Broadcom to U.S.: Don’t Worry, We’ll Make American Tech Great Again

Broadcom promised Wednesday to make the U.S. a global leader in new 5G networks in hopes of easing government fears that its hostile takeover of Qualcomm would derail America's mobile technology leadership.

The pledge came after the multi-agency Committee for Foreign Investment in the U.S. (CFIUS) said on Monday that it's concerned Broadcom would slash research and development spending on vital wireless technologies should it acquire Qualcomm -- handing mobile leadership to China.

"Broadcom will not only maintain the R & D resources Qualcomm devotes to 5G and innovation in future wireless standards -- we also will focus R & D spend to those critical technologies that are essential to the U.S.," the company said in a statement.

The company also said it would create a $1.5 billion fund to train and educate engineers in the U.S. "This will ensure America's lead in future wireless technology," the company said.

Qualcomm declined to comment.

Since 5G networks are expected to begin rolling out in 2019, Broadcom's pledge to maintain R & D spending comes after most of the difficult, fundamental research is finished, said Jim McGregor, principal analyst with technology consulting firm Tirias Research.

"5G is coming out next year. It is already done," he said. "So what did Broadcom just commit to? They committed to investing in 5G for 12 months."

Qualcomm has been investing in 5G for a decade.

"It is not the 5G investment that the U.S. government should be concerned about," said McGregor. "It is 6G, 7G or whatever comes next."

Qualcomm spends about 25 percent of its revenue on R & D -- averaging $5.4 billion a year over the past three years.

Broadcom spends less -- about $3.3 billion last year -- or 19 percent of revenue.

Broadcom invests differently than Qualcomm, said McGregor. While Qualcomm makes long-term bets to invent new technologies such as 5G,...

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