WASHINGTON — In a move underscoring the intensifying technological “cold war” between Washington and Beijing, President Donald Trump signed an executive order on Friday, January 2, 2026, forcing a Chinese-controlled firm to unwind its acquisition of critical American semiconductor assets.
The order targets HieFo Corporation, a Delaware-incorporated company, and mandates the total divestment of assets it acquired from Emcore Corporation, a New Jersey-based aerospace and defense manufacturer. The deal, valued at approximately $2.92 million, was originally finalized in April 2024 but fell under the crosshairs of the Committee on Foreign Investment in the United States (CFIUS) due to its “non-notified” status.
The National Security Mandate
The White House cited “credible evidence” that HieFo is controlled by a citizen of the People’s Republic of China (PRC), creating a risk that sensitive intellectual property (IP) and proprietary expertise could be diverted to Beijing.
Specifically, the administration flagged the supply chain of indium phosphide (InP) chips. Unlike traditional silicon chips, indium phosphide is a “compound semiconductor” essential for high-frequency, high-power applications, including:
- Defense Systems: Used in electronic warfare, radar, and precision-guided weapons.
- Telecommunications: Vital for the 5G and 6G infrastructure required for high-speed data transfer.
- Autonomous Systems: Critical for gyroscopes and sensors used in both commercial and military drones.
CFIUS and the “Non-Notified” Investigation
The Treasury Department revealed that HieFo did not voluntarily notify CFIUS of the 2024 transaction. Instead, the Committee’s “non-notified” team—a unit significantly bolstered by the Foreign Investment Risk Review Modernization Act (FIRRMA)—identified the deal after it had already closed.
“CFIUS identified a national security risk relating to potential access to Emcore’s intellectual property, proprietary know-how, and expertise,” the Treasury statement read. The government expressed concern that the ownership structure could allow for the “diversion of supply” of InP chips away from U.S. defense contractors and toward foreign competitors.
Founders and the “Management Buyout”
HieFo was founded by Dr. Genzao Zhang and Harry Moore following what they described as a “management buyout” of Emcore’s wafer fabrication assets. Dr. Zhang, who serves as HieFo’s CEO, was previously the Vice President of Engineering at Emcore.
While HieFo argued that the deal preserved high-tech jobs at its facility in Alhambra, California, the White House order effectively ends the company’s control over these assets. HieFo has been given 180 days to complete the divestment and must immediately restrict any foreign access to technical data, IT systems, and physical records.
Context of the U.S.-China Tech Rivalry
The divestment order comes at a time of heightened friction. Just last month, the Trump administration announced it would maintain high tariffs on Chinese-made semiconductors through 2027. This latest action signals that even relatively small deals—the HieFo acquisition was less than $3 million—will not escape the “small yard, high fence” strategy designed to protect the U.S. technological edge.
“This is a message to every firm attempting to circumvent the CFIUS process,” said one senior administration official. “There is no deal too small to be ignored if it involves our critical semiconductor supply chain.”
FAQs: HieFo Corporation and the Blocked Emcore Asset Deal
Q: What is the latest update regarding HieFo Corporation and Emcore?A: On January 2, 2026, President Donald Trump issued an executive order requiring HieFo Corporation to unwind its acquisition of certain chip-related assets from Emcore Corporation. The order prohibits the transaction and mandates that HieFo divest all interests in the acquired assets within 180 days.
Q: Why was the deal blocked by the White House?A: The administration cited national security risks. Specifically, the U.S. government identified that HieFo is “controlled by a citizen of the People’s Republic of China.” The Committee on Foreign Investment in the United States (CFIUS) found that the deal could give the Chinese-controlled entity access to sensitive intellectual property (IP) and “proprietary know-how.” There was also a concern regarding the potential “diversion of supply” of specialized chips away from the United States.
Q: What are the specific assets involved in this transaction?A: The deal, valued at $2.92 million, involved HieFo acquiring Emcore’s digital chips business and its indium phosphide (InP) wafer fabrication operations. Emcore is a New Jersey-based manufacturer specializing in aerospace and defense technology, including sensors and navigation equipment used in autonomous systems and weaponry.
Q: What makes “Indium Phosphide” chips so important to national security?A: Indium phosphide is a high-performance semiconductor material. Unlike common silicon, InP is essential for high-frequency and high-speed photonics used in 5G/6G telecommunications, satellite communications, and advanced military radar. The U.S. government views domestic control over this supply chain as a critical “chokepoint” in the technological competition with China.
Q: Who founded HieFo Corporation?A: HieFo was founded by Dr. Genzao Zhang and Harry Moore. Dr. Zhang previously served as the Vice President of Engineering at Emcore, and Moore was a senior sales director at the same company. They launched HieFo through a management buyout of the Emcore assets in April 2024.
Q: Is this the first time the Trump administration has retroactively unwound a deal?A: No. This action follows a pattern of the administration using CFIUS to review and dismantle previously closed “non-notified” transactions. For example, in July 2025, the administration forced the unwinding of a 2020 deal where the Chinese firm Suirui International acquired Jupiter Systems. These moves signal that the age of a deal does not protect it from being overturned if new security risks are identified.
Q: What happens if HieFo does not comply with the divestment order?A: The executive order authorizes CFIUS to implement and enforce measures to ensure compliance. This includes the power to audit HieFo’s records, inspect its facilities, and oversee the destruction or transfer of intellectual property. The order also grants the Attorney General the authority to take any necessary steps to enforce the divestment.