Key Points
- President Trump ordered a company controlled by a Chinese national to unwind a U.S. chip asset deal on national security grounds.
- U.S. officials flagged risks tied to chip intellectual property, technical expertise, and indium phosphide supply chains.
- The move underscores tougher scrutiny of foreign tech deals as U.S.-China tensions intensify.
U.S. President Donald Trump on Friday ordered a company controlled by a Chinese national to unwind a $2.9 million acquisition of U.S. semiconductor assets, citing national security concerns.
In an executive order, the White House said HieFo Corporation—incorporated in Delaware—was “controlled by a citizen of the People’s Republic of China.”
The order targets HieFo’s April 30, 2024, purchase of digital chip assets from New Jersey-based Emcore, which included wafer design, fabrication, processing operations, and a semiconductor manufacturing facility, according to a separate statement from the U.S. Treasury Department.
U.S. officials also flagged the potential diversion of indium phosphide chip supplies away from the United States as a national security risk. Indium phosphide is a critical material used in high-performance chips for communications and defense-related technologies.
Neither HieFo nor Emcore immediately responded to a request for comment.
China’s state-backed Global Times, citing an expert, criticized the decision, saying the divestment order “reflects Washington’s anxiety over technology competition with China” and lacked a convincing rationale.
The Treasury Department said the transaction was never reported 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 department said.
Under the order, HieFo must divest all acquired assets within 180 days and immediately restrict access to Emcore’s technical information.
In a statement dated Sept. 2, 2024, HieFo said the deal would keep operations running at Emcore’s facility in Alhambra, California, and noted 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 Emcore’s wafer fabrication and chip-related assets. Both founders list May 2024 as their start date at HieFo on LinkedIn, when the acquisition closed.
The company said it inherited more than 40 years of optoelectronic innovation in indium phosphide chip manufacturing.
Emcore manufactures navigation equipment, including gyroscopes and sensors used in commercial, industrial, and defense applications such as autonomous navigation and weapons systems, according to its website.
The company was delisted from Nasdaq in early 2025 after completing a merger with aerospace manufacturing holding company Velocity One LP in November 2024.
