President Donald Trump has formally blocked a $2.9 million deal that have led a computer chip company sold to investors out of concern and could endanger U.S. national security. On Friday, Jan. 2, 2026, the White House ordered a company named HieFo Corp to relinquish technology it had just purchased from an American defence contractor after expressing deep concerns about links between the company and China.
Why the Deal Was Blocked
The trouble revolves around a business deal that took place in 2024. At the time, a company called Emcore, which produces high-tech parts for aeroplanes and the military, sold its computer chip business to HieFo Corp. The deal was initially little noticed. But after an inquiry by a government entity that monitors foreign investments (CFIUS), the President determined that the deal posed risks.
The White House said there’s “credible evidence” that HieFo is operated by a Chinese citizen. Mr Trump had feared that the technology could be used in ways that harm the United States. He has also ordered HieFo to dispose of the business that it bought from Emcore, within 180 days, and for all secret technical information they own to be destroyed.
Types of Technology Involved
The parts of the business being removed are highly specialised. They entail producing something called indium phosphide wafers. Those are thin slices of material that advanced computer chips are made from, which can be used for powerful internet and laser technology. And because these chips are used in military gear and aerospace, the United States carefully chooses who owns the factories that produce them.
HieFo was founded by former Emcore managers, including Dr Genzao Zhang who is its CEO Today. And although the firm is based in the United States, American officials have come to believe that it is actually controlled by someone in China. By scuttling the deal, the Trump administration continues its campaign to prevent advanced technology from falling into the hands of global rivals.
A Tougher Stance on China
The move is one piece of a broader campaign to shield American technology. The government has spent the last year clamping down on many small and large business deals connected to China. Just last month, the administration said it would maintain high taxes on Chinese computer chips through at least 2027.
Although this $2.9 million deal is insignificant next to other multi-billion dollar combinations, experts say that it shows the government has its eye on everything. They want to ensure that no morsel of “know-how” or clandestine tech gets out of the country. Now, as the 180-day clock starts ticking and HieFo scrambles to find a new buyer for the chip business, the U.S. government will be watching every step of the sale to ensure that whoever emerges is someone they can trust.
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