Taiwan Semiconductor Manufacturing Co. transferred gallium nitride power chip technology to GlobalFoundries in one of its final moves before abandoning the business, underscoring the foundry giant’s retreat from lower-margin semiconductor segments as it focuses resources on artificial intelligence chips.
TSMC will license 650V and 80V GaN technologies to the U.S. chipmaker, which plans to begin production at its Burlington, Vermont facility in late 2026. The deal comes four months after TSMC announced plans to exit GaN foundry services by July 2027, citing price pressure from subsidized Chinese competitors and limited profitability. TSMC produces only 3,000 to 4,000 six-inch GaN wafers monthly, generating minimal revenue compared to its $15 billion quarterly earnings from high-performance computing chips.
Chairman C.C. Wei finalized the exit decision in mid-2025, prioritizing investments in advanced packaging and 2nm process technology for AI applications. The company plans to convert its Hsinchu Fab 5, currently used for GaN production, to advanced packaging facilities. TSMC already has begun outsourcing some 40-90nm orders to affiliate Vanguard International Semiconductor and selling equipment to reduce exposure to mature process technologies.
The licensing arrangement allows TSMC to monetize its GaN intellectual property while maintaining its projection of 24% to 26% revenue growth for 2025, dominated by demand from customers including Nvidia and Apple for cutting-edge logic chips.
