In a significant move highlighting ongoing tech tensions, former US President Donald Trump issued an executive order on Friday to block a multimillion-dollar semiconductor acquisition. The order targets a deal where HieFo Corp aimed to acquire key chip-making assets from Emcore Corp for $2.9 million, citing direct threats to American national security.
National Security Concerns Halt Technology Transfer
The presidential directive states that the transaction posed a credible risk because the current owner of HieFo is a citizen of the People's Republic of China. Trump's order demands that HieFo divest all interests in the acquired Emcore technology within 180 days. The Committee on Foreign Investment in the United States (CFIUS) identified the core risk: potential Chinese access to Emcore's valuable intellectual property, proprietary know-how, and expertise.
Furthermore, the order expressed concern over the possible diversion of the supply of indium phosphide chips manufactured by Emcore's business away from the United States. "The Transaction is hereby prohibited," the order explicitly states, barring HieFo or any of its affiliates from owning any rights to the Emcore assets.
Details of the HieFo-Emcore Semiconductor Deal
The deal, which initially drew little attention when announced in May 2024 during President Joe Biden's tenure, involved aerospace and defence specialist Emcore Corp selling its computer chips and wafer fabrication operations. The $2.92 million price tag included assuming roughly $1 million in liabilities.
HieFo was co-founded by Dr. Genzao Zhang, who previously served as a vice president of engineering at Emcore before becoming HieFo's CEO, and Harry Moore. Following the deal's closure, a press release indicated that the technology would continue to be managed by largely the same employee team in Alhambra, California. Zhang had pledged to use the technology for innovative solutions, including in the field of artificial intelligence. Notably, Emcore was a publicly traded company at the time of the deal but was later taken private by the investment firm Charlesbank Capital Partners.
Broader Implications for Tech and Trade
This executive action is the latest in a series of US administrative moves designed to restrict Chinese access to advanced semiconductor technologies. It underscores the persistent and heightened concerns over foreign ownership, particularly by Chinese entities, of sensitive US technological assets.
The decision starkly illustrates how national security considerations can abruptly reshape the landscape for international business agreements. It also highlights the continuing challenge for US administrations in striking a balance between fostering open innovation and protecting critical technology from perceived security threats. The case puts a spotlight on the powerful role of CFIUS in scrutinizing cross-border investments that touch on America's technological crown jewels.
