U.S. President Donald Trump has ordered the forced divestment of a semiconductor technology deal valued at approximately $2.9 million, citing national security concerns tied to foreign ownership.

The executive order requires HieFo Corp. to relinquish control of computer chip and wafer fabrication assets it acquired from Emcore Corp. in 2024. The administration says there is credible evidence the current owner is a citizen of the People’s Republic of China, triggering concerns over sensitive technology control.

HieFo has been given 180 days to divest the assets.

Semiconductor manufacturing remains a strategic priority for U.S. national security.

Advanced chips underpin defense systems, aerospace platforms, artificial intelligence workloads, and critical infrastructure. As geopolitical tensions continue to shape technology policy, ownership and control of chip fabrication capabilities have become a focal point of U.S. security reviews.

While many technology transactions draw scrutiny at the time of announcement, some deals receive limited attention until political leadership or threat assessments change.

The transaction at issue was completed in May 2024 during the administration of Joe Biden.

Under the deal, Emcore sold its computer chip and wafer fabrication operations to HieFo for $2.92 million, a figure that included roughly $1 million in assumed liabilities. At the time, the sale attracted little public or regulatory attention.

President Trump’s new executive order reverses that posture, directing HieFo to divest the acquired technology within six months due to concerns over foreign control and potential security exposure.

The assets involved include computer chips and wafer fabrication operations, technologies that sit upstream in the semiconductor supply chain.

Wafer fabrication is a foundational capability, enabling the production of chips used across defense, aerospace, and emerging AI systems. Control over fabrication processes can influence design access, intellectual property exposure, and long-term manufacturing capacity.

According to post-acquisition statements, HieFo intended to maintain operations in Alhambra, California, using largely the same workforce previously employed by Emcore, with future development tied to advanced and AI-oriented applications.

The divestment order introduces immediate operational and financial uncertainty.

HieFo must now identify a qualified buyer or unwind ownership under a fixed timeline, potentially disrupting employees, supply agreements, and development plans. For Emcore, which was later taken private by Charlesbank Capital Partners, the decision reopens questions about the downstream implications of asset sales involving sensitive technology.

More broadly, the action signals heightened enforcement risk for smaller, lower-profile technology transactions.

This move reinforces the expanding scope of national security oversight in the technology sector.

Even relatively small deals—both in dollar value and public visibility—can face retroactive scrutiny when advanced manufacturing or strategic technologies are involved. The case highlights how ownership nationality, rather than operational location alone, can drive regulatory intervention.

For companies operating in semiconductors or AI-adjacent fields, geopolitical risk now extends well beyond traditional defense contracts.

The executive order cites “credible evidence” regarding ownership ties but does not detail the underlying intelligence or review process.

HieFo, founded by Dr. Genzao Zhang and Harry Moore, has not publicly responded to the order. Zhang, formerly a vice president of engineering at Emcore, previously emphasized innovation and AI-focused development as core goals following the acquisition.

Absent further disclosure, the case underscores the opaque nature of national security determinations in sensitive technology domains.