President Trump recently took action to halt a $2.9 million deal involving computer chips, citing concerns over U.S. security. This deal was initially made under President Biden’s administration in May 2024, where Emcore Corp. sold its computer chip operations to HieFo Corp. for almost $3 million, which also included around $1 million in liabilities.
Trump’s decision demands that HieFo divest this technology within 180 days. He pointed to “credible evidence” showing that HieFo’s leadership has ties to China, which raises worries about national security.
HieFo was co-founded by Dr. Genzao Zhang and Harry Moore. After the acquisition, HieFo announced that the original team in Alhambra, California, would continue to work on the technology. Zhang, who was previously Emcore’s vice president of engineering, expressed plans to develop innovative technology, including for artificial intelligence.
Surprisingly, this transaction didn’t receive much attention when it was completed. However, recent concerns about foreign ownership of critical technology have sparked debate among lawmakers and security experts. According to a 2022 survey by the National Defense Industrial Association, nearly 70% of defense contractors worry about foreign influence in the tech sector.
This situation is reminiscent of past events, such as the failed acquisition of the U.S. company Smithfield Foods by a Chinese firm in 2013. Public anxiety over foreign ownership has been a recurring theme, often propelled by geopolitical tensions.
Such events highlight the importance of balancing business operations with national security. While innovation is crucial for growth, it’s equally essential to safeguard technology that could impact national interests.
For more detailed information on this topic, you can read about security implications in tech acquisitions from reputable sources like the U.S. Department of Defense or explore insights from industry experts.
As this situation evolves, it will be interesting to see how it shapes future tech deals and government regulations.
