U.S. gov't seizes $7.4 billion semiconductor research fund created under Biden admin, calling it 'illegal' — Lutnick says fund 'served as a semiconductor slush fund that did nothing but line the pockets of Biden loyalists with American tax dollars'

The U.S. Commerce Department has seized control of a $7.4 billion semiconductor research fund from the National Center for the Advancement of Semiconductor Technology (NATCAST), a private non-profit set up during the Biden administration, as per Reuters. Describing it as a "slushfund," for ex-Biden admin officials, the Commerce Department promised greater oversight and accountability for where the funds are being spent, but didn't provide any further detail.

One of the defining investments of the Biden administration was the CHIPS Act, which authorized close to $300 billion in investments to encourage the design, development, and manufacturing of cutting-edge semiconductors in the United States. The creation of NATCAST was a part of that, with $11 billion allocated for it to establish a range of research centers around chip design.

The Trump administration's Commerce Department wants to bring this non-profit under its umbrella of control, though, and has announced it will be taking over a large portion of the organization's funds moving forward.

“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 statement. He's recently heralded a serious change in the way the U.S. handles its technology investments and grants.

The Commerce Department statement also described NATCAST as an "effort to skirt clear legal restrictions prohibiting government agencies from establishing corporations," and that it was full of "former Biden officials," making some generalized allusions to nepotism and corruption.

NATCAST hasn't released a public statement about these cuts, but last week did highlight how it was aligned with the priorities of the White House and tried to make clear how important its role was in making the US competitive in the cutting-edge chip industry.

In July, NATCAST celebrated the creation of its new CHIPS for America Extreme Ultraviolet (EUV) Accelerator facility within the NY Creates Albany NanoTech Complex. Designed to accelerate the U.S.'s fabrication of the latest EUV semiconductors, it gives visitors full access to ASML's latest EUV chip design tools. It was also hoped to attract the top talent in semiconductor design and manufacturing, but now the future of the center and any other NATCAST efforts remains uncertain.

In January, NATCAST and the then-Biden administration announced plans to build a further research and development facility in Tempe, Arizona. It was set to open sometime in 2028, but that seems increasingly unlikely to come to pass without appropriate funding.

The Commerce Department hasn't said what it plans to use the billions in funding it now has control over.

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