What's Happening?
President Donald Trump has issued an executive order to unwind a $2.9 million deal involving the sale of computer chips and wafer fabrication operations from Emcore Corp. to HieFo Corp. The order mandates
that HieFo divest the technology within 180 days, citing credible evidence that the current owner is a citizen of the People's Republic of China, which poses a threat to U.S. security interests. The deal, initially completed in May 2024 under President Joe Biden's administration, involved the transfer of technology intended for use in artificial intelligence and other innovative solutions. HieFo, founded by Dr. Genzao Zhang and Harry Moore, had planned to continue operations in Alhambra, California, with the same team of employees.
Why It's Important?
This executive order underscores the ongoing concerns about foreign ownership of U.S. technology assets, particularly those with potential military or strategic applications. The decision reflects heightened scrutiny and protective measures against foreign investments that could compromise national security. It also highlights the broader geopolitical tensions between the U.S. and China, especially in the technology sector. The divestment order could impact HieFo's business operations and strategic plans, while also serving as a warning to other foreign entities considering similar acquisitions in sensitive industries.
What's Next?
HieFo must comply with the divestment order within the specified 180-day period. The company may seek legal recourse or attempt to negotiate terms with the U.S. government. This situation could prompt other companies with foreign ties to reassess their U.S. investments and operations. Additionally, the order may lead to further regulatory actions or legislative proposals aimed at tightening control over foreign investments in critical technology sectors.
