U.S. President Donald Trump has taken decisive action to block a $2.9 million deal involving HieFo Corp’s acquisition of semiconductor assets from Emcore Corp, citing national security concerns. This executive order issued on Friday highlights growing apprehensions regarding Chinese influence over critical technology sectors in the United States. While the deal was initially announced in May 2024 during former President Joe Biden’s administration, it has now come under scrutiny, drawing attention to potential vulnerabilities in U.S. technological infrastructure.
In his order, Trump stated that HieFo must divest its technology holdings within 180 days, underscoring “credible evidence” suggesting that HieFo’s current ownership primarily lies with a citizen of the People’s Republic of China. The order notes that any changes to this divestment deadline can only be accommodated if extended by the Committee on Foreign Investment in the United States (CFIUS). The executive order emphasizes that the proposed transaction poses a significant risk to U.S. national security.
Trump’s directive specifically prohibits HieFo from retaining any interest in Emcore’s assets and extends this prohibition to include collaborations with affiliates or foreign shareholders. “The Transaction is hereby prohibited,” the order clearly states, reflecting a robust stance against foreign access to sensitive technology. CFIUS has identified a national security risk stemming from the transaction, particularly concerning potential access to Emcore’s intellectual property and the diversion of supply related to indium phosphide chips produced by Emcore’s operations.
The HieFo deal comprised Emcore Corp selling its semiconductor and wafer fabrication operations to HieFo for $2.92 million, which included the assumption of around $1 million in liabilities. HieFo was founded by Dr. Genzao Zhang and Harry Moore, with plans to manage the acquired technology through the existing team in Alhambra, California. Zhang, who formerly served as Emcore’s vice president of engineering, expressed commitments to innovation, particularly in areas like artificial intelligence.
Emcore was publicly traded at the time of the HieFo transaction but was subsequently taken private by investment firm Charlesbank Capital Partners. The administration’s recent decision signals an intensified focus on mitigating foreign risks associated with advanced semiconductor technologies, a sector critical for national defense and technological prowess.
This executive order reflects an ongoing trend in U.S. policy aimed at enhancing surveillance over foreign investments in sensitive sectors, particularly as tensions with China continue to evolve. The order serves as a reminder of the delicate balance between encouraging foreign investment and safeguarding national interests in a rapidly changing technological landscape.
As the deadline for divestment approaches, industry stakeholders will be closely observing the implications this executive action may have on future technology deals and evolving market dynamics.
Original Source: https://www.livemint.com/news/us-news/donald-trump-blocks-2-9-million-biden-era-semiconductor-deal-citing-security-reasons-hiefo-emcore-11767405492843.html
Category :
Tags:
Publish Date: 2026-01-03 08:22:00
