US President Donald Trump on Friday blocked a $2.9 million computer chip deal that included HieFo Corp acquiring semiconductor assets from Emcore with an executive order, citing national security concerns.
Trump concluded in his order that the computer chip deal threatens US national security if HieFo’s current owner remains in control of the technology.
Donald Trump’s executive order brought attention to a trade deal that drew almost no attention in May 2024 when it was announced during former President Joe Biden’s term.
What does Trump’s order say?
Donald Trump is demanding that HieFo get rid of the technology within 180 days, citing “credible evidence” that the current owner is a citizen of the People’s Republic of China. He said the deadline change is only possible if the Committee on Foreign Investment in the United States (CFIUS) extends the deadline.
The executive order goes on to say that the deal “threatens to undermine the national security of the United States.”
It is the latest move by the administration to curb China’s access to advanced semiconductor technologies.
“The transaction is hereby prohibited and HieFo is prohibited from owning any interest in or rights to any of Emcore’s assets, whether directly or indirectly through HieFo or through partners, subsidiaries, affiliates or foreign physical shareholders (collectively, affiliates),” the executive order states.
“CFIUS has identified a national security risk arising from the transaction related to potential access to EMCORE’s intellectual property, proprietary know-how and expertise, and the potential diversion of supplies of indium phosphide chips manufactured by EMCORE Digital Chips Business outside the United States. To address this risk, the President’s order directs HieFo to divest itself of all interests and rights in EMCORE Digital’s Chips Business,” it adds.
What was the HieFo deal?
The deal involved aerospace and defense company Emcore Corp. selling its computer chip and wafer manufacturing operations to HieFo for $2.92 million — a price that included the assumption of about $1 million in liabilities.
HieFo was founded by Dr. Genzao Zhang and Harry Moore. According to a press release issued after the deal closed, plans for the technology acquired from Emcore were to be overseen largely by the same team of employees in Alhambra, California.
Zhang, who was vice president of engineering at Emcore before becoming CEO of HieFo, pledged to “continue to pursue the most innovative and disruptive solutions” with technology designed for purposes that would include artificial intelligence.
Emcore was a publicly traded company at the time of the HieFo deal, but last year was a Charlesbank Capital Partner private equity firm.
