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President Donald Trump ordered HieFo Corp to unwind its 2024 purchase of Emcore Corp's chip assets on Friday. He cited US national security concerns as the reason for his decision. The White House order has given HieFo 180 calendar days to divest the technology and related rights. CFIUS can extend the 180-day deadline under the order if needed.
The directive covers Emcore’s digital chips business. It also covers wafer design, fabrication, and processing operations, including indium-phosphide capability. Emcore completed the sale on April 30, 2024, for $2.92 million and certain assumed liabilities.
According to Trump, credible evidence linked HieFo’s control to a citizen of the People’s Republic of China. Consequently, the order bars HieFo from holding any interest in the Emcore assets, even through affiliates.
The order defines the covered assets broadly, including contracts, inventory, parts, and fixed assets. It also extends to accounts receivable, permits, real property, and intellectual property tied to the business.
The order cites Section 721 of the Defense Production Act. This law governs CFIUS reviews of foreign investment. The Treasury Department said CFIUS identified a national security risk during its investigation, without disclosing details.
During the divestment period, HieFo must restrict access to the assets and non-public technical information, unless CFIUS approves access. In addition, HieFo must put controls in place within seven days to prevent prohibited access.
The order also limits corporate moves that could frustrate compliance. HieFo cannot dissolve, reorganize, relocate, or transfer covered assets in ways that impede divestment, unless CFIUS approves.
CFIUS can require audits at HieFo’s expense. It can also authorize US officials to inspect facilities, records, and information systems. HieFo must certify weekly compliance and report progress toward divestment.
When HieFo completes the divestment, it must certify that it transferred or destroyed covered intellectual property in its control. CFIUS then has up to 90 days to verify completion and notify HieFo in writing.
Emcore, an aerospace and defense supplier based in New Jersey, announced the transaction in May 2024 after it closed. Charlesbank Capital Partners later took Emcore private after the company traded publicly.
HieFo has said Genzao Zhang and Harry Moore co-founded the company, and Zhang previously led engineering at Emcore. After closing, HieFo said its Alhambra, California, team would keep running the operation. It also planned products for telecom, datacom, and AI connectivity markets.
The order requires HieFo to notify CFIUS of any intended buyer and wait 30 days for a no-objection window. It bars evasion and authorizes the Attorney General to enforce compliance. CFIUS can object to a sale if the buyer shows ties to HieFo or cannot support compliance fully.
According to reports, neither HieFo nor Emcore issued an immediate public response late Friday. As a result, the next steps depend on the divestment plan and the government’s review of any future owner.
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