Trump Orders Divestment of Chip Deal Discovered by CFIUS Non-Notified Team
President Donald Trump has ordered a U.S.-based company owned by a Chinese national to unwind its April 2024 purchase of semiconductor assets from an American technology firm, saying the deal threatens U.S. national security.
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HieFo must reverse its $2.9 million purchase of New Jersey-based Emcore’s chips business and indium phosphide wafer fabrication operations within 180 days of Jan. 2 unless the parties are granted more time by the Committee on Foreign Investment in the U.S., Trump’s executive order said. During that time, HieFo employees are blocked from accessing any “Emcore Assets” or any “non-public technical information, information technology systems, products, parts and components, books and records, or facilities” of Emcore’s in the U.S.
HieFo must also, within seven days, put in place “measures or controls” ordered by CFIUS to ensure it's following the committee's restrictions. CFIUS can also audit HieFo, “at no expense to CFIUS,” to make sure the company is complying with the divestment and CFIUS orders, and HieFo must certify to CFIUS that it’s following the committee’s orders and certify after it has destroyed or transferred all Emcore intellectual property.
Treasury said the deal wasn’t disclosed to CFIUS until after the committee’s non-notified team began investigating the purchase. “Parties to transactions should carefully consider whether or not any transaction they may be undertaking may be subject to CFIUS jurisdiction, including whether or not the transaction has a potential nexus to U.S. national security,” Treasury said.
Trump’s executive order also said CFIUS’ enforcement team can put in place any measures “it deems necessary and appropriate to verify and enforce compliance” with the order, including visits by U.S. authorities to HieFo facilities “on reasonable notice.” The order says those U.S. officials can inspect and copy any “books, ledgers, accounts, correspondence, memoranda, and other records and documents” controlled by HieFo or its affiliates that involve the Emcore purchase, and they can audit HieFo’s systems and communications and interview its employees
Trump didn’t expound on how the deal threatens U.S. national security, only saying that “there is credible evidence that leads me to believe that HieFo,” through its purchase of the Emcore assets, “might take action that threatens to impair the national security of the United States.”
In a message posted to its website, Emcore said it was bought by Velocity One in 2025 and stressed that the deal with HieFo was carried out “under the direction of the predecessor company's board of directors and management team.” The company is “not a party to this matter.”
It also said CFIUS, at the time of the HieFo deal, carried out a review of the sale, and Emcore “fully cooperated” with CFIUS. “HieFo Corporation was unable to resolve national security concerns identified by CFIUS relating to the ownership and control of HieFo Corporation, resulting in an executive order,” Emcore said. The company “has cooperated fully with all relevant governmental agencies and remains in complete compliance with all applicable regulations. Business operations continue as normal.”
HieFo didn’t respond to a request for comment.