Trump Blocks Chips Deal: A $3 Million Deal That Turned Into a National Security Story

Advanced | January 14, 2026

✨ 혼자서 기사를 소리 내어 읽거나 튜터를 따라 각 단락을 반복해서 읽으세요. 레벨...

The Headline Everyone Noticed

Even though the deal was worth only about $3 million, it still got stopped at the highest level.

In early January, President Donald Trump blocked a chips-related acquisition involving HieFo Corporation, a U.S. photonics firm, and Emcore Corporation, a New Jersey-based aerospace and defense specialist. The government said the decision was about national security and China-related concerns, not money. (Reuters)

Why “Trump blocks chips deal” Matters More Than the Price Tag

A deal from 2024 got pulled back in 2026

Here’s the twist: this wasn’t a “future” deal. According to the White House order, the acquisition was completed on April 30, 2024—but the administration later decided it could still create risk. The order says there is “credible evidence” that HieFo is controlled by a citizen of the People’s Republic of China, and that the transaction “might take action that threatens to impair the national security of the United States.” (The White House)

What Exactly Was Being Bought?

The assets were tied to chips and a specialized manufacturing process

The transaction covered Emcore’s digital chips business and related wafer design, fabrication, and processing, including a semiconductor manufacturing facility, according to the Treasury Department. (U.S. Treasury)

Reuters reported Emcore previously said HieFo purchased Emcore’s chips business and indium-phosphide wafer-fabrication operations for $2.92 million. (Reuters)

What CFIUS Said the Risk Was

It wasn’t about “chips in general”—it was about access and supply

The Committee on Foreign Investment in the United States (CFIUS) reviewed and investigated the transaction under the Defense Production Act.

Treasury said CFIUS identified a national security risk linked to:

potential access to Emcore’s intellectual property, proprietary know-how, and expertise, and
The potential diversion of the supply of indium phosphide chips away from the United States.

That’s why the President’s order directs HieFo to divest all interests and rights in the Emcore digital chips business. (U.S. Treasury)

What Happens Next

The order gives a deadline and strict “hands off” rules

The White House order says the transaction is prohibited, and HieFo must divest within 180 days (unless CFIUS extends the timeline). It also restricts access: until divestment is verified, HieFo can’t grant access to the Emcore assets or non-public technical information to non-HieFo personnel unless CFIUS approves it in writing. (The White House)

Treasury also noted that HieFo did not file the transaction with CFIUS until after CFIUS’s non-notified team investigated it—basically, the government found it first. Treasury used the moment to remind companies to think carefully about whether a deal could fall under CFIUS jurisdiction. (U.S. Treasury)

Who Is HieFo?

A small company, but with leadership ties to the seller

Reuters reported that HieFo said it was co-founded by Genzao Zhang (a former Emcore vice president of engineering) and Harry Moore (whose LinkedIn described him as a former senior sales director at Emcore). The news agency also noted that HieFo and Emcore were not immediately reachable for comment at the time of reporting (Reuters).

Vocabulary

Acquisition (noun) – the act of buying a company or business assets.
Example: The acquisition looked small, but it triggered a major security review.
Divest (verb) – to sell or get rid of ownership in something.
Example: The order says HieFo must divest the Emcore chip assets.
National security (noun) – protection of a country’s safety, systems, and strategic interests.
Example: Officials said the decision was based on national security concerns.
Controlled (adjective) – directed or influenced by someone with power over it.
Example: The order said the company was controlled by a Chinese citizen.
Intellectual property (IP) (noun) – protected ideas, inventions, and designs.
Example: CFIUS worried about access to intellectual property and know-how.
Proprietary (adjective) – privately owned and not shared publicly.
Example: The chips involved proprietary manufacturing expertise.
Diversion (noun) – the act of redirecting something away from its intended destination.
Example: Officials mentioned the risk of diversion of chip supply away from the U.S.
Jurisdiction (noun) – legal authority to review or control something.
Example: Treasury warned companies to consider whether CFIUS has jurisdiction.
Wafer fabrication (noun) – making the thin semiconductor slices used to build chips.
Example: The deal included wafer fabrication operations.
Non-notified transaction (noun) – a deal not voluntarily filed for review, but discovered by regulators.
Example: Treasury said CFIUS’s non-notified team investigated the transaction.

Discussion Questions (About the Article)

Why did the U.S. government say this deal created a national security risk?
What specific risks did Treasury say CFIUS identified?
Why do you think the government cared about access to IP and “know-how”?
What might happen to a business when it is forced to divest assets within a short timeline?
What lesson does Treasury seem to be sending to other companies about reporting deals?

Discussion Questions (About the Topic)

Where should governments draw the line between open markets and national security?
Should small-dollar deals get the same scrutiny as multi-billion-dollar deals? Why or why not?
What kinds of industries should be “extra protected” during foreign investment reviews?
If a deal is already completed, do you think it should still be reversible? Why?
How can companies reduce risk when selling sensitive technology across borders?

Related Idiom

“Hit the brakes” – to stop or slow down suddenly because something feels risky.

Example: “CFIUS hit the brakes on the deal once it saw potential IP and supply-chain risks.”

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This article was inspired by: Reuters, The White House, and U.S. Department of the Treasury.