President Donald Trump on Friday sought to reverse a multimillion-dollar deal the White House said allowed a Chinese-run company in Delaware to gain access to valuable semiconductor assets.
The president’s executive order cites national security concerns as the basis for blocking HieFo Corporation from acquiring digital chips made by Emcore Corporation, a New Jersey aerospace and defense company. The move seeks to unwind the $2.92 million merger the two businesses reached in 2024.
The White House is leveraging the Defense Production Act to block the acquisition, arguing there is “credible evidence” that HieFo’s current owner is a Chinese citizen and “might take action that threatens to impair the national security of the United States.” HieFo must divest ownership of the semiconductor assets, which are used to build critical items ranging from iPhones to artificial intelligence platforms, that it bought from Emcore within 180 days, according to the order.
The Committee on Foreign Investment in the U.S. will oversee enforcement of Trump’s executive order and holds the power to extend the deadline for divestment.
Genzao Zhang is HieFo’s CEO and co-founder. Zhang had previously served as Emcore’s vice president of engineering, according to his LinkedIn profile.
On its website, HieFo describes itself as a “California-based company specializing 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,” its company profile page says.
The president’s move to prohibit Emcore from selling off its chip operations to HieFo is the Trump administration’s latest effort to weaken China’s grip on the semiconductor supply chain.
Last month, Washington announced it would maintain its tariffs on Chinese-made semiconductors until June 2027, after which the chip tariffs are expected to increase at a rate yet to be determined.
Still, Trump has kept the lines of communication open with China, allowing for the continued sale of less advanced digital chips to the country, including Nvidia’s H200 products.
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The topic was likely on the agenda for a Friday meeting the president was scheduled to hold at his Mar-a-Lago estate with U.S. Ambassador to China David Perdue.
“The arrival of New Year’s Day signifies that it has been 47 years since the United States and China established diplomatic relations,” Perdue posted on X this week. “From doing business in China back then to serving as ambassador in China today, I deeply understand that we are able to continue advancing the relationship between our two countries.”
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