Federal government terminates $285 million contract for Durham-based CHIPS manufacturing institute :: WRAL.com

A Durham-based project had a $285 million contract terminated by the federal government, according to a spokesperson. 

Smart USA Institute learned it was losing the federal funding on Dec. 10. The company said it was told the decision was “for convenience.” WRAL News followed up with the company to ask if it received any guidance on what that meant but did not hear back. The Commerce Department, which canceled the funding, did not respond to our request for comment. 

“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,” Todd Younkin, Executive Director of Smart USA, said in a statement. “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. 

Smart USA received the funding in 2024 as part of the CHIPS Act. The law was passed in 2022 with hopes of boosting domestic semiconductor chip production. 

Part of the company’s plans included how artificial intelligence could factor into chip manufacturing. It planned to use what’re known as ‘digital twins’ – virtual models that replicate physical objects, like chips or complex machinery.   

The project was set to be a partnership with the Semiconductor Research Corporation Manufacturing Consortium Corporation (SRC). 

A spokesperson for Smart USA told WRAL that the federal government told the company it had met all performance targets when its contract was terminated. 

SMART USA is working on next steps after losing the funding. It has a company call with member organizations scheduled for Wednesday.