US President Donald Trump signed an order on Friday (Dec. 2) blocking the sales of an American chips company to a Chinese-linked company, citing national security risk.
The deal was signed in 2024 involving an American chips company, Emcor, selling its specialised chips businesses to HieFo, a US registered firm in Delaware controlled by a Chinese citizen.
The assets comprise “digital chips and related wafer design, fabrication, and processing businesses,” according to the order.
Trump said in the order that “there is credible evidence” showing HieFo, through its acquisition of Emcore’s assets, “might take action that threatens to impair the national security of the United States.”
CFIUS found a national security risk in the transaction, according to a separate statement from the Treasury Department.
The concerns were about potential access to Emcore’s intellectual property, know-how, and expertise, as well as the risk that the supply of chips made by the Emcore Digital Chips business could be diverted from the United States.
The order cites national security risks retroactively prohibiting the transaction and requires Heifo to divest the assets within six months.
Sale of the assets must be approved by the US government with preference for buyers without ties to China.
This move underscores further efforts by the Trump administration to prevent critical semiconductor technology from falling into the hands of those that they believe could threaten national security risks.
