U.S. President Donald Trump issued an executive order late Friday to block a multimillion-dollar acquisition that he says would allow a Chinese-run company to access to valuable semiconductor technologies.
Delaware-based HieFo Corp. announced in 2024 that it intends to acquire the chips and indium phosphide wafer fabrication businesses of a company called Emcore Corp. for $2.92 million, and the deal was initially set to be approved by regulators. But now, Trump’s order seeks to unwind the merger and prevent the China-linked HieFo from completing the acquisition.
Trump’s order refers to the Defense Production Act as justification for blocking the acquisition, and states there is “credible evidence” that the current owner of HieFo is a Chinese national who “might take action that threatens to impair the national security of the United States.” It further commands that HieFo must divest ownership of the semiconductor assets relating to the deal, which are used in products ranging from Apple Inc. iPhones to artificial intelligence platforms, within 180 days.
Enforcement of the ruling will be overseen by the Committee on Foreign Investment in the U.S., which has the authority to extend the deadline beyond what has been stipulated.
HieFo is led by its founder and Chief Executive Genzao Zhang. According to his LinkedIn profile, he has established links with Emcore, having previously served as its vice president of engineering. On its website, HieFo describes itself as a company that specializes in the “production and development of high-efficiency Indium Phosphide (InP) photonic devices for the optical communication industry.”
“Our journey began with a management buyout (MBO) of wafer fabrication and chip-related assets from Emcore Corporation,” the company explains. That would seem to suggest HieFo may be unable to function as a viable business should Trump’s order be enforced.
The U.S. has long sought to prevent China from accessing advanced chip technologies, but the order is surprising considering that Trump had recently relaxed some of the stiff export controls imposed on his main geopolitical rival. Last month, he ruled that China would be able to purchase some less powerful chip technologies that had previously been barred, including Nvidia Corp.’s previous-generation H200 graphics processing units.
Photo: Gage Skidmore/Flickr
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