Broadcom Pledges To Make US the Global Leader in 5G
- Author: Tracy Klein Mar 10, 2018,
Mar 10, 2018, 1:02
"Consistent with our commitment, Broadcom is pledging to create a new $1.5 billion fund with a focus on innovation to train and educate the next generation of engineers in the U.S. This will ensure America's lead in future wireless technology".
The previously undisclosed requirement shows that the Committee on Foreign Investment in the United States (CFIUS), which reviews foreign acquisitions of USA companies for potential national security risks, is aware that its jurisdiction could be contested if Broadcom redomiciles to the United States.
The news of further delays comes after months of to-and-fro, with Qualcomm board of directors unanimously rejecting Broadcom's acquisition proposals to acquire all of the firm's outstanding shares on several occasions.
Since 5G networks are expected to begin rolling out in 2019, Broadcom's pledge to maintain R & D spending comes after most of the hard, fundamental research is finished, said Jim McGregor, principal analyst with technology consulting firm Tirias Research.
Broadcom invests differently than Qualcomm, said McGregor.
"The bottom line is that a combined, American Broadcom-Qualcomm will be a more focused and stronger champion for sustained United States leadership in 5G than a standalone Qualcomm, an outcome that strongly supports America's national security interests", Broadcom stated in its letter.
"It is not the 5G investment that the US government should be concerned about", said McGregor.
That meeting was rearranged from the 6th March, after the US Treasury Department ordered a 30-day postponement this week, to fully evaluate any potential national security threats raised by the takeover.
"We are aware of the terms in the (CFIUS) order and are in full compliance", a Broadcom spokeswoman said by email when asked whether the company had given CFIUS the required five-day notice on action to redomicile. But the company is in the process of moving its headquarters to the US, which it expects to complete in May.
CFIUS's intervention at this early stage is rare.
Among CFIUS's key concerns is Broadcom's "private equity style" business approach of cutting long-term R & D to boost short-term profits.
Broadcom has a message for USA regulators: We'll make 5G technology a priority and invest in America if you let our bid for Qualcomm go through. Broadcom's dipped $3.91 at $247.05.