President Trump has ordered HieFo Corporation, a Delaware-based company considered a foreign person under U.S. law, to divest its interests in certain assets of EMCORE Corporation, based in New Jersey. The assets in question include EMCORE’s digital chips business and related semiconductor manufacturing operations.
The Committee on Foreign Investment in the United States (CFIUS) reviewed the transaction as authorized by Section 721 of the Defense Production Act of 1950. According to CFIUS, the review identified national security risks related to possible access to EMCORE’s intellectual property and expertise, as well as concerns about diverting indium phosphide chip supplies away from the U.S. In response, President Trump issued an order requiring HieFo to divest all rights and interests in EMCORE’s digital chips business.
HieFo did not submit details of the transaction to CFIUS until after it was investigated by CFIUS's non-notified team. Authorities granted under FIRRMA and recent funding have strengthened CFIUS’s capacity to identify transactions that were not voluntarily disclosed.
CFIUS stated: “Parties to transactions should carefully consider whether or not any transaction they may be undertaking may be subject to CFIUS jurisdiction, including whether or not the transaction has a potential nexus to U.S. national security.”
The committee explained that its process is focused solely on identifying and mitigating national security risks associated with covered transactions. Each case is reviewed individually based on specific facts and circumstances: “As such, the disposition of each CFIUS case is reflective only of CFIUS’s analysis of that specific transaction and not indicative of a general position on the transaction parties, countries, or industries involved.”
CFIUS operates as an interagency committee chaired by the Secretary of the Treasury. Its members include top officials from State, Defense, Commerce, Energy, Homeland Security departments; Attorney General; Director of White House Office of Science and Technology Policy; U.S. Trade Representative; with additional participation from other agencies when appropriate.
Treasury’s Office of Investment Security leads efforts to identify transactions that have not been voluntarily reported under Section 721. If such a non-notified deal could impact national security or involves real estate covered by regulations, CFIUS may reach out for further information or request a formal filing.
Members of the public can contact Treasury with relevant information at CFIUS.tips@treasury.gov.
