CHIPS Act R&D Stalls as Manufacturing Surges Ahead

On 6 August, the U.S. Government Accountability Office (GAO) released a report on the state of the 2022 CHIPS and Science Act, a bipartisan federal law passed under the Biden Administration to boost U.S. semiconductor manufacturing and R&D. While manufacturing projects funded by the act are making notable progress, the money earmarked for R&D remains mostly unused, and the Department of Commerce, which administers the funds, has not published a plan for meeting the requirements of the law, according to the report. GAO says this lapse could put the U.S. at risk of missing out on the opportunity to advance semiconductor tech.

The industry experts we spoke with agree with GAO’s assessment. That includes Donna Dubinsky, serial entrepreneur and former Commerce Department official.

“We need to be the leader in manufacturing as well as in research, both advanced manufacturing technology and advanced designs, and Congress apportioned money to do it,” she says. Dubinsky was a trustee of Natcast, the public-private research consortium tasked with administering the National Semiconductor Technology Center (NSTC), the CHIPS Act’s R&D component, until August 2025 when Commerce cancelled its $7.4-billion contract in favor of operating NSTC itself.

The April 2026 charter Commerce wrote for the NSTC “does not mention the strategy or contain sufficient detail to demonstrate plans for the NSTC to align with” the National Strategy on Microelectronics Research, a requirement of the CHIPS Act, GAO wrote. Commerce has also failed to involve the private sector in establishing its investment fund, another requirement of the Act. Commerce did not respond to a request for an update on its plans for meeting the national strategy and other CHIPS Act R&D requirements.

Instead of carrying out the original goals of the CHIPS Act, Dubinsky says, “we are choosing to not invest in future semiconductor technology leadership in the U.S, and I don’t understand that choice…Now it’s going to be in Belgium. It’s going to be in Tokyo. It’s going to be in Korea. It’s not going to be in the U.S.”

What is working in the United States, according to the GAO report, is the disbursement of manufacturing incentives.

CHIPS manufacturing incentives are working

The GAO report shows that CHIPS Act-funded manufacturing programs are progressing. As of April 2026, 24 out of the 144 milestones across 49 projects had been completed, and the funding associated with them had been disbursed. Since April, Commerce has announced seven additional projects (five for USA Rare Earth, one each for Bosch and Powerex).

GlobalWafers, a Taiwan-headquartered silicon wafer company, is building wafer production facilities in Texas and Missouri with CHIPS Act direct grant support. They have had no problems receiving their milestone-based incentives so far, says Brent Omdahl, senior vice president of government affairs. They completed phase one of their Texas facility last year, receiving the promised $200 million shortly afterward.

“Obviously everybody in industry got perhaps a little anxious when President Trump, at the beginning of the administration, said he didn’t like the direct grant program,” Omdahl says. But he says he hasn’t heard of the government coming back to awardees to ask for equity positions, something industry watchers were concerned about. If anything, the Trump Administration’s changes to the CHIPS direct grant program have made the company’s work run more smoothly, he says.

According to the GAO report, a majority of CHIPS Act manufacturing projects will be complete by 2028, with all expected to finish by 2033.

R&D is floundering

The GAO reports that the Department of Commerce has disbursed only about $506.8 million of $11 billion appropriated for R&D. Commerce has also made new awards totaling $900 million outside the original CHIPS Act R&D framework.Source: U.S. Government Accountability Office

Since the arrival of the new administration, Commerce has cancelled $7.8 billion of the $11 billion appropriated for R&D under the CHIPS Act. Most of that was intended to go to Natcast to operate NSTC.

Commerce has funded two components of the R&D arm of the CHIPS Act, GAO reports: about $347 million for metrology research conducted by the National Institute of Standards and Technology and less than $5 million on the Act’s Small Business Innovation Research component.

Outside the cancelled NSTC framework, Commerce has since awarded $900 million to xLight, Sandbox AQ, and I-Pulse, and promised an additional $2 billion in preliminary awards for quantum computing it intends to take from CHIPS Act R&D funds, the GAO reports.

Unlike awards under the NSTC framework, these awards required equity from the companies in exchange for the government funds. “They’re using these funds for investment in equity, when these are companies that have access to the capital markets,” Dubinsky says, “If private capital is serving a sector well, then there’s no need for the government to play a role. The whole idea of this program was to provide leverage that would enable substantially more private sector investment.”

VJ Sahi, a partner and vice president at government funding consultancy Clark Street Associates, notes that “there were no significant developmental awards in flight” within the NSTC, so its cancellation may not have harmed valuable research or development so much as delayed it. “The trade-off has been a delay…but it has also provided more available capital [which is positive] if they can now move to deploy those R&D dollars on a reasonable schedule.”