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State asked to provide $25 million to NatCast design facility as part of CHIPS-related semiconductor effort
Summary
GO-Biz requested up to $25 million to reimburse NatCast for capital costs to build a semiconductor design and collaboration facility in Sunnyvale tied to the federally funded National Semiconductor Technology Center.
GO-Biz asked the Assembly Budget Subcommittee No. 5 to approve a proposal to provide up to $25 million to NatCast, the nonprofit operator of the National Semiconductor Technology Center (NSTC), to reimburse capital costs for a design and collaboration facility planned for Sunnyvale.
"The proposal before you is in support of the semiconductor and microelectronics sector... it includes $25,000,000 for Natcast... to build out the design and collaboration facility... located in Sunnyvale," Derek Kirk of GO-Biz told the committee.
Proponents said federal CHIPS and Science Act funding underpins the NSTC's work. Vivek Prasad, vice president of design enablement at NatCast, told the committee NatCast has a signed award agreement under the CHIPS Act providing roughly $6.3 billion to support the National Semiconductor Technology Center and selected three facilities; he said the Sunnyvale site was chosen in part because of California's workforce and ecosystem.
"This center will actually spend over $2,000,000,000 in the Bay Area in California," Prasad said, calling the state's $25 million request a "tip of the spear" that could leverage much larger private and federal investment. Private and university supporters, including representatives from Stanford, offered testimony in support of the request.
The Legislative Analyst's Office (LAO) expressed concerns about the state's exposure to uncertain federal funding and recommended rejecting the proposal given California's wider budget pressures. "We do have three significant concerns... we do recommend rejecting the proposal," Seth Kerstein of the LAO told the committee, noting federal dependency and the state's limited discretionary budget.
GO-Biz officials said NatCast has received CHIPS Act funding from the Department of Commerce and that the state's $25 million would be provided on a reimbursement basis after NatCast incurred capital costs, with accountability and contract terms to be included.
Why it matters: The committee was being asked to consider a small direct state reimbursement that proponents said could anchor a facility expected to draw federal, private and institutional investment for semiconductor design and R&D. LAO questions focused on federal funding continuity and whether the state should prioritize this investment amid fiscal constraints.
What's next: GO-Biz said it would continue coordinating with the Department of Commerce, NatCast and the UC system on siting and contractual guardrails should the Legislature approve the reimbursement authority.
