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>> A war between two chip giants now becoming an issue of national security. Singapore based Broadcom for months has been trying to buy Qualcomm, the US semiconductor maker who's chips run much of the world's smartphones. Qualcomm has been rejecting the offers, saying they undervalue the company, but that's not stopping Broadcom.
And to get the deal done, it could forward six of its nominees for Qualcomm's 11 member board at a shareholder meeting planned for Tuesday. But the committee on foreign investment in the United States called Syphius, which reviews deals for potential national security concerns, in a surprising and unprecedented move ordered Qualcomm to delay that meeting by 30 days to investigate the deal.
Reuters Stephen Nelis explains.>> See, the United States government is concerned about so-called 5G technology, which is the next generation of mobile phone technology. It's gonna let you do things like download a huge high resolution movie in one or two seconds. The two leading companies who are making this technology are Qualcomm, which is in the United States, and Huawei, which is China.
There's a concern here that if Broadcom were to purchase Qualcomm, that, that technology could fall into hands outside of the United States.>> But is Broadcom a foreign company? Before it disclosed its plans to buy out Qualcomm in November, President Donald Trump announced Broadcom would shift its headquarters back to the US.
>> A really great, great companies.>> Broadcom said on Monday, its board and Senior Management team consists almost entirely of Americans and is largely owned by the same US institutional investors that own Qualcomm.>> So who is Broadcom? Well, this company actually used to be a small company called Avago from Asia many years ago and they brought in private equity investments.
And have been swallowing progressively larger and larger companies through merger and acquisition activity. They actually took the name Broadcom from a company that was based in the United States in California when they took it over a few years ago.>> As the resolution to this corporate battle was pushed further into the future, shares of Qualcomm and Broadcom both fell Monday while the overall market got a bump up.