BMHS Pridetime Reporter
The recent announcement that Broadcom, a semiconductor company that manufactures chips and computer components, is moving its headquarters back to the United States as a promise to help boost the economy. Trump has expressed enthusiasm for this development and has applauded the company’s CEO, Hock Tan, for making the choice to relocate.
CEO Hock Tan was born in Malaysia but attended college in America. He was offered free tuition at MIT, where he got his degree. This allowed him to go on to create the corporation that is now one of the largest producers of semiconductors in the world.
He feels that he truly has achieved the American Dream, and is deeply grateful that MIT was willing to take a chance on him by providing him with a free education. It’s this feeling that created his sense of loyalty to America, and the reason he cited in his discussion with Trump as to why he’s redomiciling Broadcom.
Tan says that most of his direct managers, and 90% of his shareholders, are American and that he, too, is American. Therefore, he has a vested interest in America’s economy, and in creating jobs for American people. He promised that Broadcom will “[create] high-paying tech jobs similar to the ones held today by my coworkers.”
However, there are certainly a number of other reasons for him to return Broadcom to its country of origin, including tax benefits. With Trump’s new tax proposal, the corporate tax rate would decrease from 35% to 20%, Broadcom would receive a huge tax cut. Considering that Broadcom moved to Singapore for tax breaks, it’s no wonder that it’s returning once America’s taxes would be more favorable.
Broadcom has announced that its new headquarters will be in Delaware, which boasts the legal homes of roughly 66% of publicly-traded American corporations. This is because of Delaware’s lack of state taxes on companies that don’t do business inside the state boundaries. On top of all that, some of Broadcom’s tax breaks from Singapore will end in 2021, adding extra incentive to return to the U.S.
The CFIUS has an intense vetting process for business acquisitions of U.S. properties by foreign companies, which Broadcom is currently undergoing. This has delayed the merger. However, once Broadcom moves back the United States, the CFIUS would no longer be involved, and the merger could continue uninterrupted.
While Broadcom is best known for its semiconductors -- used in smartphones, tablets, and routers -- it also produces cable boxes, smartphones, and other wireless devices. As one of the top producers of semiconductors, it competes with companies like Qualcomm, Intel Corporation, Samsung, and Cisco Systems.
Broadcom’s return to the United States will do the country’s economy good; Broadcom is a $100 billion corporation and will be bringing with it an annual revenue of $20 billion, according to Hock Tan. He announced that Broadcom would be investing over $3 billion per year in research and engineering and $6 billion per year in manufacturing.
With its return to America, the country will boast yet another of the largest semiconductor companies, possibly gaining an edge in the modern era of technology.
Broadcom’s return to the United States is certainly something for the business world to look forward to. It shows that Trump’s plan to reduce corporate taxes may actually work in galvanizing originally-American companies to return, and helps bring much-needed jobs and revenue to the country.