Vermont's Next Big Thing: U.S. Funding + Global Deal = Jobs in High-Tech Power Gear

The immediate impact will likely involve retaining existing high-skilled positions and creating additional engineering and technical roles to support the new GaN process.

On November 10, 2025, GlobalFoundries announced a technology licensing agreement with Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest chip manufacturer. Under this deal, GlobalFoundries will license TSMC’s proven gallium nitride (GaN) technology for use at its Essex Junction, Vermont facility.

The agreement covers TSMC’s 650-volt and 80-volt GaN processes, which are designed for power management applications. GlobalFoundries plans to begin developing and qualifying this technology at its Vermont plant in early 2026, with volume production targeted for late 2026.

Understanding Gallium Nitride Technology

Gallium nitride represents a significant advancement over traditional silicon for power electronics. As legacy silicon technology faces scaling limitations, GaN has emerged as a superior alternative for managing electrical power.

GaN’s key advantage lies in its properties as a wide-bandgap semiconductor. This allows devices made from GaN to operate at higher temperatures and voltages while switching faster and more efficiently than silicon-based alternatives. The practical result is more efficient and compact power systems—smaller power adapters that waste less energy as heat, more efficient systems for data centers, longer-range electric vehicles, and better renewable energy equipment.

The target markets for this technology include artificial intelligence data centers, electric vehicles, 5G and 6G communications infrastructure, and industrial power applications.

Vermont’s Existing GaN Program

This deal does not mark GlobalFoundries’ entry into GaN technology. Rather, it accelerates an already substantial, multi-year program at the Essex Junction facility.

Since 2022, the Vermont plant has received significant federal and state funding specifically for GaN development:

• October 2022: $30 million in federal funding to advance GaN-on-silicon development and production

• October 2023: $35 million in additional federal funding to accelerate GaN manufacturing

• March 2024: $125 million from the CHIPS and Science Act to modernize the facility and create “the first U.S. facility capable of high-volume manufacturing of next-generation gallium nitride semiconductors”

• March 2024: $4.5 million from the State of Vermont for employee training

• December 2024: $9.5 million from the U.S. Department of Defense to advance manufacturing

• June 2025: A commitment of $3 billion in R&D investment, including funds to upgrade the Vermont facility for large-scale GaN production

The TSMC licensing agreement represents a strategic decision by GlobalFoundries to acquire proven, production-ready technology rather than complete the lengthy process of scaling up its own internal research to high-volume manufacturing. By licensing TSMC’s established process, GlobalFoundries gains immediate access to production-ready designs that significantly reduce development time and risk.

TSMC’s Exit from GaN Manufacturing

A crucial context often missing from public announcements is that TSMC is not expanding its GaN business—it’s exiting it entirely.

In July 2025, TSMC confirmed it will end all GaN wafer foundry services by July 31, 2027. The decision was driven by rising price pressure from Chinese competitors, which eroded profit margins in what TSMC considers a mature, lower-margin technology segment.

For TSMC, whose business model centers on high-margin, cutting-edge chip technology, competing in a price war with Chinese manufacturers in a commoditizing market makes little strategic sense. The company plans to repurpose its Hsinchu Fab 5, currently used for GaN production, for advanced packaging beginning July 1, 2027.

This means the GlobalFoundries deal serves very different purposes for each company. For TSMC, it’s a profitable way to monetize technology it’s abandoning while avoiding shutdown costs. For GlobalFoundries, it’s an opportunity to acquire world-class technology and capture market share from TSMC’s departing customers.

The U.S. Semiconductor Strategy

The deal aligns closely with U.S. government objectives under the CHIPS and Science Act, which aims to bolster domestic semiconductor manufacturing and create secure domestic supply chains for critical chips.

The arrangement creates an efficient public-private partnership: federal funding through the CHIPS Act modernized GlobalFoundries’ Vermont facility specifically for GaN production, and GlobalFoundries then used private capital to license proven technology from TSMC. The result is a U.S.-based, high-volume manufacturing source for a critical technology coming online by late 2026—far faster than if GlobalFoundries had relied solely on internal development.

