Former President Donald Trump has ordered the reversal of a small but sensitive technology deal, citing concerns that it could threaten U.S. national security. The decision centers on a $2.9 million transaction involving computer chip technology that dates back to 2024, when the deal was approved under the Biden administration.
While the dollar value of the transaction is modest, the technology involved, and the people behind it, have placed the deal under intense scrutiny. Trump’s order highlights how even relatively small acquisitions can trigger major policy actions when advanced technology and foreign ownership intersect.
What the Deal Involved
The transaction in question involved Emcore Corp., an aerospace and defense-focused technology company. In May 2024, Emcore sold its computer chips and wafer fabrication operations to a private firm called HieFo Corp. for $2.92 million. The deal also included HieFo taking on roughly $1 million in liabilities, bringing the total value close to $4 million in economic terms.
At the time, the sale attracted little public attention. Emcore was struggling financially and was in the process of reshaping its business. For Emcore, the sale was seen as a way to streamline operations and reduce debt.
HieFo, on the other hand, positioned the acquisition as a growth opportunity. The company said it would continue developing the chip technology for advanced uses, including applications tied to artificial intelligence.
Why Trump Intervened
Trump’s executive order, issued on Friday, requires HieFo to fully divest the chip technology within 180 days. According to the order, the U.S. government has “credible evidence” that HieFo’s ownership structure poses a national security risk.
Specifically, the concern centers on the citizenship of the company’s leadership. Trump’s order states that the current owner is a citizen of the People’s Republic of China, raising fears that sensitive technology could ultimately benefit a foreign government or military.
The executive order does not accuse HieFo of wrongdoing, but it makes clear that the risk alone is enough to justify intervention. The order effectively unwinds a deal that had already closed and been operating for months.
What Is HieFo?
HieFo Corp. was founded by Dr. Genzao Zhang and Harry Moore. Zhang previously served as vice president of engineering at Emcore before becoming HieFo’s chief executive. After the deal closed, HieFo announced that much of the work would continue at the same facility in Alhambra, California, with many of the same employees.
In public statements following the acquisition, Zhang said the company planned to push forward with innovative chip solutions, including products designed to support artificial intelligence systems.
Despite the attention generated by Trump’s order, HieFo has not publicly commented on the decision. Requests for comment following the announcement went unanswered.
Emcore’s Changing Ownership
At the time of the HieFo transaction, Emcore was still a publicly traded company. However, later in 2024, Emcore was taken private by Charlesbank Capital Partners, a private investment firm. That buyout marked the end of Emcore’s time on public markets and further reduced public visibility into its operations.
This shift also complicates the situation, as the divestment order now touches assets that were sold before Emcore’s ownership change. Still, the focus of Trump’s action is squarely on HieFo and the technology it acquired.
Why Chips Matter So Much
Computer chips have become one of the most sensitive and strategic industries in the global economy. They are essential not only for consumer electronics, but also for military systems, communications networks, artificial intelligence, and critical infrastructure.
Over the past decade, U.S. policymakers from both political parties have increasingly treated chip technology as a national security issue. Restrictions on exports, foreign investment reviews, and government subsidies have all become tools to keep advanced chip capabilities under U.S. control.
Trump’s order fits squarely into this broader trend. Even though the Emcore-HieFo deal was small, the underlying technology was developed within the U.S. defense and aerospace ecosystem. That alone makes it subject to closer review.
Analysis: Why This Deal Matters Beyond Its Size
At first glance, a $2.9 million transaction may seem insignificant in a world where chipmakers routinely announce deals worth billions. But this case shows that price does not determine importance when national security is involved.
1. Politics Is Driving Technology Policy
Trump’s action sends a clear signal: technology policy will remain aggressive and highly political, regardless of who is in office. The deal was approved under the Biden administration, yet reversed later under Trump using executive authority.
For investors and companies, this creates uncertainty. A deal that clears regulatory review today could still face political risk tomorrow, especially if leadership in Washington changes.
2. Ownership Scrutiny Is Intensifying
This case reinforces that U.S. authorities are paying close attention not just to where a company is based, but who controls it. Citizenship, leadership history, and even past employment relationships now matter deeply in technology deals.
Companies operating in sensitive sectors like chips, AI, or defense should expect deeper background reviews and longer approval timelines.
3. Small Companies Are Not Exempt
Much of the public focus tends to be on major players like Nvidia, Intel, or TSMC. However, this decision shows that smaller firms and niche technologies are equally vulnerable to government intervention.
Startups and mid-sized companies working on advanced technology may face challenges attracting foreign capital or buyers, even if their operations appear benign.
4. A Warning for Private Equity and Buyers
The Emcore case also highlights risk for investors and private equity firms. Assets acquired cheaply during restructurings or downturns may later attract regulatory attention if they involve sensitive technology.
This could affect valuations, exit plans, and deal structures across the tech and defense sectors.
Bottom Line
Trump’s order to unwind the HieFo chip deal is less about the money and more about control. It underscores how technology, geopolitics, and national security are now deeply intertwined.
For businesses and investors, the message is clear: in today’s environment, who owns technology can matter more than how much it costs. Even small transactions can become flashpoints when they touch on critical industries like semiconductors and artificial intelligence.
As competition between global powers intensifies, similar cases are likely to become more common — and more disruptive — across the technology and financial landscape.