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In a significant move targeting foreign technology ownership, President Donald Trump has ordered the unwinding of a $2.9 million computer chips deal, citing national security concerns related to Chinese ownership of sensitive American technology.
Trump issued an executive order Friday requiring HieFo Corp. to divest technology it acquired from Emcore Corp. within 180 days. The presidential order states there is “credible evidence” that HieFo’s ownership—specifically by a citizen of the People’s Republic of China—poses security risks to the United States.
The deal in question received minimal attention when initially announced in May 2024 during the Biden administration. Under the terms of that agreement, aerospace and defense specialist Emcore sold its computer chips and wafer fabrication operations to HieFo for $2.92 million, a figure that included approximately $1 million in assumed liabilities.
HieFo was founded by Dr. Genzao Zhang, who previously served as Emcore’s vice president of engineering before assuming the role of HieFo’s CEO, and Harry Moore. After the acquisition closed, the company announced that the same team of employees in Alhambra, California would largely oversee the acquired technology.
At the time of the acquisition, Zhang publicly stated the company would “continue the pursuit of the most innovative and disruptive solutions” with technology designed for various applications, including artificial intelligence. HieFo has not yet responded to requests for comment regarding Trump’s order.
The executive action reflects growing bipartisan concerns about Chinese access to American semiconductor technology. The semiconductor industry has become a critical battleground in U.S.-China tensions, with both nations viewing chip technology as essential to economic and military superiority.
Computer chips are fundamental components in everything from consumer electronics to advanced weapons systems. The U.S. government has increasingly scrutinized foreign investments in this sector, particularly those with connections to China, as part of a broader strategy to protect American technological advantages.
This divestiture order comes amid heightened focus on supply chain security in the semiconductor industry. The global chip shortage during the pandemic exposed vulnerabilities in the supply chain and accelerated government efforts to ensure domestic control over critical technology.
The Committee on Foreign Investment in the United States (CFIUS), which reviews deals for national security implications, likely played a role in flagging this transaction for presidential review. While relatively small in dollar terms, the technological capabilities involved apparently triggered significant national security considerations.
Emcore, which was publicly traded at the time of the deal with HieFo, was subsequently taken private last year by investment firm Charlesbank Capital Partners. The company has long been involved in developing specialized semiconductor products for aerospace, defense, and telecommunications applications.
Industry analysts note that the $2.9 million price tag suggests the deal involved specialized technology rather than large-scale manufacturing operations. However, even small-scale, specialized chip technology can have outsized strategic importance, particularly in defense applications.
The order highlights the continued tightening of U.S. policy regarding Chinese access to American technology under the Trump administration. Similar measures were implemented during Trump’s first term, and this new action signals a continuation of those policies following his return to office.
The case also raises questions about the thoroughness of foreign investment reviews during the Biden administration, as the deal was initially allowed to proceed despite the concerns that ultimately led to Trump’s intervention.
HieFo now faces the challenge of finding a buyer for the technology acceptable to U.S. regulators within the six-month timeframe, or potentially facing further enforcement actions.
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9 Comments
Interesting move by President Trump to block this tech deal over national security concerns. Protecting sensitive American technology assets is crucial, especially with the rise of Chinese ownership in strategic sectors.
I agree, safeguarding critical infrastructure and IP is a top priority. We can’t afford to let adversaries gain access to sensitive US tech and capabilities.
This executive order highlights the administration’s tough stance on foreign acquisition of US tech firms. While deals like this may seem small, the downstream implications for national security can be significant.
You’re right, even seemingly minor transactions can have major ramifications. Proactive measures to vet and restrict these types of acquisitions are prudent.
Curious to see how this will impact the broader landscape of Chinese investment in US tech firms going forward. The President’s action here suggests a hardline stance on technology transfer to adversarial nations.
While the dollar value of this transaction may be relatively small, the broader implications around Chinese investment in US tech infrastructure are quite serious. Trump’s order signals a clear line in the sand.
Agreed. Even modest deals can pose significant national security risks if they involve access to critical technology. The administration is right to scrutinize these types of transactions carefully.
The details on the HieFo-Emcore deal are a bit murky, but the core issue seems to be about protecting American chip technology from Chinese ownership. Wise move by the President to intervene.
Yes, the optics around this deal are concerning given the Chinese ownership. Ensuring that sensitive US tech doesn’t fall into the wrong hands is absolutely crucial.