President Trump Blocks HieFo’s Emcore Acquisition, Citing Chinese Control Risks

President Donald Trump issued an executive order on Friday compelling HieFo Corporation to fully divest its recently acquired semiconductor assets from Emcore Corporation. The move, grounded in national security concerns, effectively unwinds a $2.92 million transaction that had been completed under the previous administration. The order highlights growing scrutiny over foreign control of sensitive U.S. technologies, particularly in the semiconductor sector, which is vital for defense, telecommunications, and emerging artificial intelligence applications.

The transaction in question involved Emcore Corporation, a New Jersey-based specialist in aerospace and defense technologies, selling its digital chips business and indium phosphide wafer fabrication operations to HieFo, a Delaware-registered company. Valued at approximately $2.92 million—including the assumption of about $1 million in liabilities—the deal closed on April 30, 2024, and transferred key assets, including equipment, intellectual property, inventory, and facilities located in Alhambra, California. At the time, the acquisition received limited public attention during the Biden administration.

Citing "credible evidence" that HieFo is controlled by a citizen of the People's Republic of China, President Trump's order prohibits the company from retaining any ownership, interests, or rights in the acquired assets. HieFo has been granted 180 calendar days to complete the divestment, with potential extensions subject to approval by the Committee on Foreign Investment in the United States (CFIUS). During this period, strict measures are in place to prevent unauthorized access to non-public technical information or the assets themselves, ensuring no further risks to U.S. security.

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HieFo Corporation was co-founded by Dr. Genzao Zhang, a former vice president of engineering at Emcore who assumed the role of CEO following the acquisition, and Harry Moore. In statements issued after the deal's closure, Zhang emphasized continuity, noting that operations would be managed by largely the same team of experienced employees in California. He expressed commitment to advancing innovative solutions in optoelectronic devices, with applications extending to telecommunications, data communications, and artificial intelligence connectivity.

As of now, HieFo has not issued a public response to the executive order. Emcore, which was publicly traded during the original transaction, has since been taken private by Charlesbank Capital Partners. This action underscores the Trump administration's broader efforts to safeguard critical U.S. technologies from potential foreign influence, aligning with ongoing policies to bolster domestic semiconductor capabilities and mitigate risks associated with international supply chains.

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