Billions in CHIPS funding have been pulled as the US Commerce Department halts $7.4 billion for Natcast, casting uncertainty over semiconductor research and workforce projects.
The US Department of Commerce has withdrawn up to $7.4 billion in CHIPS and Science Act funding previously allocated to Natcast, the nonprofit established to operate the National Semiconductor Technology Centre (NSTC).
Commerce Secretary Howard Lutnick said the Biden administration acted unlawfully when it set up Natcast as an independent entity, claiming the CHIPS Act does not explicitly authorise the creation of such a corporation.
Control of the NSTC has now been shifted to the National Institute of Standards and Technology, effective immediately.
According to reports, in a letter to Natcast’s leadership, Lutnick argued the arrangement violated the Government Corporation Control Act, which requires specific congressional authorisation for establishing new federal corporations.
He also criticised the organisation’s leadership structure, pointing to the presence of former administration officials.
Natcast, founded in 2023, had been tasked with managing research partnerships, advanced packaging initiatives and workforce development efforts under the CHIPS programme.
Earlier this year, the Biden administration increased its support, allocating more than $6 billion for Natcast activities, alongside an additional $1.1 billion to oversee advanced packaging projects in Arizona.
The nonprofit has drawn on senior expertise from across the semiconductor sector, including former executives from Intel, Synopsys and other leading firms. It has also supported R&D and training initiatives at US universities and opened a flagship CHIPS-funded facility in Albany, New York, which was due to receive an $825 million investment.
With the withdrawal of funds, the future of these projects is now uncertain. The Commerce Department has not clarified whether the money will be redirected or how existing agreements will be handled.
The move marks the latest reversal by Lutnick, who has already pulled back federal support from other Biden-era technology programmes in recent months.
