U.S. Shifts Control of CHIPS Act R&D Away From Nonprofit
The U.S. Commerce Department will no longer fund research and progress under the U.S. CHIPS and Science Act through Natcast, the nonprofit established to administer the program. Operational control has been handed to the National Institute of Standards and Technology (NIST).
Natcast was created in 2023 to oversee the National Semiconductor technology Center (NSTC), tasked with advancing semiconductor technology and growing the domestic workforce to strengthen the U.S. supply chain. The nonprofit was contracted to receive US $7.4 billion, distributed through annual payments and milestone achievements. However, Commerce Secretary Howard Lutnick asserts that Natcast doesn’t meet specific legal requirements, deeming the contract – signed shortly before the end of the previous administration – invalid.
Concerns are rising among NSTC proponents that this move could jeopardize long-term U.S. semiconductor leadership. The NSTC aims to ensure lasting gains in semiconductors through continuous innovation, fueled by the CHIPS Act.
Natcast has been developing three key centers: a workforce development and design enablement center in Silicon Valley, an extreme-ultraviolet lithography center in new York, and a prototyping and packaging facility planned for Arizona. These centers are designed to help startups and companies overcome the “lab-to-fab gap” hindering the commercialization of new technologies.
The CHIPS Act mandates that the NSTC operate as a “public-private sector consortium,” not a government agency. The Commerce Department established Natcast to fulfill this requirement,intentionally structuring it to minimize political influence.
in a public letter to natcast CEO, the Commerce Department detailed its decision, citing concerns about the organization’s structure and compliance with federal regulations. The move has sparked debate about the future of the NSTC and the implementation of the CHIPS Act, with some fearing a loss of independence and potential delays in critical semiconductor research and development.
Concerns Rise Over Restructuring of Natcast, U.S. Semiconductor Research Initiative
Recent decisions regarding the National Semiconductor Technology Center (Natcast), a key component of the CHIPS and Science Act, are raising concerns about its future effectiveness and independence.While the structure of Natcast was initially vetted by the Commerce Department as a standard public-private partnership, sources familiar with the situation suggest the current changes undermine its original intent.
A central issue is Natcast’s perceived lack of independence. One source, speaking anonymously, stated that the initial setup was “always designed with a long-term strategy in mind,” but that strategy has been jeopardized by recent actions. This sentiment is echoed by another anonymous source who believes there were individuals from the outset who “viewed [Natcast] as very much a political entity and wanted to undo it.”
The controversy centers, in part, around criticism leveled by Lee Lutnick towards Deirdre Hanford, a former executive at electronic design automation company synopsys, and Natcast staff who transitioned from government service or a commerce Department industrial advisory committee. This committee included prominent figures like IEEE Fellows and other leaders in the chip industry. An expert, also requesting anonymity, expressed concern that targeting individuals who choose public service in the semiconductor field could discourage future participation, effectively “punishing patriotic behavior.”
The restructuring is seen as potentially detrimental to the U.S.chip industry’s competitiveness. The expert warned that delaying semiconductor research and development through attacks on Natcast is counterproductive, stating, “We are in a race, and these delays make it all the more urgent.”
Despite these concerns, sources believe the Commerce department will ultimately allocate the CHIPS Act funding for semiconductor research and development. There is confidence in the National Institute of Standards and Technology’s (NIST) ability to administer the funds. Mark Granahan, CEO of Ideal Semiconductor, expressed optimism, stating that if the administration maintains the goal of semiconductor leadership, “NIST and other existing infrastructure is capable of handling things.” https://idealsemi.com/
Though,other experts remain skeptical that NIST can replicate Natcast’s original vision. One source reiterated that “What was set up… was always designed with a long-term strategy in mind. I don’t think they’ll get that back…. I think all of that has gone away with this decision.”