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Subcommittee reviews $25 million request to site NatCast design facility in Sunnyvale
Summary
GO‑Biz presented a $25 million reimbursement proposal for NatCast to build a design and collaboration facility for the National Semiconductor Technology Center in Sunnyvale; LAO and others raised concerns about federal funding dependence and state budget tradeoffs.
Derek Kirk of GO‑Biz told the subcommittee the governor's budget includes $25,000,000 to reimburse NatCast — the nonprofit operator of the National Semiconductor Technology Center — for capital expenditures for a design and collaboration facility to be located in Sunnyvale.
Kirk said the state would require NatCast to front the capital costs and submit requests for reimbursement up to $25,000,000. He said GO‑Biz has coordinated with the Department of Commerce, UC Office of the President and other partners on site selection and workforce development planning.
Federal funding and risk: The proposal is tied to federal CHIPS funding for the National Semiconductor Technology Center; testimony said roughly $6,300,000,000 was authorized for NatCast in the CHIPS and Science Act and that the award agreement has been signed. LAO analyst Seth Kerstein raised three concerns: the proposal's dependence on federal funds, the state's fiscal condition and whether state general fund support outside core responsibilities is the right priority given budget constraints. He recommended rejecting the proposal on those bases.
Supporters' view: Vivek Prasad, vice president of design enablement at NatCast, said the $25,000,000 would be “the tip of the spear” that would catalyze private and federal investment; he testified the center would drive billions of dollars of local spending and support keeping semiconductor R&D and workforce development in California. A Stanford representative also testified in favor of the state contribution.
Quotes and attribution: “This $25,000,000 I would see as a tip of the spear or the engine of a freight train,” NatCast’s Vivek Prasad said. LAO analyst Seth Kerstein said the subcommittee should weigh federal funding uncertainty and state fiscal priorities before approving new general fund spending for commercial activities.
Ending: The subcommittee heard competing views about strategic benefits versus fiscal risks. The item was presented as a governor's budget proposal; no committee appropriation or final action was recorded in the hearing transcript.
