$285 million in federal CHIPS Act funding cancelled for Durham-based Smart USA Institute

A Durham-based project led by Smart USA Institute had a $285 million contract terminated by the federal government, according to a company spokesperson. Smart USA Institute learned on Dec. 10 that it was losing the federal funding, which had been awarded in 2024 as part of the CHIPS Act.

The funding was canceled by the U.S. Department of Commerce. The company said it was told the termination was “for convenience.” WRAL News followed up with Smart USA Institute to ask whether any guidance was provided on what that meant but did not receive a response. The Commerce Department also did not respond to a request for comment.

The project, awarded in January 2025, was focused on challenges in microelectronics and advanced packaging and included plans to explore how artificial intelligence could be used in chip manufacturing through the use of “digital twins,” or virtual models that replicate physical objects such as chips or complex machinery. The effort was set up as a partnership with the Semiconductor Research Corporation Manufacturing Consortium Corporation (SRC).

According to a Smart USA spokesperson, the federal government told the company it had met all performance targets at the time the contract was terminated. Smart USA Institute is now working on next steps and has scheduled a call with member organizations for Wednesday.

What people are saying

In a recent quote, Todd Younkin, Executive Director of Smart USA, said, “federal contracting decisions evolve over time, and 'termination for convenience' is an established mechanism in those agreements and is not a reflection of the significant work we were doing. What's clear is the industry's continued need: the challenges in microelectronics and advanced packaging remain, and SRC's programs provide a durable path forward for collaborative R&D and talent.”