The president's order Monday blocking Broadcom's $117 billion bid for Qualcomm is the latest sign of Trump's tough stance on foreign takeovers of US technology and is part of a broader move to contain China on trade.
According to London, Trump's decision to black Broadcom's hostile takeover of Qualcomm is part of a broader strategy to ensure global US preeminence in technological innovation.
In a letter on March 5, CFIUS said that it was investigating whether Broadcom would starve Qualcomm of research dollars that would allow it to compete and also cited the risk of Broadcom's relationship with "third party foreign entities".
Qualcomm had earlier rebuffed Broadcom's bid, which was under investigation by the US Committee on Foreign Investment in the US (CFIUS), a multi-agency panel led by the US Treasury Department that reviews the national security implications of acquisitions of US corporations by foreign companies.
San Diego-based Qualcomm evolved from a USA military aerospace contractor to become the dominant player in wireless radio technology over the past two decades, with its chips used in half of all smartphones.
That panel, the Committee on Foreign Investment in the USA, known as CFIUS, said it was anxious that Broadcom would stymie research and development at Qualcomm given its reputation as a cost-cutting behemoth.
Meanwhile, Broadcom announced today that is has accelerated its timetable for redomiciling its organization from Singapore to the USA, moving up the date from May 6 to April 3. "In short, US national security concerns are not a risk to closing, as Broadcom never plans to acquire Qualcomm before it completes redomiciliation".
This is the fifth time a United States president has blocked a deal based on CFIUS objections and the second deal Mr Trump has stopped since assuming office.
Trump issued an order barring the proposed mega-acquisition, saying there is credible evidence such a deal "threatens to impair the national security of the United States", according to a White House statement. While Intel is "eager for Broadcom to fail", it could make a play for the company if the merger gained momentum, the Journal said in another report on Friday.
Broadcom shares rose 3.6% Monday to $262.84, and Qualcomm fell 0.35% to $62.81.
Mr. Trump blocked the deal in September after CFIUS said it raised national-security concerns. Broadcom's options are "not many, and not good", said Michael Gershberg, an attorney with Fried, Frank, Harris, Shriver & Jacobson LLP, who has experience with CFIUS cases.