Natcast to Lay Off Majority of Its Staff

Natcast, the non-profit organization created to run the U.S. CHIPS & Science Act's National Semiconductor Technology Center (NSTC) told the majority of its staff they would be laid off this week, IEEE Spectrum has learned. A small core team will continue on to shut Natcast down over the next few weeks, a person familiar with the matter said.

The organization was founded in 2023 to run NSTC, which the law established to conduct research and prototyping of advanced semiconductor technology and grow the domestic semiconductor workforce to strengthen the economic competitiveness and security of the domestic supply chain."

However, on 25 August Commerce Secretary Howard Lutnick stated that the department would not deliver the US $7.4 billion in funds under its contract with the government. In an accusatory letter to Natcast CEO Deirdre Hanford and a press release, Lutnick claimed the nonprofit was not created legally, and said that the National Institute of Standards and Technology would be taking over NSTC operations.

The Commerce Department has been suppressing Natcast's operations for many months, IEEE Spectrum has learned. According to multiple sources, the organization's research agenda was completed in April and should have been accepted and processed by Commerce in a matter of weeks. But it never happened. A memo selecting awardees for research into reducing the impact of perfluoroalkyl substances (PFAS) from semiconductor manufacturing was submitted to Commerce but never approved. Three groups won parts of a $30 million grant to transform the design of RF chips using machine learning, but awardees have gotten no word on when or whether the funding will flow.

This is a sad end," said one person who requested anonymity and was involved in early debate about the NSTC.

Lutnick's characterization of Natcast's creation as cronyism is pretty frustrating," this person continued. The idea that NSTC would be operated by an independent public-private partnership, which is written into the law, came from deep consultation with industry and was intended to insulate its work from politics. The organization needed such protection to make good technical decisions, because in selecting who gets funds there are always more losers than winners," this person said.

Over the past week, Natcast has been defending itself and its staff against Lutnick's accusations. On 4 September, in a letter to its 200 members, Hanford countered Lutnick's assertions that the organization was packed with Biden administration cronies and that it was run as a slush fund." Hanford pointed to the multiple layers of government and industry oversight Natcast operates under and the experienced semiconductor industry staff it has brought on. She added that the nonprofit had stuck to its agreements with the government, submitting 119 milestones and deliverables" to Commerce.

What's Lost Without Natcast

On 8 September, Natcast published a detailed overview of what it has done so far. Accomplishments included creating an industry-driven R&D agenda, the development of multiple workforce programs, and the signing on of some 200 members. These members included cutting-edge logic and memory companies (such as Intel, Nvidia, SK Hynix, and TSMC), small companies like Atomera, EnCharge AI, and Polar Semiconductor, and multiple universities and makers of semiconductor tools and equipment.

Members had the right to use facilities and other infrastructure that Natcast was standing up (for a fee) and participate in research. One goal for the infrastructure was to reduce the time from concept to prototype by 30 percent. Access to the tools and processes NSTC would provide is out of reach for even some of the country's top researchers, IEEE Spectrum's source said. Without that access, startups and researchers won't be able to afford to do relevant work using 300-millimeter wafers and advanced chip-technology nodes. Despite the fact that not all of its facilities were complete, Natcast had plans to proceed with research by chaining together existing infrastructure around the country.

In addition, the document from 8 September detailed the expert in-house team at Natcast, and said that expertise allowed it to evaluate R&D awards at twice the rate of federal agencies while requiring considerably less overhead than government, universities, and non-profit research organizations like Imec. (It forecast a 10 percent overhead on expenses over 10 years.)

Natcast was supposed to do what industry couldn't solve by itself," said a source familiar with the situation. Its R&D program was aimed at solving big problems, such as collapsing the time and energy required to move data between memory and computing, in a way that the whole industry could benefit from.