The President’s Council of Advisors on Science and Technology (PCAST) is recommending the National Semiconductor Technology Center (NSTC) create a $500 million investment fund for semiconductor startups, according to its September report.

PCAST wants the NSTC – which was established through the CHIPS and Science Act – to set up the fund by the end of 2023, in order to provide financial support and in-kind access to semiconductor prototyping facilities and tools.

“I am excited that PCAST is issuing this report to help ensure that the efforts funded by the CHIPS and Science Act accelerate strengthening the semiconductor workforce and drive innovation through R&D,” Maria Zuber, PCAST co-chair, said in a statement. “Our recommendations can help make this happen not just for a few years, but for decades to come.”

The September report builds on PCAST’s recommendations sent to President Biden in a letter last month to make the most of the $11 billion appropriated for semiconductor research and development (R&D) through the CHIPS and Science Act. The letter hinted at the establishment of a semiconductor startup fund, but the most recent report lays out the specifics.

“An investment fund will offset the high capital requirements for semiconductor startups and the long time it takes them to reach positive cash flow,” the report says. “This will level the playing field, making these investments more attractive and hence facilitating the creation of more semiconductor startups and supporting and accelerating innovation in the semiconductor ecosystem.”

PCAST explained the fund will have the highest impact on early-stage companies in pre-seed and seed rounds, “which are typically the highest risk.” However, the report says NSTC should give attention to qualified startups as well, “with reduced or zero cost access to prototyping and tools.”

“Investing in research and development is crucial to strengthening long-term U.S. semiconductor competitiveness,” said Lisa Su, PCAST member. “The $11 billion from the CHIPS and Science Act dedicated to R&D is a once-in-a-generation opportunity to fill the pipeline with new breakthroughs in semiconductor innovation and train the next generation of semiconductor innovators.”

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Grace Dille
Grace Dille
Grace Dille is MeriTalk's Assistant Managing Editor covering the intersection of government and technology.