Washington: US President Donald Trump has blocked a deal involving American semiconductor assets and a Chinese company, citing national security concerns.
In an executive order issued Friday, Trump blocked HieFo Corporation from purchasing certain chip-related assets of Emcore Corporation. The order stated that there was “strong evidence” that the transaction could pose a threat to United States national security.
HieFo, a Delaware-based company controlled by a Chinese national, purchased assets related to the digital chips as well as the wafer design, fabrication, and processing business of Emcore, New Jersey. The acquisition was completed on April 30, 2024.
Trump stated that existing legal authorities outside of Section 721 of the Defense Production Act of 1950 did not provide “sufficient and appropriate authority” to address the risks posed by the transaction.
Under the Order, the transaction is prohibited, and HieFo is barred from directly or indirectly acquiring any interest or rights in Emcore assets. HieFo and its affiliated companies are directed to divest all such assets within 180 calendar days, unless the Committee on Foreign Investment in the United States, or CFIUS, extends the deadline.
Until CFIUS completes and verifies the divestiture, HieFo is denied access to Emcore assets. This restriction also applies to non-public technical information, information technology systems, products, parts, components, books, and records. Any access will require written approval from CFIUS.
The Order authorizes CFIUS to enforce compliance procedures, require certifications, and conduct audits to ensure compliance. HieFo will be required to submit regular written certifications confirming it is complying with the order and detailing the progress of the divestiture.
Emcore previously announced the sale of its chips business and indium phosphide wafer fabrication operation for $2.92 million. The transaction involved HieFo assuming certain liabilities and including nearly all of Emcore’s assets related to its discontinued chips business, including facilities in Alhambra, California.
CFIUS is an inter-agency panel headed by the US Treasury Department. It reviews foreign investments for national security risks. Its scrutiny has increased in recent years, particularly for deals involving advanced technologies.
Semiconductors are considered essential for both civilian and defense applications. US administrations have increasingly used executive authority to block foreign access to sensitive chip technologies amid growing strategic competition with China.
