On Friday, President Trump signed an executive order forcing HieFo Optoelectronics to divest semiconductor-related assets acquired from Emcore Corporation, citing national security concerns. The order prohibits HieFo Optoelectronics from retaining any ownership or other rights over the assets of Emcore Corporation and gives the company up to 180 days to divest these assets. The divestiture process will be supervised by the Committee on Foreign Investment in the United States (CFIUS), which has the authority to audit the company and implement additional measures to ensure compliance.
The Committee on Foreign Investment is responsible for reviewing foreign investments in American companies for potential national security risks. If necessary, the committee can provide additional time for review. The presidential order signed under the Defense Production Act states that HieFo Optoelectronics, established and controlled by Chinese citizens, poses a potential threat to U.S. national security. The CEO and co-founder, Genzao Zhang, is a Chinese citizen.
In 2024, the company completed the acquisition of Emcore Corporation’s digital chip business, wafer design, processing, and manufacturing operations, including the production of Indium Phosphide (InP) wafers, for $2.92 million. The executive order emphasizes that there is reliable evidence indicating that HieFo Optoelectronics “may take actions that threaten to impair U.S. national security.”
Under Trump’s directive, HieFo Optoelectronics is prohibited from granting access to assets or any proprietary technical information until divestiture is completed and verified. The company also faces strict restrictions on restructuring, transferring, or relocating operations. HieFo Optoelectronics, registered in Delaware with headquarters in Alhambra, California, describes itself on its official website as a “U.S.-based photonics manufacturing company dedicated to providing advanced optical chip solutions for data centers, telecommunications, AI connectivity, and optical sensing.”
This move by the Trump administration aims to limit China’s access to advanced U.S. semiconductor technology. Semiconductor experts note that Emcore Corporation’s technology has potential military applications and can enhance artificial intelligence computer systems, raising government concerns. Following a review, the Committee on Foreign Investment requested the complete annulment of the acquisition transaction, requiring HieFo Optoelectronics to sell all assets obtained from Emcore Corporation.
Beijing has been seeking advanced technology in U.S. chip manufacturing to achieve its “technological leapfrog.” Through initiatives such as “Made in China 2025,” large funds (with billions of dollars in subsidies), and the 14th Five-Year Plan, China aims to increase investments and promote localization of advanced chip manufacturing.
However, China is still impacted by U.S. export controls and faces restrictions in obtaining key equipment like high-end EUV lithography machines. The Trump administration is working to close loopholes and combat Beijing’s theft of U.S. advanced chip technology.