The U.S. Department of Commerce has invalidated an agreement worth approximately 7.4 billion dollars that had previously awarded operational responsibility of the National Semiconductor Technology Center to the private nonprofit National Center for the Advancement of Semiconductor Technology or Natcast. Officials described the arrangement as unlawful and cited serious violations of accountability standards and statutory restrictions.
Commerce Secretary Howard Lutnick stated that Natcast had functioned as a semiconductor slush fund that served the interests of Biden loyalists. He claimed that the organization primarily benefited political allies while bypassing federal oversight, raising concerns regarding misuse of public resources and potential undermining of statutory governance.
Natcast had been tasked with managing the National Semiconductor Technology Center or NSTC. It was established under the Creating Helpful Incentives to Produce Semiconductors or CHIPS and Science Act of 2022 and was designed to coordinate advanced semiconductor research, industry collaboration, and academic partnerships across the U.S.
The CHIPS and Science Act allocated about 52.7 billion dollars in federal support for domestic semiconductor production and research. Within this amount, significant funding was intended to support research and development through programs like the NSTC, which was expected to anchor American competitiveness in global semiconductor advancement.
It is worth mentioning that Natcast had launched high-profile projects under the NSTC banner prior to the Commerce Department decision. These include the Albany EUV Accelerator was opened in New York with substantial federal backing. Another research facility was planned in Tempe, Arizona, with operations expected to commence in 2028.
Issues emerged concerning the legality of the Biden-era agreement. Critics argued that establishing Natcast as the operational arm of the NSTC contravened the Government Corporation Control Act, which restricts federal agencies from creating external corporate entities without authorization from the U.S. Congress, thereby undermining oversight mechanisms.
The Department of Commerce asserted that the prior arrangement reduced transparency, tied future administrations, and diminished federal control over billions in taxpayer resources. As a corrective measure, the department announced that the National Institute of Standards and Technology will assume direct operational responsibility for the NSTC.
Nevertheless, although federal officials declared the agreement void, the exact amount of money already spent under the Natcast arrangement remains uncertain. Neither Commerce Department officials nor Natcast representatives immediately confirmed how much of the seven point four billion dollars had been disbursed or contractually committed.
The decision has raised implications for ongoing projects. Both nonprofit and private institutions engaged with NSTC initiatives are awaiting guidance on the continuity of programs. Stability of initiatives like the Albany EUV Accelerator now hinges on how the Commerce Department and National Institute of Standards and Technology will manage the transition.