The silicon toll: Trump’s transactional strategy to rewire the global chip war
In the nondescript offices of a New Jersey aerospace and defence firm, a $2.92m asset sale seemed, on paper, like a minor corporate footnote. But in the high-stakes theatre of global semiconductor supremacy, no transaction is too small to escape the notice of the White House.
President Donald Trump on Friday issued a formal order blocking the acquisition of certain semiconductor assets from Emcore by HieFo Corp, a Delaware-registered firm. Citing acute national security concerns, the move marks a definitive line in the sand for an administration that is increasingly treating the microchip supply chain as both a fortress to be guarded and a commodity to be taxed.
The HieFo-Emcore block serves as the latest chapter in a broader, more complex narrative of US-China relations—one where the White House is pivoting away from the blanket restrictions of the previous administration in favour of a more transactional, “America First” security model.
The Pivot: From Protection to Profit
By ordering the divestment of HieFo’s interests within 180 days, Trump has signalled that even small-scale acquisitions involving Chinese nationals will face “zero tolerance” if they touch sensitive intellectual property like Indium Phosphide chips. This micro-level enforcement comes just weeks after the President proposed a macro-level shift: allowing tech giants like Nvidia to resume high-end exports to China, provided the US government receives a 25% cut of the proceeds. It is a strategy that seeks to protect American innovation while ensuring the US Treasury profits from the global demand for silicon.
The Anatomy of a Blocked Deal
The HieFo acquisition, completed in 2024, involved the purchase of Emcore’s Indium Phosphide chip-making operations. While the $2.92 million price tag was modest, the White House order stated that HieFo is “controlled by a national of the People’s Republic of China.”
According to the presidential order, this control led to the belief that the owners might “take action that threatens to impair the national security of the United States.” Although the White House did not name the specific individual or provide a detailed breakdown of the threat, the US Treasury Department confirmed that the Committee on Foreign Investment in the United States (CFIUS) had identified significant risks during its investigation.
HieFo was reportedly co-founded by Jianzao Zhang, a former vice president of engineering at Emcore, and Harry Moore, a former senior sales director at the same firm. The President’s directive was unequivocal: HieFo must “abandon all interests and rights in Emcore assets, wherever located.”
From Restrictions to Revenue
This granular crackdown on HieFo stands in sharp contrast to Trump’s recent diplomatic overtures regarding larger industry players. In early December, Trump revealed he had told Chinese President Xi Jinping that the US would permit Nvidia to export its advanced H200 chips to approved customers in China.
The caveat, however, is purely financial. Trump specified that 25% of the deal value must be paid directly to the United States. “President Xi’s response was positive,” Trump noted, arguing that the policy would support American jobs, bolster domestic manufacturing, and provide a direct benefit to US taxpayers.
This approach represents a stinging critique of the previous administration. Trump described Joe Biden’s chip policies as forcing American companies to spend billions on “crippled products” that no one wanted—a move he claimed slowed innovation and harmed the American worker.
The Global Board
The shift in policy arrives as Washington acknowledges a sobering reality: previous restrictions may have slowed, but did not stop, Chinese technological advancement. White House officials have noted that Chinese firms such as DeepSeek and Alibaba have continued to develop sophisticated artificial intelligence models, while Huawei has made significant strides in domestic hardware.
Furthermore, the US remains in a precarious position. While it fights to reduce its reliance on Taiwanese fabrication plants, China continues to hold a dominant hand in the supply of rare earth minerals—the literal “earth” required to build the high-tech future.
The Kicker
As HieFo begins the 180-day countdown to offload its Emcore assets, the President has left the door open for further intervention. “I reserve my right to issue additional orders… as I deem necessary to protect the national security of the United States,” Trump stated. It is a reminder that in the new era of the chip wars, the White House is not just watching the gates—it is also checking the receipts.
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