The letter continued, explaining that, "given well-known USA national security concerns about Huawei and other Chinese telecommunications companies, a shift to Chinese dominance in 5G would have substantial negative national security consequences for the United States". The order came a week after the Committee on Foreign Investment in the USA, or CFIUS, expressed concern that the takeover of Qualcomm by Singapore-based Broadcom could leave the U.S. behind when it comes to mobile technology.
The Treasury Department hasn't responded to a media request by Observer.
However, an Intel-Broadcom combination appears unlikely, especially after Trump's executive order, Ellis said.
Industry analysts formed a seemingly farfetched theory: The U.S. government fears that, if the merger is completed, Broadcom would slowdown Qualcomm's research spending in 5G and therefore give Chinese tech firms, particularly smartphone maker Huawei, an edge in the competition.
Treasury Secretary Steven Mnuchin, who chairs CFIUS, said: "This decision is based on the facts and national security sensitivities related to this particular transaction only and is not meant to make any other statement about Broadcom or its employees, including its thousands of hard working and highly skilled United States employees".
The Trump administration nevertheless balked at the prospect of a prominent USA 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.
Huawei is also Qualcomm's main rival when it comes to developing technology for the emerging 5G standard. AT&T, reportedly under political pressure, dropped out from a deal with Huawei at the last minute to distribute Huawei's new Mate 10 Pro phones in the U.S.
"Semiconductor technology and companies like Qualcomm will be an important weapon in that 5G arms race [and] the U.S. like other nations and regions want to be first", Morales told the BBC. Since it was reprimanded in early 2015 by the local authorities over its licensing practices, Qualcomm has put in place a series of technology and licensing deals with a string of China's leading device makers.
Trump said that his decision was based partly on recommendations made by the Committee on Foreign Investment in the United States (CFIUS), an inter-agency committee headed by the US Treasury Department that investigates "transactions that could result in control of a USA business by a foreign person".
The decision didn't come as a surprise. CFIUS tends to step in only after a deal is struck and has to go through regulatory review. The deal had been under scrutiny from regulators and others, and would have seen the Singapore-based Broadcom officially take over the US -based Qualcomm. The company also added that the agency had formerly evaluated and cleared its purchase of Brocade in November past year and it is at the close of that transaction that Broadcom had agreed to redomicile to the US.
Singapore became Broadcom's legal home two years ago after it was sold to Avago, a company that once was part of Silicon Valley pioneer Hewlett-Packard. According to the CFIUS, if Qualcomm was bought over by Broadcom, it would result in cutting the costs of Qualcomm and it would not be able to compete with Huawei or other Chinese companies. However, with this order, not only can Broadcom not acquire or merge with Qualcomm but all of the people that it proposed for seats on Qualcomm's board stand disqualified.