Trump builds a virtual wall to fence high tech companies in

13 March 2018 by Steve Blum
, ,

© Yann Forget / Wikimedia Commons, via Wikimedia Commons

Broadcom will not buy Qualcomm, and will not become the third largest chipmaker in the world, behind Intel and Samsung. Not because the eye watering price – $117 billion, the largest such high tech transaction ever – is too high. Not because the deal doesn’t make economic sense. It’s because U.S. president Donald Trump says it will harm U.S. national security.
Using his authority to define what national security needs are and squash transactions that threaten them, Trump categorically blocked Broadcom’s Singapore-based corporate parent and its Californian affiliate from buying San Diego-based Qualcomm.
The apparent worry is that technological and market leadership in 5G mobile chipmaking will leave U.S. shores and go overseas, to Broadcom and China-based Huawei, with the result that neither U.S. consumers or the military would be able to trust fundamental technology and products in the coming decades.
Trump didn’t pull this idea out of thin air. In February, six intelligence agency chiefs told the U.S. senate intelligence committee that people in the U.S. shouldn’t use mobile phones made by Huawei or ZTE, the number two Chinese manufacturer. According to CNBC, FBI director Chris Wray spoke for the group and said…

We’re deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don’t share our values to gain positions of power inside our telecommunications networks.

The irony is that the FBI’s values include the belief that it should have a back door to the contents of any mobile phone or computer, and its sister agency, the NSA, has spilled malware into the cyber ecosystem.
There are good reasons to wish Qualcomm remains Californian and independent, not least because companies do not become more innovative as they get bigger. Quite the contrary. But technological leadership and prosperity cannot be guaranteed by walls that keep investors and immigrants out and companies in, or by government management of the high tech economy.