"The proposed takeover of Qualcomm is prohibited, and any substantially equivalent merger, acquisition, or takeover, whether effected directly or indirectly, is also prohibited", the president said in an order issued Monday.
The Trump administration nevertheless balked at the prospect of a prominent us chipmaker being owned by a foreign company, particularly at a time countries around the world are gearing up to build ultra-fast "5G" mobile networks that could tip the balance of power in technology.
A CFIUS investigation of the proposed acquisition so far has "confirmed" national security concerns earlier identified by U.S. officials, according to the letter.
The semiconductor industry is racing to develop chips that power so-called 5G wireless technology, allowing the transmission of data at faster speeds. Broadcom, a Singapore-based company, has been attempting to nab Qualcomm for months, something the latter company has been resistant to.
Yet the unsolicited takeover bid was just the most immediate in a long list of challenges for Qualcomm, which also include legal disputes with customer Apple Inc, a decline in profit and a regulatory assault on its licensing business, all of which have eroded faith in Chief Executive Officer Steve Mollenkopf.
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The committee had warned that "a shift to Chinese dominance in 5G would have substantial negative national security consequences for the United States".
Under the order, the Trump administration cites concerns that a Broadcom takeover of Qualcomm could "impair the national security of the United States".
It the second time in recent weeks the President has raised "national security" in trade related matters, having said it was central in his decision to impose hefty tariffs on imported steel and aluminium. The company must stop the acquisition together with Broadcom and provide written proof of this once the step has been taken.
Though Broadcom is based in Singapore, the principal worry rests with China.
That was just the fourth time in a quarter century that a USA president stopped a foreign takeover of an American firm on national security grounds.
The Treasury Department said last week in a letter to lawyers involved in the deal that Qualcomm was trusted by the USA government and cited Huawei as a competitive threat in the development of 5G, which is a telecommunications standard that will allow for faster transfer of data.
The presidential decision to block the deal can not be appealed. It is not clear what rules Broadcom would have to follow if it goes ahead with announced plans to move its headquarters to the United States. In its previous response to the CFIUS injuction, the company said "Broadcom has a successful 50-year heritage of building leading communications technologies including Wi-Fi, broadband access, network switching and routing".