This provides a domestic supply chain for applications critical to national and economic security, including defense systems, data centers, and electric vehicle infrastructure.

The Europe Dimension

While GlobalFoundries and TSMC are cooperating in Vermont, they remain fierce competitors elsewhere. Throughout 2023 and 2024, GlobalFoundries publicly challenged massive German government subsidies awarded to TSMC for a new manufacturing facility in Dresden, Germany.

GlobalFoundries, which has operated in Dresden for 25 years, formally complained to the EU Commission about the subsidies, arguing they distort competition and that TSMC has received far more state aid for its new project than GlobalFoundries received over decades of operation. The company warned that subsidizing the market leader risks dependence on a single supplier and less resilient supply chains.

The EU Commission ultimately approved the German state aid for TSMC’s project as part of over €31.5 billion in approved EU Chips Act projects.

This dynamic reveals the complex, transactional nature of the modern semiconductor industry, where companies can simultaneously partner in one region while competing aggressively in another.

A History of Conflict

The current relationship between GlobalFoundries and TSMC is built on a foundation of past legal warfare.

In August 2019, GlobalFoundries filed patent infringement lawsuits against TSMC in the U.S. and Germany, accusing the company of infringing 16 patents. TSMC responded swiftly in October 2019, countersuing GlobalFoundries in the U.S., Germany, and Singapore, alleging infringement of 25 of its own patents.

The conflict ended abruptly on October 28, 2019, when both companies announced a settlement that dismissed all litigation and established a “broad global patent cross-license.” This 2019 agreement created the framework that enables transactions like the 2025 GaN deal while the underlying competitive rivalry continues.

Market Impact and Customer Migration

TSMC’s exit from GaN manufacturing creates immediate disruption for fabless semiconductor companies that design chips but don’t own manufacturing facilities. Companies that previously relied on TSMC for GaN foundry services, such as Navitas, must now find new manufacturing partners.

GlobalFoundries is positioned to capture this market opportunity. By running a TSMC-equivalent process, it offers former TSMC customers a smooth technical transition. The Vermont facility also provides a domestic manufacturing source, which offers supply chain security advantages over Chinese or other Asian alternatives.

GlobalFoundries is already establishing partnerships, including one with Cambridge GaN Devices, to serve this transitioning customer base.

Employment Considerations

Public messaging around the GaN program frequently mentions job creation, with some sources claiming the initiative will create “thousands of jobs.” However, this figure requires context.

The $125 million in CHIPS Act funding is designated for modernizing and upgrading an existing facility, not building a new plant from scratch. Modernization projects—which involve installing new equipment in existing buildings—create different employment outcomes than new construction projects.

The “thousands of jobs” figure appears to represent a long-term, regional economic projection for the entire V-GaN ecosystem, including university research, new startups, and indirect service employment, rather than direct hiring at the GlobalFoundries facility in the near term. The immediate impact will likely involve retaining existing high-skilled positions and creating additional engineering and technical roles to support the new GaN process.

What Happens Next

The timeline for implementation is aggressive:

Early 2026: GlobalFoundries will begin developing and qualifying the licensed TSMC GaN technology at its Essex Junction facility.

Late 2026: Volume production is scheduled to begin, with products available to global customers.

July 2027: TSMC will completely exit the GaN foundry business, making GlobalFoundries’ Vermont facility a critical alternative source for companies that previously manufactured with TSMC.

For Vermont, the convergence of federal CHIPS Act funding, TSMC’s technology transfer, and GlobalFoundries’ existing expertise positions the Essex Junction facility to become a significant hub for power semiconductor manufacturing—a technology increasingly critical to artificial intelligence infrastructure, electric transportation, and renewable energy systems.

The success of this initiative will depend on GlobalFoundries’ ability to quickly qualify the licensed technology, attract customers transitioning away from TSMC, and scale production to meet demand in rapidly growing markets.