Today, Secretary Howard Lutnick announced that effective immediately, the National Institute of Standards and Technology (NIST) will assume operational responsibility for the National Semiconductor Technology Center (NSTC) from the National Center for the Advancement of Semiconductor Technology Center (Natcast).
NSTC’s operations will be reformed to align with statutory requirements and increase transparency. The Commerce Department determined that the Biden Administration illegally created Natcast, and therefore the agreement it made in the Administration’s final week granting the organization up to $7.4 billion in taxpayer money is invalid. Thus, the Commerce Department will not abide by its terms.
Natcast is a private, non-profit corporation that Biden-era Commerce Department officials set up to operate the NSTC after the CHIPS and Science Act was signed into law in August of 2022. The CHIPS Act required the Commerce Department to establish the NSTC to conduct research and prototype advanced semiconductor technology, grow the domestic workforce, and strengthen the economic competitiveness and security of the domestic supply chain.
Rather than establishing the NSTC at the Department, however, Biden Administration officials stood up an entirely new, unaccountable entity—Natcast—to operate the NSTC’s public private-sector consortium on the Commerce Department’s behalf using taxpayer funds. 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 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”).
The Biden Administration then stacked Natcast with former Biden officials. The majority of Natcast’s executives, and a few of its trustees, previously held formal positions either within the Commerce Department itself or as members of the Industrial Advisory Committee, which advised the Commerce Department on CHIPS Act implementation. Documents show the Biden Administration even went so far as to provide Natcast’s trustees with detailed legal and corporate guidance that included recommended bylaws and the state of incorporation—which were readily adopted and implemented. In taking these actions to establish Natcast, the Biden Administration officials violated the Government Corporation Control Act—which forbids the government from establishing an entity to act on behalf of an agency, unless a specific provision of law permits it to do so.
On January 16, 2025—just days before President Trump’s inauguration—the Biden Administration executed an agreement to establish Natcast as the NSTC’s operator for the next decade and provided Natcast up to $7.4 billion in federal funding, accounting for virtually all of Natcast’s funding.
In an attempt to protect Natcast from any real 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 purporting to allow termination only in narrow circumstances. Because the Biden Administration officials violated the law in establishing Natcast, this 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,” said U.S. Secretary of Commerce Howard Lutnick. “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.
Letter to Natcast CEO
Bureaus and Offices
National Institute of Standards and Technology
Tags
CHIPS and Science Act