US President Donald Trump on Friday in an executive order blocked a $2.9 million computer chips deal involving HieFo Corp acquiring semiconductor-related assets from Emcore, citing national security reasons.
In his order, Trump concluded that the computer chips deal threatened US national security if the current owner of HieFo remained in control of the technology.
Donald Trump’s executive order brought a spotlight on a business deal that hardly drew any attention in May 2024 when it was announced during former President Joe Biden’s tenure.
What does Trump’s order say?
Donald Trump is demanding that HieFo divest a technology within 180 days, citing “credible evidence” that the current owner is a citizen of the People’s Republic of China. He said that a change in date is only possible if the deadline is extended by the Committee on Foreign Investment in the United States (CFIUS).
The executive order further says that deal “threatens to impair the national security of the United States”.
It comes as the latest move by the administration aimed at cracking down on Chinese access to advanced semiconductor technologies.
“The Transaction is hereby prohibited, and ownership by HieFo of any interest or rights in any of the Emcore Assets, whether effected directly or indirectly through HieFo, or through HieFo’s partners, subsidiaries, affiliates, or foreign person shareholders (collectively, Affiliates), is also prohibited,” the executive order says.
“CFIUS identified a national security risk arising from the transaction relating to potential access to EMCORE’s intellectual property, proprietary know-how, and expertise and to the potential diversion of supply of indium phosphide chips manufactured by the EMCORE Digital Chips Business away from the United States. To address this risk, the President’s order directs HieFo to divest all interests and rights in the EMCORE Digital Chips Business,” it adds.
What was the HieFo deal?
The deal involved aerospace and defence specialist Emcore Corp. selling its computer chips and wafer fabrication 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 that came out after the deal closed, plans for the technology acquired from Emcore were to be overseen by largely the same team of employees in Alhambra, California.
Zhang, who was a vice president of engineering at Emcore before becoming HieFo’s CEO, pledged to “continue the pursuit of 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 was taken private last year by the investment firm Charlesbank Capital Partner.