As deadline looms, US-China trade war leaves fate of Qualcomm-NXP merger hanging
Sources say recent activity by Beijing indicates a positive turn for the deal, which awaits only Chinese government approval, but uncertainty remains
US chip maker Qualcomm’s long-delayed purchase of NXP Semiconductors is a US$44 billion question caught in the throes of an increasingly tense US-China trade battle.
The pursuit of the Dutch chip maker started in October 2016, and a major deadline to solidify the deal looms on Wednesday.
Qualcomm’s purchase of NXP is considered strategic as the US progresses on 5G, the next stage of technology that China is racing to dominate. Nearly 21 months later, Beijing remains the only obstacle for the deal to be finalised.
The Chinese government still hasn’t approved the merger despite it clearing the thorny antitrust hurdle last month. Eight of the nine countries – including the US and Japan – where Qualcomm does business have signed off on the deal.
The most rational thing for the Chinese government to do is to approve. But not everything is rational right now
“The deal is hung up in broader issues, that’s clear. What’s unclear is what is going to happen,” said Stacy Rasgon, a semiconductor analyst at the investment firm AllianceBernstein. “The most rational thing for the Chinese government to do is to approve. But not everything is rational right now.”