Vertical Semiconductor signs LOI for up to $73 million in CHIPS Act incentives

Boston, 22 October 2026. Vertical Semiconductor, a power semiconductor company spun out of MIT, has signed a letter of intent with the U.S. Department of Commerce's CHIPS Research and Development Office (CRDO) to receive up to $73 million in federal incentives under the CHIPS and Science Act, the company announced on October 22, 2026.

The proposed incentives are expected to accelerate research and development of next-generation vertical gallium nitride (GaN) power transistors and support domestic production of the technology, according to the release. Vertical Semiconductor is developing vertical GaN FinFET technology for power systems in AI data centers and energy infrastructure. The company is scaling up a technology originally invented with support from the U.S. Department of Energy's Advanced Research Projects Agency-Energy (ARPA-E).

"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."

Led by Vertical Semiconductor with commercial partners, the initiative would culminate in a first-of-its-kind 2.5-MW AI rack designed to reduce energy losses by 30% and shrink physical footprint by 50%, the release states. The project would deploy the transistors across the full AI data center power chain, from the grid to the compute.

"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.

Secretary of Commerce Howard Lutnick said: "This investment expands domestic research, secures critical supply chains, and creates high-paying American jobs."

Source: Vertical Semiconductor news