The Department of Commerce announced it is pulling back billions of dollars in funding for semiconductor research awarded by former President Joe Biden’s administration, which included funding for a $1.1 billion facility at Arizona State University.
In 2023, Biden’s Department of Commerce announced it would be partnering with a new nonprofit to operate the National Semiconductor Technology Center, or NSTC. That nonprofit, now known as Natcast, later received billions of dollars in funding from the bipartisan CHIPS and Science Act to help build up the country’s domestic semiconductor manufacturing industry.
Earlier this week, the Trump administration announced it was taking back that funding, claiming its predecessor illegally propped up Natcast in violation of a federal law prohibiting agencies from establishing corporations without congressional authorization.
“By taking actions such as those described above, the Department under the Biden administration established Natcast to act as an agency in operating the NSTC,” according to a letter Commerce Secretary Howard Lutnick sent to Natcast CEO Deirdre Hanford earlier this year.
The CHIPS Act did require the Department of Commerce to create a National Semiconductor Technology Center that would function as a “public-private consortium.” Lawmakers involved in crafting the legislation said that would ensure that scientists, not just politicians, were involved in allocating the money.
However, Lutnick argued the creation of Natcast went beyond what was mandated by Congress in the CHIPS Act and that the Biden administration staffed the organization with political allies.
“The Department under the Biden administration had no specific legal authorization to establish Natcast as it did — the CHIPS Act does not contain a provision specifically permitting the creation of a corporation to serve as the operator of the NSTC,” Lutnick alleged in the letter.
An independent committee selected the first Board of Supervisors for Natcast, then known as SemiUS, according to a press release from the National Semiconductor Technology Center, a division of the Department of Commerce.
Lutnick claimed the Biden administration handpicked the members of that committee, including former Biden advisor Jason Matheny, and called it a “slush fund” meant to enrich political allies.
Natcast did not respond to a request for comment.
In a press release, the Department of Commerce said its National Semiconductor Technology Center is taking over “operational responsibility” for the NSTC and is cancelling the agreement to send the nonprofit $7.4 billion in funding that was signed in January shortly before Trump took office.
“Because the Biden administration officials violated the law in establishing Natcast, this purported agreement is void and none of its terms are enforceable,” according to the release.
Arizona impact
In January, Natcast and the Department of Commerce announced it had selected the ASU Research Park as the home for a new NSTC Prototyping and National Advanced Packaging Manufacturing Program (NAPMP) Advanced Packaging Piloting Facility.
The facility would be built using $1.1 billion the department awarded to Natcast, according to the NIST.
At the time, ASU President Michael Crow called it the “greatest national laboratory investments since those that came out of the Manhattan Project.”
Crow said the ASU project was the largest of three CHIPS Act research projects backed by Natcast.
And Arizona’s Democratic Congressional delegation praised the announcement, saying it will contribute to the domestic development of technology needed in new fields like AI and quantum computing.
“This groundbreaking effort will mean that researchers and startups won’t need to go to China or Europe to test out their cutting-edge prototype microchips — they'll be able to do that right here in America,” Sen. Mark Kelly said in a press release announcing the facility.
The facility was slated to open in 2028. But its future is now uncertain following the Department of Commerce’s decision to claw back the money.
The Department of Commerce did not respond to questions asking about how the announcement will affect the ASU-based facility.
ASU officials “have not had the opportunity to assess the impact yet,” a university spokesman said.
Arizona’s Congressional delegation is similarly in the dark about the impact of the Department of Commerce’s decision.
“We need answers from the Trump administration on how this announcement will affect the research and development facility at ASU, an investment widely supported by Arizona’s leaders – both Democrats and Republicans,” Kelly said in a statement to KJZZ News. “We must ensure that the research for the next generation of microchips happens in America, and there’s no better place to make the best microchips in the world than Arizona.”
Arizona Attorney General Kris Mayes said the funding question is also on her radar.
“It is certainly something that we will be looking at in terms of whether it's illegal and unconstitutional, just like many of the other 25 lawsuits that we have filed,” Mayes said, referring to other litigation her office has joined against the Trump administration, many of which focused on the administration’s attempts to claw back funding already approved by Congress.
-
The federal government is providing $3 million to support a new mineral processing plant at the University of Arizona. The facility will be connected to an underground mine near the town of Sahuarita. -
A pair of education groups are proposing a ballot initiative to rein in Arizona's universal school voucher program — which has ballooned to a nearly billion-dollar-a-year expense since first approved in 2022. -
Women from eight universities are scheduled to compete in a flag football tournament held in metro Phoenix in April. -
The Phoenix Union High School District Governing Board is planning to discuss censuring one of its members at next month’s meeting. This come after community calls for his resignation. -
A Mesa teacher’s aide who was arrested over inappropriate texts with a student worked with special needs students, the prosecutor says. Dominic Sette was arrested by Mesa police on Tuesday.
