Sematech May Begin Phasing Out $90 Million in Federal Funding

Computer consortium Sematech has indicated that it will propose phasing out its $90 million in annual federal funding and scaling back its operations as early as two years from now.

After a board meeting Friday in which directors voted to “propose a new model of industry-government cooperation,” the 7-year-old chip manufacturing research consortium said in a statement that it has succeeded in advancing the United States’ chip-making know-how.

Sematech, which employs about 800 people, said it will begin “a natural evolution” to a “project management and coordination role.”

That role “will lead to a change in Sematech’s structure and funding levels,” the statement said. The consortium’s board will discuss the changes in the next two months.

The board includes representatives of the 11 member companies, the Defense Department’s Advance Research Projects Agency and Semi-Sematech, an association of equipment and materials suppliers.

Consortium spokesman John Pope said the board has voted to continue providing the group with $90 million a year for now. Any change in Sematech funding “would provide a transition period of at least two years,” he said.

The House of Representatives has already approved the $90 million funding request for next year for Sematech.

But during a visit to Austin last month, Arati Prabhakar, the government’s former principal consortium liaison, said Sematech needed an “exit strategy” for its financial dealings with the U.S. government.