Chinese Buyer of EMCORE Assets Faces CFIUS-Ordered Divestiture Over Unfiled 2024 Deal

Foreign investors looking to acquire U.S. technology or semiconductor companies face an obstacle that does not apply to domestic buyers: the Committee on Foreign Investment in the United States, or CFIUS. The committee reviews transactions for national security risks, and certain deals fall under mandatory notification rules. But CFIUS jurisdiction is narrow, and foreign investors can misjudge whether their deal requires filing.

The stakes for guessing wrong are high. In January 2026, President Trump ordered HieFo Corporation, a Chinese-controlled company, to divest assets it had acquired from semiconductor manufacturer EMCORE. The transaction had closed in September 2024 without CFIUS notification. CFIUS's non-notified team identified the deal and opened a review, resulting in a forced divestiture and 180-day compliance deadline. For tech and chip executives, understanding what CFIUS covers, how the committee catches undisclosed deals, and what filing looks like has become essential risk management.

What Counts as a Covered Transaction

CFIUS jurisdiction hinges on two concepts: the identity of the buyer and what the target company does. A covered transaction occurs when a foreign person—an individual, company, or government entity not subject to U.S. jurisdiction—acquires an interest in a U.S. business involved in critical technology, critical infrastructure, or sensitive personal data. The foreign person does not need to gain control; even minority stakes can trigger mandatory filing.

A U.S. business is deemed involved in critical technology if it produces, designs, tests, manufactures, fabricates, or develops technology subject to U.S. export controls or technology identified as critical to national security. The export control regimes that matter include the International Traffic in Arms Regulations, or ITAR, and the Export Administration Regulations, or EAR. Semiconductors, particularly advanced chips, fall clearly into this category.

For semiconductor deals, CFIUS focuses on chips with potential national security applications. The indium phosphide chips that EMCORE manufactured, which CFIUS cited in the HieFo order, exemplify the kind of specialized semiconductor that draws scrutiny.

Mandatory Filing Thresholds and Timing

Notification to CFIUS is usually voluntary, but Congress established mandatory filing requirements under the Foreign Investment Risk Review Modernization Act, or FIRRMA. One mandatory-filing category covers any covered transaction in which a foreign person acquires an interest in a U.S. business that produces, designs, tests, manufactures, fabricates, or develops critical technology; a declaration is required regardless of the size of the stake.

A second mandatory-filing category applies to foreign governments directly: under FIRRMA's implementing regulations, a covered transaction in which a foreign government (other than U.S. allies including Canada, Australia, and the United Kingdom) acquires a substantial interest in specified types of U.S. businesses, including critical-technology businesses, is subject to mandatory declaration. China-backed investors receive particular scrutiny on this category.

Parties must file at least 30 days before the transaction closes. The completion date is defined as the earliest moment when any ownership interest changes hands, not when control rights vest. In the HieFo case, the September 2024 closing went unreported until CFIUS's non-notified team investigated after the fact. CFIUS can and does investigate transactions completed without notification.

How CFIUS Catches Non-Notified Deals

CFIUS maintains a non-notified team within the Office of Investment Security, a division of Treasury, dedicated to identifying transactions that should have been filed but were not. According to Arnold & Porter, such deals can come to the Committee's attention through open-source reporting, classified reporting, executive agency referrals, or tips.

In 2025, CFIUS identified thousands of potential non-notified transactions and opened 62 official inquiries, down from 76 in 2024; it formally requested filings in nine cases in 2025, compared with 12 in 2024. The HieFo-EMCORE transaction was among those the non-notified team identified before any party had filed. According to Treasury's statement, HieFo "did not file the transaction with CFIUS until after CFIUS's non-notified team investigated the transaction." CFIUS's ability to identify such deals has been enhanced by authorities Congress provided under FIRRMA.

The non-notified team also maintains a tip line, CFIUS.tips@treasury.gov, where members of the public can submit tips, referrals, or voluntary self-disclosures about suspected undisclosed deals. This creates compliance risk for parties that avoid filing, since tips, referrals, or routine monitoring can surface a deal long after closing.

What Compliance and Divestiture Look Like

When CFIUS issues a divestiture order, as it did for HieFo, the directive carries specific and stringent requirements. HieFo was ordered to divest all interests in EMCORE's digital chips business within 180 days. The order covered contracts, inventory, tangible property, accounts receivable, permits, real property leased or owned, and intellectual property.

Beyond the divestiture timeline, the HieFo order also required immediate access restrictions. HieFo was required to bar non-HieFo personnel from accessing EMCORE's non-public technical information and facilities pending divestiture. The company also had to provide weekly compliance certifications to CFIUS and permit government audits of premises and records. These interim restrictions were meant to prevent diversion of EMCORE's intellectual property and chip supply while divestiture proceeded.

Even parties that file voluntarily face compliance obligations during CFIUS's review. The committee generally completes its review of a notice within a statutory 45-day period; if CFIUS cannot resolve its concerns in that time, it opens a formal investigation of up to 45 additional days, extendable by 15 days in extraordinary circumstances. In 2025, CFIUS requested full notices—effectively reopening a streamlined declaration—in 26 percent of declaration cases, according to the 2025 annual report. Parties should anticipate potential follow-up requests and prepare technical documentation in advance.

Recent Trends in CFIUS Enforcement and Semiconductor Scrutiny

CFIUS activity is rising, particularly in semiconductors. The agency reviewed 347 covered transactions in 2025, up 7 percent from 325 in 2024. More significant is the sector concentration: semiconductor notices—full filings triggering longer review—jumped 325 percent year-over-year, from 4 notices in 2024 to 17 in 2025. Aerospace notices also more than doubled, from six in 2024 to 13 in 2025.

China reclaimed the top spot for notices, filing 33 in 2025, though Chinese parties also filed only 5 declarations—a gap the report attributes largely to withdrawn-and-refiled cases rather than a surge in unique transactions. Japan led in declarations with 18, reflecting a preference for streamlined review among allied investors. The declaration clearance rate dropped from 78 percent to 66 percent in 2025, meaning more deals require additional scrutiny or conversion to full notices.

Compliance risks have mounted alongside enforcement. Investigation extensions surged eightfold from 2023 levels, and the rate at which parties withdrew and refiled notices climbed to 25 percent in 2025. For semiconductor deals, the path to clearance has become more unpredictable, making early legal review and advance preparation essential for foreign parties considering acquisitions in U.S. chip manufacturing or design.

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