Criticism and Withdrawal of Support for Biden-Established Fund Management Organization
Subsidy Recipients to Be Selected "From Scratch"
According to a report by the U.S. political media outlet Politico on September 30 (local time), the Donald Trump administration is effectively dismantling the core semiconductor technology support plan that began under the previous Joe Biden administration.
According to Politico, the Biden administration established a nonprofit organization called Natcast to operate the National Semiconductor Technology Center, which was intended to lead semiconductor research and development (R&D). Natcast, whose membership includes more than 200 companies such as Nvidia, Intel, and Samsung Electronics, managed a fund of $7.4 billion and has promoted R&D facilities and workforce development projects to support the industry.
However, the situation changed dramatically with the launch of the second Trump administration. Secretary of Commerce Howard Lutnick criticized Natcast as a "semiconductor slush fund that lined the pockets of Biden loyalists," withdrawing support for the organization and moving to reclaim its funds. Secretary Lutnick cited a new legal interpretation from the Department of Justice, claiming that Natcast lacked a proper legal foundation and was established illegally. He declared that the federal government would retain control over the funds.
As a result, not only are the support programs Natcast had been promoting now at risk of being suspended, but the very existence of Natcast itself has become precarious. Over 90% of its staff-out of more than 110 employees-have been notified of termination, and the disbursement of billions of dollars in promised support to states such as Arizona has also become uncertain.
With the Department of Commerce announcing that it will restart the selection process for semiconductor subsidy recipients from scratch, the industry has been plunged into uncertainty. Major companies such as Intel, IBM, and AMD have been individually contacting Commerce Department officials to explore ways to secure support for their projects following Secretary Lutnick's decision. Moreover, most companies have refrained from publicly voicing opposition out of concern that they might face disadvantages in future subsidy reviews. An industry insider told Politico, "No company wants to become a target of the administration," expressing concern.
Some observers have pointed out that the Trump administration may seek to allocate these funds in ways that benefit specific regions or political support bases. With many of President Trump's close associates now serving on the fund management committee, concerns have also been raised about a lack of transparency and potential conflicts of interest.
The Trump administration has stated its intention to scrap the existing plan and directly control semiconductor subsidies through a new program, seeking to renegotiate under "better terms." There are also concerns that this process could involve excessive intervention, such as demands for equity stakes in companies. Politico reported that global semiconductor companies are facing dramatic changes as the U.S. government steps up its involvement.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
