US President Donald Trump blocked Singaporean microchip maker Broadcom Ltd's proposed takeover of Qualcomm Inc, and said in a presidential order that there is "credible evidence" that the deal threatens national security.
Apparently, the US government agrees.
But its protests got a presidential seal of approval Tuesday, when Trump signed an executive order barring the deal over concerns that putting it under control of a company based in Asia would pose a national security threat.
Huawei's involvement in 5G technology could be inevitable because of the global collaboration required to develop the networks.
It's the second recent USA warning shot across the bow of foreign telecom makers.
It now could possibly make one more offer for Qualcomm once it completes its relocation to the US, said Zino. The real reason why the government is taking all these measures against a Chinese company is a different one: Huawei's ties with the Chinese government aren't exactly clear.
The FBI warned USA citizens earlier this year that they shouldn't buy smartphones made by Huawei.
The stakes are even higher in the 5G race.
"This deal was a bad idea from the start", said analyst Patrick Moorhead of Moor Insights and Strategy.
The deal, spearheaded by CEO Hock Tan, would have created the world's No. 3 semiconductor company with a leading market share in smartphones, auto electronics and industrial internet devices. Given a wave of consolidation in the telecom-equipment industry, fewer companies are involved "and the stakes are bigger", he said. While the change in headquarters has been in the works since late previous year, the earlier date would complete the process before a scheduled vote by Qualcomm shareholders.
"Qualcomm has become well-known to, and trusted by, the United States government", said Deputy Assistant Secretary for Investment Security Aimen Mir.
"In short, US national security concerns are not a risk to closing, as Broadcom never plans to acquire Qualcomm before it completes redomiciliation".
Blocking the deal doesn't eliminate Chinese influence on 5G development, of course.
Geely chairman Li Shufu didn't help his case among Germans when he said, speaking on a Chinese television broadcast that the investment was created to "support the growth of the Chinese auto industry" and "serve our national strategies".