In a significant move to protect American intellectual property, President Donald Trump has issued an executive order to unwind a Biden-era chip deal, citing “credible evidence” that Chinese control of the technology threatens U.S. national security.
President Donald Trump signed an executive order Friday (January 2, 2026) blocking the acquisition of critical semiconductor-related assets from Emcore Corp by HieFo Corp, a Delaware-based firm controlled by a Chinese citizen. The order requires the immediate unwinding of the $2.92 million transaction, marking one of the first major “look-back” enforcement actions of 2026 aimed at cutting off Beijing’s access to advanced American hardware.
The transaction, which was initially completed in April 2024, involved New Jersey-based Emcore an aerospace and defense specialist selling its digital chips and wafer fabrication operations to HieFo.
- The Security Risk: The Committee on Foreign Investment in the United States identified a risk that HieFo’s ownership could lead to the diversion of indium phosphide chips away from the U.S. and provide unauthorized access to proprietary technical know-how.
- Divestment Order: Under the executive order, HieFo has been given 180 days to divest all interests and rights in the Emcore assets. Until the divestment is done, the company is banned from sharing any non-public technical information with third parties.
- Weekly Compliance: In an unusually strict measure, HieFo must certify its compliance with the order weekly and allow U.S. government officials designated by CFIUS to inspect its premises.
The move shows the administration’s hardening stance on even small-scale investments if they involve sensitive sectors like defense or AI. While the deal was valued at less than $3 million, officials stressed the “national security risk” isn’t measured by the dollar amount but by the strategic value of the technology. Indium phosphide is critical for high-speed fiber-optic communications and advanced sensing systems used in military hardware.
“The Transaction is hereby prohibited, and ownership by HieFo of any interest or rights in any of the Emcore Assets… is also prohibited,” the executive order stated. Trump concluded that the current ownership “threatens to impair the national security of the United States.”
The unwinding of this 2024 deal signals the Trump administration plans to use CFIUS to retroactively review and potentially block hundreds of tech deals finalized over the past four years. Any potential buyer for the divested Emcore assets must now be vetted by CFIUS, which keeps a 30-day right to object to any new sale. This “regulatory shadow” is expected to create significant uncertainty for cross-border M&A in the semiconductor space throughout 2026.
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