In a significant move that has raised eyebrows, President Donald Trump has directed a company with ties to China to dismantle its recent acquisition of chip assets, valued at $2.9 million, due to concerns over national security. This decision was officially communicated through an executive order issued by the White House on a Friday in early January 2026.
According to the executive order, HieFo Corporation, which is registered in Delaware, is said to be "controlled by a citizen of the People's Republic of China." This corporation had completed the acquisition of essential digital chips and related wafer design, fabrication, and processing operations from Emcore, a manufacturer based in New Jersey, on April 30, 2024. The White House expressed that this deal poses a potential threat to the United States' national security.
Adding to the complexity, the U.S. Treasury Department released a statement indicating that among the assets taken over by HieFo is a semiconductor manufacturing facility. The department highlighted that there is a risk associated with the possible diversion of indium phosphide chips produced by Emcore, further underscoring the alleged national security threat.
As of now, HieFo and Emcore have not provided a response to inquiries from CNBC regarding this situation.
The Global Times, a publication often viewed as a voice for the Chinese government, reported that experts interpret the divestment directive as a sign of Washington's growing unease regarding technological competition with China, expressing skepticism about the justification behind this action.
According to the Treasury Department, the transaction had not been reported to the Committee on Foreign Investment in the United States (CFIUS), which led to a subsequent review by their team dedicated to non-notified transactions. CFIUS identified a security concern connected to potential access to Emcore's intellectual property, proprietary technologies, and expertise.
HieFo has been instructed to sell off all acquired assets within a 180-day timeframe and to immediately limit any access to Emcore's technical information.
In a statement from September 2, 2024, HieFo indicated that this acquisition was intended to ensure the continuation of operations at Emcore's facility located in Alhambra, California, claiming they had "successfully engaged" nearly all key personnel including scientists, engineers, and operational staff.
HieFo was established by Genzao Zhang and Harry Moore through a management buyout of wafer fabrication and chip-related assets from Emcore. Both founders have noted on LinkedIn that they began their journey with HieFo in May 2024, coinciding with the closing of the acquisition.
The company asserts that it has inherited over four decades of innovation in the manufacturing of indium phosphide chips, which are crucial for various high-tech applications.
Emcore itself is known for producing navigation equipment such as gyroscopes and sensors that are utilized across commercial, industrial, and defense sectors, including in autonomous navigation systems and weaponry. It’s noteworthy that Emcore was delisted from Nasdaq in early 2025 after merging with Velocity One LP, an aerospace manufacturing holding company, in November 2024.
