Telecommunications supplier Qualcomm Inc. tumbled on Tuesday after President Trump blocked its $117 billion takeover by Singapore-based Broadcom, a deal the government feared would cost the U.S. its edge in developing fifth-generation wireless networks.

Broadcom's comments on the proposal, which it planned to take directly to shareholders after a management rebuff, indicated it might employ a private-equity approach, cutting Qualcomm's investment in building new technology to generate as much short-term profit as possible, the Treasury Department's Committee on Foreign Investment in the U.S. said in a letter to the two companies.

That would erode Qualcomm's competitive advantage in developing so-called 5G networks, which are expected to supply cellular connections with speed and power that's available now only through hardwired connections or WiFi networks, the committee wrote. Consequently, China could outpace the U.S. in mastering the technology, which will power such advances as autonomous cars and digitally enhanced factories, the committee said. That would have "substantial negative national security consequences," the panel said.

Broadcom's history gave the government good reason to worry, Angelo Zino, a senior analyst at CFRA Research, told the Washington Examiner.

The firm has "historically been in the business of acquiring companies and extracting shareholder value by selling certain pieces of the business," he said. "The last thing the U.S government wanted to see was Qualcomm being torn apart or to not have the Qualcomm of old. The U.S. wanted Qualcomm at its best."

While the committee said many of its other concerns were classified, those that aren't include Qualcomm's defense contracts, its work with the U.S. government on developing cybersecurity for the Internet of Things and its dominant role in mobile technology, fueled by investment in research.

The committee, known on Wall Street and in Washington by its acronym, CFIUS, began reviewing the deal at Qualcomm's request shortly before a scheduled shareholder vote on Broadcom's offer, which was first tendered last November.

Qualcomm didn't comment on the decision beyond announcing that its executives had received Trump's order. Shares in the San Diego-based firm fell 5 percent to $59.70 in New York trading on Tuesday, taking their decline this year to 6.8 percent.

Broadcom, meanwhile, said it "strongly disagrees" with Trump's conclusion, which was reached under Section 721 of the Defense Production Act of 1950, a provision that gives the White House authority to block foreign purchases of U.S. companies when they pose national security concerns.

With Trump's order, the U.S. blocked Broadcom's six nominees from standing for election to Qualcomm's board, a move that would have ensured approval of the deal. The government also pre-empted a maneuver by the would-be acquirer to reincorporate in the U.S., which would have taken the matter out of CFIUS's jurisdiction.

"This decision is based on the facts and national security sensitivities related to this particular transaction only and is not intended to make any other statement about Broadcom or its employees, including its thousands of hard-working and highly skilled U.S. employees," Treasury Secretary Steve Mnuchin said.

Before the announcement, Broadcom CEO Hock Tan had attempted to assure the U.S. that he appreciated the committee's role -- and that the deal wouldn't impact U.S. standing in 5G development.

With more than half its workforce based in the U.S. and shareholders who include many of the institutional investors behind Qualcomm, Broadcom is essentially an American company already, Tan wrote in a letter to members of Congress.

"We are fully committed to making the United States the global leader in 5G by focusing resources and strengthening leadership in this area," he said, promising to invest an additional $3 billion a year in research and $6 billion in manufacturing. "Any notion that a combined Broadcom-Qualcomm would slash funding or cede leadership in this area is completely unfounded."