Vertical Semiconductor, a Boston-based power semiconductor company spun out of the Massachusetts Institute of Technology, has signed a letter of intent with the U.S. Department of Commerce for up to $73 million in proposed funding under the CHIPS and Science Act.
The funding would support research, development, and commercialization of next-generation vertical gallium nitride power transistors intended to improve electricity delivery for artificial intelligence data centers and other high-performance computing infrastructure.
The proposed financial assistance would be provided through the Department of Commerce’s CHIPS Research and Development Office and is designed to accelerate domestic development and production of advanced power semiconductor technologies.
Vertical Semiconductor is developing a vertical gallium nitride FinFET platform intended to deliver greater power efficiency and higher power density than conventional semiconductor power conversion approaches.
Gallium nitride is a semiconductor material used in high-performance power electronics because of its ability to support efficient electrical switching and operation under demanding conditions.
The company’s vertical transistor architecture is designed to reduce energy losses during power conversion while limiting heat generation and the physical space required for electrical infrastructure.
These capabilities are becoming increasingly important as AI data centers require substantially more electricity to power advanced processors and other computing systems.
Vertical Semiconductor believes that improvements in power conversion efficiency could allow data center operators to deploy additional computing capacity without requiring proportional increases in available grid power.
The company’s technology originated from research supported by the U.S. Department of Energy’s Advanced Research Projects Agency–Energy.
The proposed CHIPS funding would support further development of the technology and help establish domestic production capabilities for vertical gallium nitride devices.
As part of the initiative, Vertical Semiconductor plans to collaborate with commercial partners on a demonstration involving a 2.5-megawatt AI computing rack.
The proposed system is designed to demonstrate how vertical gallium nitride technology can improve power delivery throughout the data center infrastructure.
According to the company, the demonstration aims to reduce energy losses by approximately 30% while decreasing the physical footprint of power conversion equipment by 50%.
These improvements could allow a greater portion of available electricity to reach computing equipment rather than being lost during conversion and distribution.
The project also intends to demonstrate the benefits of deploying advanced semiconductor devices throughout the AI data center power chain, from grid connections to computing hardware.
Vertical Semiconductor sees the technology as an opportunity to help address one of the primary infrastructure constraints affecting the expansion of AI computing capacity.
The company also expects the technology to have applications in critical energy infrastructure where power conversion efficiency, reliability, and equipment density are important considerations.
The proposed federal funding reflects efforts to advance domestic semiconductor technologies that support both AI infrastructure and broader energy systems.
The letter of intent represents a preliminary funding milestone rather than a final award. The contemplated financial assistance will depend on completion of the applicable federal approval process and definitive agreements.
If finalized, the investment would support Vertical Semiconductor’s commercialization plans while contributing to the development of domestic power semiconductor manufacturing capabilities.
KEY QUOTES:
“Power is the most significant bottleneck in the build-out of AI infrastructure. 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.”
Cynthia Liao, CEO And Co-Founder Of Vertical Semiconductor
“The Trump Administration is accelerating American semiconductor innovation to enhance our domestic energy and power resources. This investment expands domestic research, secures critical supply chains, and creates high-paying American jobs.”
Howard Lutnick, U.S. Secretary Of Commerce
“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. 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.”
Bill Frauenhofer, Executive Director Of Semiconductor Investment And Innovation At The U.S. Department Of Commerce
