Chip Making Pioneer GCA Corp. Closes Factory : Technology: $60 million in government funds has failed to restore Massachusetts firm to financial health.

GCA Corp., a vendor of critical computer chip making equipment, closed down its Massachusetts factory Friday even as last-ditch efforts to save the company continued.

GCA was a pioneer in the vital chip making technology known as photolithography, but ran into problems in the mid-1980s and lost the market to Japanese competitors Nikon and Canon.

The company has received at least $60 million in funds from the government-backed Sematech consortium over the last five years and has succeeded in regaining technical leadership. But that has not translated into business success, raising important questions about the orientation of U.S. technology policy.

Officials from the White House National Economic Council, the Department of Commerce, the Department of Defense and GCA met this week in Washington to discuss the prospects for a public/private rescue of the company, but participants say little progress was made.

Despite the urgings of some Administration officials--and the implicit promise of government financial help--American Telephone & Telegraph and other companies involved in advanced chip-making technology have shown little interest in putting money into GCA.

Rep. Martin T. Meehan (D-Mass.), who has been urging action, said he believes that nothing will happen without a high-level push from the White House. Another meeting on the matter is scheduled for next week.

The GCA problem has been given new urgency in recent weeks by the shut-down of another company involved in advanced chip making equipment, Hampshire Instruments. In addition, SVG Lithography, the last American company with a significant presence in photolithography--and another major recipient of Sematech funds--earlier this month agreed to share its technology with Canon in return for marketing help and a cash infusion.

In the meantime, GCA’s parent, General Signal Corp., is going ahead with the liquidation of GCA, which it has been trying to sell since early this year. GCA’s service operations will be sold to management, and its lens-making division has attracted a number of interested suitors and remains in business.

But the manufacturing operation which builds the chip making machines known as wafer steppers closed on Friday, resulting in the layoff of the last 120 workers employed there.