Semiconductor Policy Gaps Persist in U.S. Manufacturing Incentives

GAO report reveals U.S. Commerce Department has not fully implemented critical semiconductor programs under the CHIPS Act, risking continued supply chain bottlenecks for tech goods.

The U.S. Government Accountability Office (GAO) issued an August 6, 2026 update to its December 2025 assessment, finding the Commerce Department has failed to meet key requirements under the Fiscal Year 2021 National Defense Authorization Act for semiconductor manufacturing incentives. Despite awarding $13.1 billion to 49 projects across 24 companies under the CHIPS and Science Act, the Department has spent only 5% of its $11 billion appropriation ($7.8 billion disbursed). Critical gaps include canceling a $7.4 billion nonprofit award to establish the National Semiconductor Technology Center (NSTC), terminating a semiconductor Manufacturing USA institute, and failing to make disbursements under two National Advanced Packaging Manufacturing Program (NAPMP) awards. The GAO specifically notes the Department has not established the NSTC, implemented NAPMP requirements, or renewed its Industrial Advisory Committee charter as mandated by law.

This underperformance directly impacts semiconductor supply chain resilience. The GAO report highlights that incomplete implementation of these programs creates bottlenecks in critical manufacturing infrastructure, which could delay the production of affordable tech goods and increase costs for consumers and businesses reliant on semiconductors.

For goods abundance, resolving these gaps would reduce semiconductor supply chain friction and lower tech costs for everyday products. Currently, the Department’s failure to meet baseline requirements represents a friction point in the transition toward cheaper, more accessible technology goods. The next critical step is whether the Commerce Department will develop detailed plans for the National Semiconductor Technology Center and fully implement NAPMP requirements by Q4 2026, as the GAO recommends.

*Note: This brief uses data from the GAO’s August 6, 2026 report, which updates a December 2025 assessment and reflects status as of April 2026. The full analysis remains with the GAO.*

Source: Manufacturing Dive