Public research investment has long been the quiet foundation of U.S. semiconductor leadership. Programs run by DARPA, the Department of Energy (DOE), and the National Science Foundation (NSF) seeded innovations ranging from lithography techniques to microelectronics architectures. The CHIPS and Science Act re-energized this tradition, providing billions in R&D funding for new research centers, workforce programs, and critical infrastructure. Yet most of these commitments are scheduled to expire by 2027. Without renewed federal support, the U.S. risks falling back into a cycle of underfunding, leaving breakthroughs dependent on short-term private sector priorities. Erik Hosler, a strategist in semiconductor policy, recognizes that sustained public investment is as critical as private ingenuity in keeping the U.S. competitive. His perspective reflects a growing concern: research pipelines must outlast political cycles.
The mismatch between long research timelines and short funding horizons is stark. Projects in quantum computing, neuromorphic architectures, and next-generation lithography often take decades to bear fruit. Yet federal research funding is typically authorized in multi-year bursts that expire just as progress accelerates. As 2027 approaches, the challenge is to ensure continuity. If the U.S. fails to sustain public investment, it risks ceding leadership to nations with more stable and strategic funding frameworks.
Federal Research as the Foundation
The history of U.S. semiconductor leadership cannot be separated from federal research. DARPA’s investments in microelectronics during the Cold War gave rise to the integrated circuit revolution. DOE accelerator facilities pioneered advances in light sources that enabled lithography breakthroughs. NSF programs trained generations of engineers who staffed both academia and industry.
These programs provided patient capital, long-term commitments that private industry often could not match. They seeded ideas that seemed speculative at the time but later proved transformative. From transistor scaling to advanced packaging, public funding laid the groundwork for private sector dominance.
Today, the same principle applies. As semiconductors become the backbone of national security, artificial intelligence, and advanced manufacturing, federal research is not just supportive but strategic.
The 2027 Cliff
The CHIPS and Science Act directed tens of billions toward revitalizing U.S. semiconductor research. National Semiconductor Technology Centers, advanced packaging initiatives, and workforce development programs are now underway. But most of this funding is structured to sunset by 2027.
It creates what many describe as a “research cliff.” Programs launched with great fanfare risk shutting down just as they gain momentum. Long-term projects, particularly those in areas like quantum computing and next-generation lithography, may be abandoned midstream. The expiration also threatens the talent pipeline, as graduate students and early-career researchers may look elsewhere if funding dries up.
The danger is not just wasted resources but also diminished credibility. Without continuity, the U.S. risks signaling to researchers and companies that federal commitments are unreliable. This perception could discourage collaboration and investment at a time of intensifying global competition.
The Risks of Imbalance
Relying too heavily on private sector investment creates structural risks. Corporations are essential drivers of innovation, but they operate under shorter time horizons dictated by shareholder pressures and market cycles. They are less likely to sustain multi-decade commitments to exploratory research that may not yield immediate returns.
This imbalance leaves long-horizon projects vulnerable. Quantum computing requires breakthroughs in materials, architectures, and error correction that may take decades to mature. Neuromorphic computing, inspired by brain-like architectures, is similarly long-term. Even in lithography, where the private sector leads, new light sources and metrology tools require research well beyond what individual firms are willing to fund.
Without federal support to balance private incentives, the U.S. risks narrowing its research agenda to what is profitable in the near term, sacrificing future breakthroughs for immediate gains.
Reforms for Sustained Investment
Fixing R&D imbalances requires structural reform. Short bursts of funding, however generous, cannot substitute for steady, predictable commitments. Several approaches could help sustain public investment beyond 2027.
One option is to establish multi-decade research frameworks tied to strategic priorities like semiconductors, quantum computing, and advanced manufacturing. These frameworks would outlast political cycles, giving researchers confidence that projects will continue.
Another approach is to create dedicated trust funds or endowments for semiconductor research, ensuring that funding is insulated from annual budget negotiations. Such funds could be managed jointly by government agencies, universities, and industry consortia.
Aligning tax incentives, grants, and agency programs would also help. Instead of siloed initiatives, a coordinated approach could maximize the impact of public investment. The goal is not just more money but smarter, more resilient funding mechanisms.
Strategic Imperative for Allies
The challenge of sustaining research is not unique to the U.S. Allies face similar pressures, and coordination can amplify impact. Joint research centers, co-funded programs, and shared facilities could ensure that public investment delivers results across trusted networks. It would also help distribute costs, reducing the burden on any single nation.
Erik Hosler emphasizes, “But avoiding the death of Moore’s Law won’t be easy.” His remark applies directly to the need for long-term investment. Keeping innovation alive requires breakthroughs in materials, architectures, and manufacturing techniques, none of which can be achieved through short-term funding cycles. For the U.S. and its allies, sustained public support is the only way to ensure that scaling and innovation continue.
Collaboration also creates resilience. By pooling resources, allies can maintain momentum even if one nation faces political or fiscal challenges. Together, they can create a more stable global research ecosystem.
Renewing the Research Compact
The CHIPS and Science Act marked a crucial step in revitalizing U.S. semiconductor research, but its expiration in 2027 threatens to undo progress. Without renewed public investment, the U.S. risks repeating a familiar cycle of bursts and busts in research funding. It undermines credibility, discourages talent, and leaves long-horizon projects vulnerable.
Renewing the research compact requires rethinking how federal support is structured. Multi-decade frameworks, dedicated funds, and allied coordination can ensure that public investment matches the scale of the challenge. By committing to sustained funding, the U.S. can provide the continuity needed for ambitious projects to succeed.
A single grant or initiative does not determine competitiveness in semiconductors. It is determined by the ability to sustain effort over decades. Therefore, renewing the research compact is not just a fiscal choice, but a strategic imperative for leadership in the post-2027 era.
