maker Broadcom announced officially withdrew its offer to buy San Diego-based Qualcomm on Wednesday, two days after President Donald Trump issued an executive order blocking the proposed takeover, citing national security concerns.
Federal regulators last week ordered a delay in a vote by Qualcomm stockholders over the proposed sale, with some members of Congress expressing concerns about a foreign interest controlling a domestic firm that performs “sensitive work” on behalf of the U.S. government.
Trump’s order echoed that concern, saying a takeover by Broadcom “threatens to impair the national security of the United States.”
“Although we are disappointed with this outcome, Broadcom will comply with the Order,” the Asian company said Wednesday.
Although Broadcom is incorporated and based in Singapore, CEO Hock Tan announced late last year while visiting Trump at the White House that the company would return its corporate headquarters to the United States, likely using San Jose as a base.
Buying Qualcomm would have make Broadcom the third-largest chip maker, behind Intel Corp. and Samsung Electronics Co. The combined business could have become the default provider of a set of components needed to build each of the more than 1 billion smart phones sold every year.
The company’s hostile takeover attempt came at a vulnerable time for Qualcomm, which has been embroiled in a long-running legal dispute with Apple and is facing several large fines from governing bodies across the globe, including a $1.23 billion fine recently levied against the company for breaking the European Union’s antitrust laws. Qualcomm said it would challenge that fine.
Qualcomm is one of the San Diego area’s largest private employers, and the family of co-founder Irwin Jacobs is one of the area’s most generous philanthropists.