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In a decisive move underscoring national security priorities, President Donald Trump on Friday mandated the reversal of a $2.9 million deal involving a U.S. chip manufacturer’s assets acquired by a Chinese-controlled company. This executive order reflects growing apprehensions about foreign influence in critical technology sectors.
The executive order specifically targets HieFo Corporation, a Delaware-registered entity, which the White House identified as being under the control of a Chinese national. The administration’s concerns are centered around the potential threats posed by such foreign ownership to the integrity of national security.
HieFo had previously taken over significant operations from Emcore, a New Jersey-based firm, on April 30, 2024. This acquisition included digital chip assets along with the wafer design, fabrication, and processing businesses, raising alarms within the U.S. government, which deemed it a possible risk to national security interests.
Further elaborating on the matter, the Treasury Department highlighted that the transaction also involved a semiconductor manufacturing facility, a vital component in the broader technological supply chain. This aspect of the deal particularly heightened concerns over the strategic implications of foreign control over critical infrastructure.
HieFo acquired the digital chips and related wafer design, fabrication, and processing businesses of New Jersey-based Emcore on April 30, 2024, which could “impair the national security of the United States,” the White House said.
The Treasury Department said in a separate statement that the assets also included a semiconductor manufacturing facility.
The potential diversion of the supply of indium phosphide chips manufactured by Emcore’s digital chips business away from the U.S. was also identified as a national security risk, the Treasury Department added.
HieFo and Emcore did not immediately respond to a CNBC request for comment.
The Global Times, a Chinese government mouthpiece, citing an expert, said the divestment order “reflects Washington’s anxiety over technology competition with China” as it was made without a convincing rationale.
The Treasury Department said the deal was not notified to the Committee on Foreign Investment in the United States, known as CFIUS, prompting a review by its non-notified transactions team.
“CFIUS identified a national security risk arising from the transaction relating to potential access to EMCORE’s intellectual property, proprietary know-how, and expertise,” the Treasury Department said.
HieFo was ordered to divest all acquired assets within 180 days and to immediately restrict access to Emcore’s technical information.
In a statement dated Sept. 2, 2024, HieFo said the deal would allow operations to continue at Emcore’s facility in Alhambra, California, and that it had “successfully engaged” nearly all key scientists, engineers and operational staff.
HieFo was founded by Genzao Zhang and Harry Moore through a management buyout of wafer fabrication and chip-related assets from Emcore. Both founders list their start dates at HieFo as May 2024 on LinkedIn, when the acquisition closed.
The company claimed it had inherited more than 40 years of optoelectronic innovation in indium phosphide chip manufacturing.
Emcore manufactures navigation equipment such as gyroscopes and sensors used in commercial, industrial and defense applications, including autonomous navigation and weapons systems, according to its website.
The company was delisted from Nasdaq in early 2025 following its merger with aerospace manufacturing holding company Velocity One LP in November 2024.
