President Donald Trump has blocked a planned acquisition by U.S. photonics firm HieFo Corp of Emcore’s aerospace and defense semiconductor assets, citing national security and China-related concerns.

Regulatory action was taken, involving the acquisition, in the U.S. business landscape the ruling applies, when the order was issued

The White House order requires HieFo to divest all interests and rights in the assets within 180 days, reflecting heightened scrutiny of foreign influence in sensitive technologies.

The Committee on Foreign Investment in the United States identified risks tied to ownership controlled by a Chinese national, prompting the prohibition.

Industry sources say the move could chill cross-border semiconductor deals valued even at modest transaction sizes.

The decision signals continued U.S. prioritisation of domestic control over critical semiconductor technologies and aligns with broader strategic competition with China over tech leadership.

Observers note that even small deals can attract scrutiny if they involve capabilities seen as strategically significant. The ruling could influence investor sentiment toward future deals in aerospace, defense and dual-use tech sectors.

Market analysts say the action reflects a tougher regulatory stance that may lead to increased compliance costs for companies pursuing international acquisitions or partnerships.

Legal and policy experts insist firms will need more robust risk assessments and engagement with national-security reviews earlier in deal planning.

The decision also underscores how geopolitical concerns increasingly intersect with financial and strategic capital flows, shaping M&A activity.

Cross-border investors may reassess targets, particularly in industries with potential spillover into defense or advanced tech.

For the semiconductor industry, this ruling could amplify discussions about supply chain security, domestic investment incentives and global cooperation frameworks.

Observers expect more policy actions as nations balance economic openness with strategic control.

Source: Reuters.