Federal Government Cancels $285M Contract with Durham CHIPS Manufacturing Institute
The federal government has officially canceled a $285 million contract with the Durham-based Smart USA Institute. The termination was communicated to the company on December 10, with officials citing “termination for convenience” as the reason.
Details of the Contract Cancellation
The contract, which was awarded in 2024 under the CHIPS Act, aimed to enhance domestic semiconductor chip production. The CHIPS Act was implemented in 2022 to strengthen the U.S. semiconductor industry amid global shortages.
- Amount: $285 million
- Date of Cancellation: December 10
- Legislation: CHIPS Act (passed in 2022)
The Commerce Department, responsible for the funding, has not yet responded to inquiries regarding the decision. Todd Younkin, Executive Director of Smart USA, emphasized that such terminations are standard in federal contracts and do not reflect the company’s performance. He stated, “Federal contracting decisions evolve over time.”
Implications for Smart USA
Despite the loss of funding, Smart USA asserts that the need for innovation in microelectronics and advanced packaging continues. The company had planned to incorporate artificial intelligence into chip manufacturing processes, employing digital twins—virtual models that simulate physical objects.
Additionally, their project was in collaboration with the Semiconductor Research Corporation (SRC) Manufacturing Consortium. According to a spokesperson for Smart USA, the federal government acknowledged that the company had met all performance targets prior to contract termination.
Next Steps for Smart USA
In light of this setback, Smart USA is currently strategizing its next steps. The organization has scheduled a call with member organizations to discuss future plans moving forward.
