President Donald Trump has issued an executive order prohibiting HieFo from retaining ownership of certain semiconductor assets acquired from EMCORE, citing national security risks.
The directive, issued by the White House on Friday, follows a review by the Committee on Foreign Investment in the United States, which determined that the deal could expose sensitive U.S. semiconductor technology and disrupt the domestic supply of indium phosphide chips.
Why Did the President Block the Transaction?
According to the order, there is credible evidence that Delaware-based HieFo, controlled by a Chinese citizen, could take actions that threaten U.S. national security through its control of New Jersey-based EMCORE’s chip-related assets. The president stated that no existing legal authorities were sufficient to address the risk identified by CFIUS, which concluded that the transaction could allow access to EMCORE’s intellectual property, proprietary know-how and manufacturing expertise, as well as enable diversion of chip supply away from the United States.
What Does the Order Require HieFo to Do?
The order directs the company to divest all related rights and property within 180 days, unless CFIUS grants an extension. Until divestment is completed and verified, HieFo is barred from granting access to the assets or associated nonpublic technical information without CFIUS approval.
The order also restricts restructuring, asset transfers or other actions that could impede compliance, and authorizes CFIUS to audit and monitor HieFo throughout the divestment process.
Why Did CFIUS Intervene After the Transaction Closed?
The acquisition deal between HieFo and EMCORE was completed in 2024. According to CFIUS, HieFo did not submit the transaction for review until after the committee’s non-notified team initiated an investigation.
