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Trump Shuts Down $2.9M Chip Deal Over China Security Fears

MarketDash Editorial Team
14 hours ago
President Trump blocked a small but strategically significant semiconductor acquisition, ordering divestment within 180 days as part of broader efforts to limit Chinese access to U.S. chip technology.

President Donald Trump just put the brakes on a semiconductor deal that's small in dollar terms but carries outsized strategic weight. On Friday, he signed an executive order blocking HieFo Corp.'s acquisition of chip assets from Emcore Corp. (EMKR), pointing to national security risks connected to China.

The president stated there's "credible evidence" that "HieFo Corporation, a company organized under the laws of Delaware (HieFo) and controlled by a citizen of the People's Republic of China...might take action that threatens to impair the national security of the United States." HieFo might be a Delaware company on paper, but the Chinese ownership is what caught Washington's attention.

Last year, the companies wrapped up an agreement to sell Emcore's New Jersey-based chips business and indium phosphide wafer fabrication operations for roughly $2.9 million. That's pocket change in the world of semiconductor M&A, but sometimes it's not about the price tag—it's about what technology changes hands and who ends up controlling it.

The executive order doesn't just block the deal. It mandates that HieFo unwind everything, divesting all interests and rights in the Emcore assets within 180 days. The Committee on Foreign Investment in the United States (CFIUS) will be watching to make sure compliance happens, giving the directive some real enforcement teeth.

A Familiar Playbook

This isn't new territory for the administration or U.S. regulators. Trump's action is the latest salvo in Washington's ongoing campaign to limit Chinese access to advanced semiconductor technologies. Just last month, his administration announced plans to slap tariffs on Chinese semiconductor imports starting in June 2027.

There's precedent here, too. Back in 2017, CFIUS recommended blocking several acquisitions, including Oregon-based Lattice Semiconductor (LSCC), over similar national security worries. Executive intervention in foreign deals involving critical technologies has been part of the U.S. policy toolkit for years now.

The Bigger Picture on Tech and China

Trump's HieFo-Emcore decision slots into a broader pattern of moves designed to counter China's tech ambitions. In September 2025, Trump extended the deadline for TikTok's divestment from Chinese parent company ByteDance, following conversations with Chinese President Xi Jinping. That saga continues to unfold.

Meanwhile, lawmakers on Capitol Hill have been pushing legislation to prevent the administration from giving China expanded access to cutting-edge artificial intelligence chips from companies like Nvidia Corp (NVDA) and Advanced Micro Devices, Inc (AMD) for the next 2.5 years. The message is consistent: keep advanced semiconductor technology out of Chinese hands wherever possible.

Blocking the HieFo-Emcore deal might seem like small potatoes compared to multibillion-dollar transactions, but it reinforces a clear strategic priority—maintaining U.S. technological superiority and pushing back against China's growing footprint in the global tech landscape. When it comes to semiconductors, apparently no deal is too small to matter.

Back to Stock Market News

Trump Shuts Down $2.9M Chip Deal Over China Security Fears

MarketDash Editorial Team
14 hours ago
President Trump blocked a small but strategically significant semiconductor acquisition, ordering divestment within 180 days as part of broader efforts to limit Chinese access to U.S. chip technology.

President Donald Trump just put the brakes on a semiconductor deal that's small in dollar terms but carries outsized strategic weight. On Friday, he signed an executive order blocking HieFo Corp.'s acquisition of chip assets from Emcore Corp. (EMKR), pointing to national security risks connected to China.

The president stated there's "credible evidence" that "HieFo Corporation, a company organized under the laws of Delaware (HieFo) and controlled by a citizen of the People's Republic of China...might take action that threatens to impair the national security of the United States." HieFo might be a Delaware company on paper, but the Chinese ownership is what caught Washington's attention.

Last year, the companies wrapped up an agreement to sell Emcore's New Jersey-based chips business and indium phosphide wafer fabrication operations for roughly $2.9 million. That's pocket change in the world of semiconductor M&A, but sometimes it's not about the price tag—it's about what technology changes hands and who ends up controlling it.

The executive order doesn't just block the deal. It mandates that HieFo unwind everything, divesting all interests and rights in the Emcore assets within 180 days. The Committee on Foreign Investment in the United States (CFIUS) will be watching to make sure compliance happens, giving the directive some real enforcement teeth.

A Familiar Playbook

This isn't new territory for the administration or U.S. regulators. Trump's action is the latest salvo in Washington's ongoing campaign to limit Chinese access to advanced semiconductor technologies. Just last month, his administration announced plans to slap tariffs on Chinese semiconductor imports starting in June 2027.

There's precedent here, too. Back in 2017, CFIUS recommended blocking several acquisitions, including Oregon-based Lattice Semiconductor (LSCC), over similar national security worries. Executive intervention in foreign deals involving critical technologies has been part of the U.S. policy toolkit for years now.

The Bigger Picture on Tech and China

Trump's HieFo-Emcore decision slots into a broader pattern of moves designed to counter China's tech ambitions. In September 2025, Trump extended the deadline for TikTok's divestment from Chinese parent company ByteDance, following conversations with Chinese President Xi Jinping. That saga continues to unfold.

Meanwhile, lawmakers on Capitol Hill have been pushing legislation to prevent the administration from giving China expanded access to cutting-edge artificial intelligence chips from companies like Nvidia Corp (NVDA) and Advanced Micro Devices, Inc (AMD) for the next 2.5 years. The message is consistent: keep advanced semiconductor technology out of Chinese hands wherever possible.

Blocking the HieFo-Emcore deal might seem like small potatoes compared to multibillion-dollar transactions, but it reinforces a clear strategic priority—maintaining U.S. technological superiority and pushing back against China's growing footprint in the global tech landscape. When it comes to semiconductors, apparently no deal is too small to matter.