The head of a U.S. CHIPS and Science Act-funded center devoted to digital twins for chip manufacturing has informed its 121 members that the U.S. Department of Commerce will terminate its US $285-million five-year contract.
According to its website, the SMART USA Institute has the goal of uniting academic and industrial labs to create “virtual manufacturing replicas” that reduce development and manufacturing costs by more than 35 percent, cut manufacturing development time by 30 percent, and improve manufacturing yields by 40 percent. It also aimed to train 110,000 workers over five years. This is the second CHIPS Act related institution to be defunded by the federal government since the second Trump administration began in January 2025.
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SMART stands for “semiconductor manufacturing and advanced research with twins”, and the organization began life when it won a government contract in January 2025. It has a complicated structure. The organization is headquartered in Raleigh, N.C., and it is part of a network of federally-sponsored manufacturing innovation institutes called Manufacturing USA, which predates the CHIPS Act. SMART is a public-private partnership operated by SRC Manufacturing Consortium Corporation, which is a wholly owned subsidiary of the Semiconductor Research Corporation (SRC). Established in 1982, and backed by the semiconductor industry, SRC funds R&D at universities and has sponsored more than 15,000 students.
According to an email dated 12 December, sent to SMART USA participants, and obtained by IEEE Spectrum, Commerce notified the organization of the termination on 10 December. The funds were withdrawn “for convenience,” an option that allows the government to unilaterally withdraw from an agreement that is written into many federal contracts, the email states. Requests for comment from the Commerce Department were not returned by press time.
“Although DOC acknowledged that we built an effective organization and met all performance targets, the administration has chosen not to support R&D and workforce development in this direction,” Todd Younkin, SMART USA’s executive director and the CEO of SRC, wrote in the email.
What Comes Next?
Details of what happens next are still coming, but Younkin wrote that the organization would hold a Q&A webinar on Wednesday 17 December to answer member questions.
“While this is a setback, it doesn’t diminish the importance of the work or the strength of our shared commitment to advancing leadership in microelectronics and advanced packaging,” he wrote in the email. He added that SRC will continue to fund research through its other programs.
In response to IEEE Spectrum’s questions, Younkin’s office confirmed that the email was genuine.
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