SandboxAQ wins $500M CHIPS R&D award for AI-driven semiconductor materials discovery
The U.S. Department of Commerce's CHIPS Research & Development Office announced a $500 million definitive agreement with SandboxAQ on June 17, 2026, to develop critical semiconductor manufacturing materials and chemistries. The award focuses on four strategic areas: PFAS-free process chemicals, advanced catalysts, rare earth-free permanent magnets, and battery systems for fab backup power. The Commerce Department will receive a minority, non-voting equity stake in SandboxAQ, plus future royalty payments from commercialized formulations. SandboxAQ will leverage its ReAQT simulation platform and Large Quantitative Models (LQMs)—AI systems trained on laws of physics, chemistry, and biology—to screen millions of candidate compounds and compress materials development timelines from decades to weeks.
The award addresses acute supply chain vulnerabilities in domestic semiconductor manufacturing. PFAS (forever chemicals) are used throughout chip lithography as heat-transfer fluids and lubricants, but no compliant alternatives exist at scale. SandboxAQ will develop PFAS-free drop-in replacements and on-site breakdown methods. For catalysts, the company's AQCat workflows—built on 13.5 million quantum chemistry calculations developed with NVIDIA—will screen novel materials 20,000 times faster than traditional methods. China controls over 90% of global neodymium-based permanent magnet production; the award targets rare earth-free alternatives for semiconductor equipment actuators and vacuum pumps.
This is one of the largest federal investments to date in physics-based AI for scientific discovery and signals a shift beyond chip design automation toward foundational materials supply-chain security. Manufacturing stack and supply-chain architects should monitor SandboxAQ's progress on PFAS replacement and rare earth-free magnet development as barometers of domestic fab cost and lead-time trajectories. The government equity stake and royalty structure set a new model for CHIPS Act partnerships, blending R&D funding with commercial upside sharing. Success would reduce fab dependency on foreign chemistries and reduce time-to-production for new node introductions.
Sources
- Primary source
- nist.gov
“The Department of Commerce's CHIPS Research & Development Office today announced the signing of a definitive agreement with SandboxAQ for a $500 million award under the CHIPS and Science Act”
- prnewswire.com
“The award will accelerate the development and deployment of SandboxAQ's Al-driven materials discovery platform to address critical semiconductor materials bottlenecks and supply chain risks, including developing new molecules and chemistries for alternatives to PFAS "forever chemicals," advanced catalysts, rare earth-free magnets, and novel battery chemistries”
- quantumcomputingreport.com
“SandboxAQ's AQCat workflows—built on 13.5 million high-fidelity quantum chemistry calculations developed in collaboration with NVIDIA—to screen catalyst candidates at near-quantum-chemistry accuracy 20,000 times faster than traditional methods”