News: Microelectronics
23 October 2026
Vertical Semiconductor gains $73m in US CHIPS Act funding
Power semiconductor start-up Vertical Semiconductor of Cambridge, MA, USA — which was spun out of Massachusetts Institute of Technology (MIT) in 2024 — has signed a letter of intent with the US Department of Commerce’s CHIPS Research and Development Office (CRDO) to receive up to $73m in federal incentives under the CHIPS and Science Act.
The proposed incentives are expected to accelerate R&D on vertical gallium nitride (GaN) power transistors, unlock domestic production of this technology, and strengthen the USA in power infrastructure for artificial intelligence (AI) and high-performance computing (HPC).
Vertical Semiconductor is developing vertical GaN FinFET technology that drives extreme efficiency and power density in power systems for AI data centers and critical energy infrastructure. The firm is scaling up technology originally invented with the support of the US Department of Energy’s Advanced Research Projects Agency–Energy (ARPA-E).
“Power is the most significant bottleneck in the build-out of AI infrastructure,” says CEO & co-founder Cynthia Liao. “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.”
Vertical GaN as high-impact technology of strategic importance to USA
Broad adoption of vertical GaN across the USA is expected to open up significant compute capacity with the same grid connection.
“The Trump Administration is accelerating American semiconductor innovation to enhance our domestic energy and power resources,” says Secretary of Commerce Howard Lutnick. “This investment expands domestic research, secures critical supply chains, and creates high-paying American jobs.”
Led by Vertical Semiconductor in collaboration with commercial partners, the vertical GaN R&D and commercialization initiative would culminate in a first-of-its-kind 2.5MW AI rack designed to reduce energy losses by 30%, shrink physical footprint by 50%, and convert previously wasted electricity into deployable compute capacity.
“This CHIPS R&D award will secure domestic production of next-generation vertical GaN technology,” says 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.”
The project would deploy the transistors across the full AI data-center power chain, driving compounding performance benefits from the grid to the compute.
MIT-spinout Vertical Semiconductor raises $11m in seed funding round led by Playground Global
