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Trump Blocks Chinese-Linked Chip Deal, Citing National Security Threat

President Trump issued an executive order blocking HieFo Corporation, a Delaware-based company controlled by a Chinese national, from holding assets acquired from Emcore Corporation's semiconductor business. The order mandates divestment within 180 days, citing credible evidence of national security threats. CFIUS will monitor compliance and restrict access to technical information during the divestment period. This action reflects growing U.S. scrutiny of foreign investments in advanced technologies amid strategic competition with China.

Key Points: Trump Blocks Chinese-Linked Semiconductor Acquisition Over Security

  • Trump blocks chip asset deal
  • HieFo ordered to divest in 180 days
  • CFIUS oversees compliance
  • Semiconductors seen as critical tech
2 min read

Trump blocks Chinese-linked chip asset deal

President Trump blocked HieFo's acquisition of Emcore chip assets, ordering divestment within 180 days due to national security risks tied to Chinese control.

"credible evidence that the transaction could threaten the national security of the United States - Executive Order"

Washington, Jan 3

US President Donald Trump has blocked a deal involving American semiconductor assets and a Chinese-linked company, citing national security concerns.

In an executive order issued on Friday, Trump barred HieFo Corporation from acquiring certain chip-related assets of Emcore Corporation. The order said there was "credible evidence" that the transaction could threaten the national security of the United States.

HieFo, a Delaware-based company controlled by a Chinese national, had acquired assets tied to digital chips as well as wafer design, fabrication, and processing businesses of New Jersey-based Emcore. The acquisition was completed on April 30, 2024.

Trump said existing legal authorities, outside Section 721 of the Defense Production Act of 1950, did not provide "adequate and appropriate authority" to address the risks posed by the transaction.

Under the order, the transaction is prohibited, and HieFo is barred from holding any interest or rights in the Emcore assets, either directly or indirectly. HieFo and its affiliates have been directed to divest all such interests within 180 calendar days, unless the Committee on Foreign Investment in the United States, or CFIUS, extends the deadline.

Until the divestment is completed and verified by CFIUS, HieFo is prohibited from granting access to the Emcore assets. The restriction also applies to non-public technical information, information technology systems, products, parts, components, books, and records. Any access would require written approval from CFIUS.

The order authorizes CFIUS to impose compliance measures, require certifications, and conduct audits to ensure adherence. HieFo must submit regular written certifications confirming that it is following the order and detailing progress toward divestment.

Emcore had earlier announced the sale of its chips business and indium phosphide wafer fabrication operations for $2.92 million. The transaction also involved HieFo's assumption of certain liabilities and covered substantially all assets tied to Emcore's discontinued chips business, including facilities in Alhambra, California.

CFIUS is an interagency panel chaired by the US Treasury Department that reviews foreign investments for national security risks. Its scrutiny has expanded in recent years, particularly for deals involving advanced technologies.

Semiconductors are viewed as critical to both civilian and defense applications. US administrations have increasingly used executive authority to restrict foreign access to sensitive chip technologies amid heightened strategic competition with China.

- IANS

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Reader Comments

P
Priya S
The global tech war is heating up. While national security is paramount, I hope this doesn't lead to further fragmentation of the global supply chain. It will impact prices and availability for consumers everywhere, including here in India.
R
Rohit P
Good decision. China has a history of acquiring tech through such means. India must learn and create a robust CFIUS-like mechanism to screen foreign investments in critical infrastructure and emerging tech. Jai Hind!
S
Sarah B
Interesting to see this play out. The amount was only $2.92 million for such sensitive assets? Seems surprisingly low. Makes you wonder about the true value and what exactly was being transferred.
V
Vikram M
With respect, while security is important, this constant blocking creates uncertainty for global business. Many Indian startups and companies have investments and operations in the US. We need clear, consistent rules, not just executive orders that change with each administration.
K
Kavya N
Semiconductors are the new oil. Every nation wants control. This is a wake-up call for India to double down on its semiconductor fabrication plans. We can't afford to be dependent on others for such a critical component. 💪

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