Incisive analysis (as always) from Ben Thompson at Stratechery on the administration blocking Broadcom’s acquisition of rival chip-maker Qualcomm on national security grounds:
The entire issue is that the structure of the deal itself said far more clearly than anything else that Broadcom wanted to feast off of Qualcomm’s past innovations and contribute far less to future ones than Qualcomm would on its own. And, given ever-increasing Chinese dominance of wireless, that is indeed a national security problem.
Thompson goes on to point out that national security isn’t the only issue here; it’s also largely about patents, and the impetus for and control over innovation.
This is especially interesting given Apple’s relationship with Qualcomm, both in terms of their ongoing legal tiff, as well as the fact that Apple is poised to ditch any dependence on Qualcomm in future iPhones. That would probably do a number on Qualcomm’s bottom line, which is going to further complicate matters for the company if they can’t take Broadcom’s buyout offer.
—Linked by Dan Moren