How Fear of Huawei Killed $117 Billion Broadcom Deal

U.S. President Donald Trump’s unprecedented move to block Broadcom Ltd.’s hostile takeover bid for Qualcomm Inc. reflects growing concern about China’s rising economic prowess. At the heart of that decision to scupper what would’ve been the largest technology acquisition in history is Huawei Technologies Co., the world’s third-largest maker of smartphones and, by some reckonings, the biggest producer of telecommunications equipment. Trump was acting on the recommendations of the Committee on Foreign Investment in the U.S., which vets deals for national security risks. The agency suggested that the deal could curtail U.S. investments in chip and wireless technologies, handing leadership to a relatively opaque Chinese company that’s funneling billions into developing next-generation wireless systems. Broadcom plans to formally call off its acquisition attempt, people familiar with the matter have said.

The Chinese company has in three decades grown from an electronics reseller into one of the world’s most important communications companies, with leading positions in telecoms gear, smartphones, cloud computing and cybersecurity. With 2017 sales of about 600 billion yuan ($95 billion), Huawei generates more revenue than Home Depot or Boeing -- and twice as much as Broadcom and Qualcomm combined.