Vertical Semiconductor is gearing up for a massive leap forward, having just signed a letter of intent with the U.S. Department of Commerce for up to $73 million in CHIPS Act funding.
This capital is earmarked for a clear purpose that fast-tracking the R&D and domestic production of next-generation vertical gallium nitride (GaN) power transistors. Ultimately, it’s a strategic move designed to cement U.S. leadership in the power infrastructure that drives AI and high-performance computing.
Born out of MIT and initially backed by the Department of Energy’s ARPA-E, Vertical Semiconductor specializes in vertical GaN FinFET technology. Simply put, this tech delivers extreme efficiency and power density for AI data centers and critical energy grids. Now, the company is ready to scale it up for commercial deployment.
Why Vertical GaN is a Strategic Priority
This announcement makes one thing clear that the U.S. government views vertical GaN as a high-impact, strategic asset.
Widespread adoption of this technology means we can unlock massive amounts of compute capacity without having to overhaul existing grid connections.
Alongside its commercial partners, Vertical Semiconductor is driving this R&D initiative toward a very tangible milestone, a first-of-its-kind 2.5-MW AI rack.
The performance targets are compelling:
- 30% reduction in energy losses.
- 50% smaller physical footprint.
- Directly converting previously wasted electricity into usable compute capacity.
By integrating these advanced transistors across the entire AI data center power chain, the efficiency gains won’t just be localized. They will compound at every step of the journey from the power grid all the way down to the processor.
Leadership Comments
“The Trump Administration is accelerating American semiconductor innovation to enhance our domestic energy and power resources,” said Secretary of Commerce Howard Lutnick. “This investment expands domestic research, secures critical supply chains, and creates high-paying American jobs.”
“This CHIPS R&D award will secure domestic production of next-generation vertical GaN technology and bolster U.S. leadership in advanced power semiconductor devices,” said Bill Frauenhofer, Executive Director of Semiconductor Investment and Innovation at the Department of Commerce. “Accelerating domestic R&D for this technology will strengthen America’s ability to convert and deliver power for the grid and super intelligence data centers.”
“Power is the most significant bottleneck in the build-out of AI infrastructure,” said Cynthia Liao, CEO and co-founder of Vertical Semiconductor. “The CHIPS R&D award will accelerate Vertical Semiconductor’s R&D and commercialization initiatives for vertical GaN, which will expand American compute capacity within existing power constraints.”
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