The Commerce Department said Monday it will take control of $7.4 billion in semiconductor research funds, saying that the private nonprofit established under the Biden administration “served as a semiconductor slush fund.”
The National Institute of Standards and Technology is set to assume oversight of the National Semiconductor Technology Center, a public-private consortium created under the CHIPS and Science Act of 2022, which was signed by Joe Biden.
The act authorized the Commerce Department to establish the NSTC, with the National Center for the Advancement of Semiconductor Technology, a nonprofit, designated in 2023 to operate it.
The NSTC was created to conduct research and prototype advanced semiconductor technology, grow the domestic workforce, and strengthen the economic competitiveness and security of the U.S. supply chain, the Commerce Department said in a news release.
“However, Biden administration officials stood up an entirely new, unaccountable entity — Natcast [the National Center for the Advancement of Semiconductor Technology] — to operate the NSTC’s public private-sector consortium on the Commerce Department’s behalf using taxpayer funds,” the department said. “In an effort to skirt clear legal restrictions prohibiting government agencies from establishing corporations, the Biden-era Commerce Department officials handpicked individuals friendly to the Biden administration to serve on a ‘Selection Committee’ that, in turn, chose who would form the entity that the Department anticipated would serve as the operator of the NSTC.”
The Commerce Department said the selection committee included Jason Matheny (who held several roles in the Biden White House), Don Rosenberg (a partner at a venture capital firm whose portfolio companies received at least $117 million in federal grants), and Brenda Wilkerson (a self-described advocate for “social justice for underrepresented communities in technology”).
On Jan. 16, just four days before President Donald Trump’s inauguration, the Biden administration established Natcast as the NSTC’s operator for the next decade and provided Natcast with up to $7.4 billion in federal funding, accounting for virtually all of Natcast’s budget, the Commerce Department said.
To protect Natcast from any oversight or accountability and tie the hands of future administrations, Biden administration officials removed the “termination for convenience” clause, a standard term in government contracts, instead allowing termination only in narrow circumstances, the department said. Because the Biden administration violated the law in establishing Natcast, the department said the purported agreement is void and none of its terms are enforceable.
“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,” Commerce Secretary Howard Lutnick said in the news release. “The Biden administration had no authority to manipulate legislation in a way that would allow them to establish, staff, and govern a corporation to act as a government agency.
“Ending this illegal relationship between Natcast and the NSTC will ensure that the Commerce Department keeps control of taxpayer funds and delivers investments and benefits for all Americans.”
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