Trump halts HieFo-Emcore chip acquisition over security, China links

President Donald Trump has blocked U.S. photonics firm HieFo Corp from acquiring assets of New Jersey-based aerospace and defense specialist Emcore, a deal valued at approximately $3 million, citing national security risks and China-related concerns.

In a White House order, Trump stated that HieFo is “controlled by a citizen of the People's Republic of China,” and that the acquisition may “take action that threatens to impair the national security of the United States.” The order instructs HieFo to divest all interests and rights in the Emcore assets within 180 days.

Background of the deal

HieFo acquired Emcore’s chip business and indium-phosphide wafer fabrication operations for $2.92 million. HieFo was co-founded by Genzao Zhang, a former Emcore vice president of engineering, and Harry Moore, previously a senior sales director at Emcore.

The Committee on Foreign Investment in the United States (CFIUS) flagged potential national security concerns during its investigation, though specific risks were not disclosed by the Treasury Department. Both HieFo and Emcore had not issued official statements immediately following the order.

Implications for tech and defense sectors

This decision underscores heightened scrutiny of U.S. tech deals involving Chinese stakeholders, particularly in aerospace, defense, and semiconductor industries. Analysts warn that similar transactions may face delays or blocks, affecting foreign investment flows and supply chain stability.

Experts note that this aligns with broader U.S. policy to limit technology transfer to China while safeguarding strategic domestic industries. Companies planning cross-border acquisitions in sensitive sectors may now face stricter review timelines and compliance requirements.