On Friday, U.S. President Donald Trump issued an executive order directing a company controlled by a Chinese national to unwind its $2.9 million acquisition of chip assets from a U.S. manufacturer. The order cited national security concerns as the basis for the directive.
The White House identified HieFo Corporation, which is incorporated in Delaware, as being "controlled by a citizen of the People's Republic of China."
Acquisition Details
HieFo acquired the digital chips and related wafer design, fabrication, and processing businesses of New Jersey-based Emcore on April 30, 2024. This acquisition included a semiconductor manufacturing facility. The Treasury Department also specified that a potential diversion of the supply of indium phosphide chips, manufactured by Emcore's digital chips business, away from the U.S. was identified as a national security risk.
HieFo and Emcore did not immediately respond to a request for comment regarding the order.
CFIUS Review and Security Concerns
The Treasury Department confirmed that the transaction was not initially notified to the Committee on Foreign Investment in the United States (CFIUS). This absence of notification prompted a review by CFIUS's non-notified transactions team.
CFIUS determined that the transaction posed a national security risk, primarily concerning potential access to Emcore's intellectual property, proprietary know-how, and expertise.
Divestment Mandate
As a result, HieFo has been ordered to divest all acquired assets within 180 days. Additionally, the company is required to immediately restrict access to Emcore's technical information.
In a statement dated September 2, 2024, HieFo had previously indicated that the deal would allow operations to continue at Emcore's facility in Alhambra, California, and that it had successfully retained "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' LinkedIn profiles list their start dates at HieFo as May 2024, coinciding with the acquisition's closure. The company had stated it inherited over 40 years of optoelectronic innovation in indium phosphide chip manufacturing.
Emcore manufactures navigation equipment, including gyroscopes and sensors. These are used in commercial, industrial, and defense applications, such as autonomous navigation and weapons systems, according to its website. Emcore was delisted from Nasdaq in early 2025 following its merger with aerospace manufacturing holding company Velocity One LP in November 2024.
International Perspective
The Global Times, a Chinese state-affiliated newspaper, cited an expert who suggested that the divestment order "reflects Washington's anxiety over technology competition with China" and was made "without a convincing rationale."