Trump blocks $2.9M semiconductor deal over national security concerns
What's the story
US President Donald Trump has blocked a $2.9 million semiconductor deal between HieFo Corp and Emcore, citing national security concerns. The executive order demands HieFo to divest its technology within 180 days, unless the deadline is extended by the Committee on Foreign Investment in the United States (CFIUS). Trump's order comes as part of his administration's efforts to restrict Chinese access to advanced semiconductor technologies.
Deal
Trump's order prohibits HieFo's ownership of Emcore assets
The executive order also prohibits HieFo from owning any interest or rights in the Emcore assets, directly or indirectly through its affiliates. CFIUS flagged a national security risk from the deal over potential access to EMCORE's intellectual property and expertise. The President's order requires HieFo to divest all interests and rights in the EMCORE digital chips business to mitigate this risk.
Acquisition specifics
HieFo's acquisition of Emcore's semiconductor assets
The deal in question saw aerospace and defense specialist Emcore Corp selling its semiconductor and wafer fabrication business to HieFo for $2.92 million, including about $1 million in liabilities. Founded by Dr. Genzao Zhang and Harry Moore, HieFo had promised to continue innovation with the technology acquired from Emcore for purposes such as artificial intelligence (AI).
Ownership change
Emcore's transition to private ownership
Emcore was a publicly traded firm when the HieFo deal was announced, but it went private last year under investment company Charlesbank Capital Partner. The company has not yet commented on Trump's order regarding the semiconductor deal.