In a significant move concerning national security, President Donald Trump has ordered HieFo Corporation, a company controlled by a Chinese national, to unwind its recent acquisition of semiconductor assets valued at $2.9 million from U.S. manufacturer Emcore. This decision, which was announced in an executive order on Friday, stems from concerns regarding potential risks posed by foreign control over critical technological resources.
The White House specified that HieFo Corporation, incorporated in Delaware, is “controlled by a citizen of the People’s Republic of China.” The acquisition took place on April 30, 2024, when HieFo purchased Emcore’s digital chips and associated wafer design, fabrication, and processing businesses, which included a semiconductor manufacturing facility based in New Jersey.
The Treasury Department highlighted that this transaction raised substantial national security concerns, particularly the risk of diverting the supply of indium phosphide chips produced by Emcore away from the United States. In a separate statement, the department noted that the deal had not been reported to the Committee on Foreign Investment in the United States (CFIUS), leading to a proactive review by its non-notified transactions team.
CFIUS concluded that the acquisition posed a national security risk, citing potential access to Emcore’s intellectual property, proprietary knowledge, and technical expertise as key concerns. In light of these findings, HieFo has been mandated to divest all acquired assets within 180 days and was instructed to restrict immediate access to Emcore’s technical information.
The acquisition’s controversial nature has not gone unnoticed internationally. The Global Times, a state-affiliated Chinese media outlet, reported that experts view the divestment order as indicative of Washington’s heightened anxiety over rising technological competition with China, asserting that the rationale behind the order lacks convincing substantiation.
HieFo, which was co-founded by Genzao Zhang and Harry Moore following a management buyout of Emcore’s wafer fabrication and chip-related assets, had previously asserted that the integration of operations at Emcore’s California facility would proceed smoothly and that the company had successfully retained most of Emcore’s key personnel, including scientists and engineers.
Emcore is recognized for manufacturing navigational equipment, including gyroscopes and sensors that serve both commercial and defense sectors. Its products play crucial roles in applications such as autonomous navigation and weapon systems.
In a recent development, Emcore faced challenges of its own, as it was delisted from Nasdaq in early 2025 after merging with aerospace manufacturing holdings, Velocity One LP, in late 2024. The ongoing scrutiny of its ownership and operational strategies continues to highlight the complexities intertwined with U.S.-China technological relations and national security priorities.
