SAN FRANCISCO — Chip maker Broadcom said it would initiate a structural change to shift the company's location where it is based from Singapore to the U.S., pending shareholder approval.
Hock Tan, Broadcom's president and CEO, credited a corporate tax reform plan being advanced by Republican lawmakers with making the U.S. a more competitive nation for multinationals to set up shop. But Broadcom said it would make the move even if no corporate tax reform comes to fruition.
"We expect the tax reform plan effectively to level the playing field for large multinational corporations headquartered in the United States and to allow us to go all in on U.S. redomiciliation," Tan said, in a press statement.
The move to reincorporate in Delaware is largely symbolic for Broadcom, which maintains about half of its global workforce in the U.S. However, the move is a boon to the Trump administration and the tax plan, and the announcement is likely to be trumpeted to further advance the reform plan.
In remarks at the Oval Office Thursday (Nov. 2), to applaud the introduction of the Tax Cuts and Jobs Act by the House Ways and Means Committee, Trump hailed the Broadcom move as significant and praised Tan. Trump said the bill would provide a "massive tax cut for American families" and simplify the U.S. tax code.
"We will restore our competitive edge by reducing business taxes for the first time in more than 30 years, and we will bring back trillions and trillions of dollars that's now parked overseas so that money can be put to work rebuilding the United States of America, as opposed to rebuilding other parts of the world," Trump said.
Tan, who also spoke at the event, said Broadcom's move to "redomicile" in the U.S. would bring in $20 billion of annual revenues into the country. He said Broadcom would invest more than $3 billion per year in research and engineering and another $6 billion in manufacturing "creating high-paying tech jobs."
Hock Tan (left) and U.S. President Donald Trump at the White House Thursday.
Last month, the Semiconductor Industry Association endorsed Trump's framework for revising the U.S. corporate tax structure, saying it would "allow U.S. semiconductor companies to continue to grow and innovate here at home."
Tan described Broadcom as "the embodiment of the legacy of innovation of three great American technology leaders: Bell Labs, Hewlett Packard, and more recently, Broadcom Corporation."
But, he added, "in eras past, when the conditions in this country made it harder for companies to compete in global markets, the intellectual property of these leading companies globalized and moved offshore."
Broadcom Chief Financial Officer Tom Krause, said in the press statement that the returns Broadcom can drive by continuing to pursue the company's growth strategy outweigh increment taxes it expects to pay by redomiciling in the U.S. "We support the tax reform plan because it is pro-growth and would allow companies like us to bring off-shore earnings back to the United States after paying an annual U.S. minimum tax on global profits," Krause added.
—Dylan McGrath is the editor-in-chief of EE Times.
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