The deal would have created the world's No. 3 semiconductor company with a leading market share in smartphones, vehicle electronics and industrial internet devices.
Broadcom, which had pledged to move all its headquarter functions to the USA if it won the day, said it "strongly disagreed" with the reasoning behind the decision.
And the US government has already been actively blocking Huawei's USA ambitions, including pressuring AT&T (NYSE:T) from carrying Huawei smartphones just prior to the planned CES 2018 announcement of that deal.
But there may be more to the decision than just Broadcom. It will also weaken the position of the U.S. and Huawei will take a leading position, according to a Bernstein chip analyst, named Stacy Rasgon.
Tan bought California-based companies Broadcom for $37 billion in a leveraged deal in 2015 and Brocade Communications in a $5.5 billion deal two years later.
For Qualcomm, now that the distraction of the attempted Broadcom takeover has played out, it's time to deal with its long list of challenges, including regulatory battles, a long and costly legal fight with Apple Inc.More news: Chemical industry slams Trump steel tariffs
Intel didn't immediately respond to a request for comment. Broadcom could have also been seen as a plant, putting the country in a position like China, which exercises caution about which US-based chips it uses. The company spurned multiple bids from its rival, the most recent of which was $121 billion, or $82 per share.
Broadcom is in the process of moving its legal headquarters from Singapore to the US, with the company planning on finishing the move by April 3, 2018.
Last week, the CFIUS started analyzing the proposed merger, and found serious issues that may hamper the development of next generation wireless technology - 5G - and make the United States information grid subject to Chinese spying and sabotage.
It fended off antitrust concerns around the globe over its intellectual property strategies, taking the biggest share of wireless royalties in the 3G and 4G eras and getting a head start on next decade's 5G era, which promises to embed wireless connections in cars, factories, homes and cities.
The White House letter doesn't lay out specifics about why Broadcom integrating with Qualcomm would be considered a risk to national security, but analysts have tied it to lack of innovation and product development on Broadcom's part. The deal between Qualcomm and NXP is nearing. Xilinx has a market value of $20-billion and Mellanox is just under $4-billion.
The Committee on Foreign Investment in the United States (CFIUS), which regulates foreign investment, said that it was investigating "the risks associated with Broadcom's relationships with third party foreign entities", and the "national security effects of Broadcom's business intentions with respect to Qualcomm".
Trump's order gives Broadcom few options other than to drop its bid, said Macquarie Securities analyst Srinivas Pajjuri. While Qualcomm could go to court after shifting its headquarters, effectively challenging the national security aspect of the case, the deal would still be subject to oversight from the U.S. Department of Justice, which could oppose it on anti-trust grounds.