us chips act faces setback as natcast halts operations

2025-09-12 general

Washington, Friday, 12 September 2025.
The US CHIPS and Science Act is facing challenges. Natcast, the non-profit managing the National Semiconductor Technology Center, has laid off most of its staff. This action stops the development of advanced chipmaking technology. Commerce Secretary Howard Lutnick stated the department would not deliver US $7.4 billion in funds. Concerns are rising about the effectiveness of the CHIPS Act. The act aims to foster domestic semiconductor innovation. Companies like Nvidia, TSMC, and ASML could see effects. The shutdown raises questions about cronyism and the future of US semiconductor leadership.

investor concerns rise amid natcast shutdown

The abrupt halt of Natcast’s operations has triggered unease among investors [1]. Natcast was created in 2023 to manage the National Semiconductor Technology Center (NSTC) [1]. The organization aimed to accelerate semiconductor technology development [1]. Its goal was to reduce the time from concept to prototype by 30 percent [1]. The layoffs and funding halt jeopardize these objectives [1]. This disruption could negatively impact the stock valuations of companies relying on advanced chip technology [alert! ‘stock values are forward looking and depend on many factors’] [1].

political and financial fallout

Commerce Secretary Howard Lutnick’s decision to withhold US $7.4 billion in funds from Natcast intensified the turmoil [1]. Lutnick alleged the non-profit was not legally created [1]. He characterized Natcast as a ‘semiconductor slush fund’ filled with ‘Biden loyalists’ [1]. Deirdre Hanford, Natcast CEO, refuted these claims in a letter to its 200 members [1]. The political battle adds uncertainty to the future of the CHIPS Act [1]. Investors should monitor these developments for potential market instability [alert! ‘political events can influence market sentiment’] [1].

impact on semiconductor companies

Natcast had secured 200 members, including industry giants like Intel, Nvidia, SK Hynix, and TSMC [1]. The organization aimed to address industry-wide challenges that individual companies couldn’t solve alone [1]. The shutdown of Natcast could slow down innovation for these firms [1]. Nvidia and AMD may face increased scrutiny regarding AI chip exports to China [5]. The US government now requires these companies to surrender 15% of their China sales revenue [5]. These factors could affect the companies’ financial performance [alert! ‘financial performance depends on many factors’] [5].

nist assumes control, future uncertain

The National Institute of Standards and Technology (NIST) will now take over NSTC operations [1]. NIST’s ability to replicate Natcast’s intended functions remains unclear [1]. Natcast claimed its in-house team could evaluate R&D awards at twice the rate of federal agencies [1]. The transition to NIST raises concerns about potential delays and reduced efficiency [1]. Investors should assess NIST’s track record and future plans for the NSTC [1]. Monitoring these developments will be crucial for informed investment decisions [alert! ‘investment decisions should be based on complete information’] [1].

market reactions and expert opinions

Reactions to Natcast’s shutdown have been largely negative [1]. One person involved in early debates about the NSTC called it ‘a sad end’ [1]. A source familiar with the situation stated that ‘Natcast was supposed to do what industry couldn’t solve by itself’ [1]. The loss of Natcast could be a setback for US semiconductor competitiveness [1]. Investors should consider these expert opinions when evaluating the long-term prospects of semiconductor investments [alert! ‘expert opinions are subjective’] [1].

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chips act semiconductor r&d