President Donald Trump issued an executive order blocking HieFo Corp.'s acquisition of semiconductor-related assets from Emcore Corp., citing national security concerns. The order, released Friday, targets the Delaware-based company's $2.92 million acquisition of computer chips and wafer fabrication operations, marking the latest move by the administration to crack down on Chinese access to advanced semiconductor technologies.

Deal Structure and CFIUS Review

The transaction, completed in 2024, involved New Jersey-based Emcore Corp. selling its chips business and indium phosphide wafer fabrication operations. The Committee on Foreign Investment in the United States (CFIUS), a federal panel that reviews deals involving American companies on national security grounds, conducted a review of the transaction.

The Treasury Department stated that "CFIUS identified a national security risk arising from the transaction relating to potential access to Emcore's intellectual property, proprietary know-how, and expertise and to the potential diversion of supply of indium phosphide chips manufactured by the Emcore Digital Chips Business away from the United States."

Security Concerns and Chinese Control

Trump's executive order specifically notes that HieFo Corp., while Delaware-based, "was organized and is controlled by a Chinese citizen." The security concerns center around potential access to critical semiconductor technology and intellectual property. The order states that the deal "threatens to impair the national security of the United States."

The acquisition targeted assets comprising "the digital chips and related wafer design, fabrication, and processing businesses" of Emcore Corp., technology with applications in aerospace, defense, and artificial intelligence solutions.

Divestment Requirements

HieFo Corp. has been directed to divest the acquired assets within 180 days unless CFIUS grants additional time. The 180-day timeline reflects the administration's urgency in addressing perceived threats to US security interests in the semiconductor sector. The company has not yet responded to requests for comment regarding the divestment order.

Industry Implications

The executive order demonstrates how deals completed under previous administrations can face retroactive review when national security concerns are identified. The focus on indium phosphide chip technology highlights the strategic importance of specialized semiconductor capabilities in military and civilian infrastructure, particularly given the ongoing US-China technology competition.

President Trump has escalated his criticism of Federal Reserve Chair Jerome Powell, stating he might still fire the current Fed leader while maintaining his January timeline for announcing Powell's replacement. Speaking at a press conference at his Mar-a-Lago resort, Trump declared that Powell "should resign" and expressed his desire to remove him from the position.

Firing Threats and Leadership Uncertainty

Trump's latest comments represent a significant escalation from his previous stance, with the president now openly considering Powell's dismissal. "Maybe I still might," Trump told reporters when asked about firing Powell, referencing his earlier consideration of Powell's ouster in July, which he abandoned after negative financial market reactions.

January Announcement Timeline Maintained

Despite the firing threats, Trump confirmed he maintains a preferred candidate for Fed Chair and will announce the selection "January sometime." The president indicated his choice "hasn't changed" but emphasized there's "plenty of time" for the announcement. This timeline allows for strategic positioning while keeping financial markets in uncertainty about Powell's immediate future.

Candidate Selection Process

Trump has not specified his leading chair candidate, though National Economic Council Director Kevin Hassett has been viewed as the frontrunner. Other potential candidates include former Fed governor Kevin Warsh, current Fed governors Christopher Waller and Michelle Bowman, and BlackRock's Rick Rieder. The president's decision-making process has featured contradictory statements, previously claiming he'd narrowed the pool to one candidate before indicating multiple contenders remain under consideration.

Policy Disagreements and Legal Threats

Trump's criticism centers on Powell's interest rate policy, with the president seeking more aggressive rate cuts to lower mortgage costs. While the Federal Reserve has reduced rates at its last three meetings, officials signaled only one rate cut likely in 2026. Trump announced he's considering a "gross incompetence" lawsuit against Powell related to an ongoing Fed renovation project, adding legal pressure to the leadership dispute.

Market and Economic Implications

The uncertainty surrounding Powell's position creates potential volatility for financial markets, particularly given Trump's previous retreat from firing Powell due to negative market reactions. Powell's decision to remain on the Fed Board through 2028, even if his chair term ends, would limit Trump's ability to reshape Fed leadership completely.