A fundamental shift in the handling of semiconductor research funding is underway as the Biden administration’s attempt to create the National Center for the Advancement of Semiconductor Technology Center, or Natcast, comes to an abrupt end. On Monday, Commerce Secretary Howard Lutnick announced that the National Institute of Standards and Technology will take over operations for the National Semiconductor Technology Center.
This change arises from concerns surrounding how Natcast was formed. Lutnick criticized the setup as a means to secure soft landings for Biden administration loyalists. “From the very beginning, Natcast served as a semiconductor slush fund that did nothing but line the pockets of Biden loyalists with American tax dollars,” he stated.
The CHIPS Act aimed to allocate $11 billion for semiconductor research through the Commerce Department’s National Semiconductor Research and Technology Center. However, there was no authorization for creating an outside entity like Natcast, which Lutnick identified as a misstep by the administration. He highlighted that it “flouted federal law” by sidestepping legal stipulations against government agencies forming corporations.
The internal politics surrounding Natcast did not go unnoticed. According to Lutnick, the Biden administration carefully selected individuals for its “Selection Committee,” leading to a group that largely consisted of figures with ties to the administration. This included Jason Matheny, who held multiple roles in the White House, and Don Rosenberg, a venture capital partner whose firms benefited from substantial government grants. Lutnick asserted that this strategy was a blatant attempt to bypass clear legal restrictions.
Further complicating matters, Lutnick’s release noted how officials staffed Natcast with former administration members. Many executives had prior roles within the Commerce Department or its advisory committees related to the implementation of the CHIPS Act. This created a conflict of interest, according to Lutnick’s assessment, as they were also instrumental in navigating Natcast through the incorporation process. “Instead of operating within the Department, officials devoted significant resources to creating an unaccountable entity to manage taxpayer funds,” he criticized.
Events took a particularly dicey turn when, just days before the presidential inauguration of Donald Trump, Natcast was reported to have secured an agreement that undermined government oversight. According to Lutnick, this desperate maneuver, executed on January 16, 2025, represented an attempt to absolve Natcast of democratic accountability. The agreement handed over $7.4 billion in advanced funding while restricting the government’s ability to terminate funding at its discretion—a common practice in federal contracts.
Lutnick argued that the actions taken by the Biden administration to shield Natcast from scrutiny reflect a serious violation of the legal framework meant to govern such entities. He expressed concern that these measures threaten both fiscal accountability and effective leadership in the semiconductor industry.
The dissolution of Natcast and the shift back to direct Commerce Department control signals a potential return to more traditional governance, aimed at ensuring that taxpayer dollars are utilized effectively. Lutnick concluded by stating that “Ending this illegal relationship will ensure efficient use of taxpayer funds and continued American leadership in the semiconductor industry.” By centralizing responsibility within the Commerce Department, the aim is to restore the authority originally intended by Congress when the CHIPS Act was enacted.
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