A multi-billion dollar transfer of technological power is occurring between two chip manufacturing giants.
The global semiconductor foundry market is experiencing a strategic turning point. On November 10, TSMC and GlobalFoundries announced that they have reached a technology licensing agreement, whereby TSMC will license its 650V and 80V Gallium Nitride (GaN) technology to GlobalFoundries.
This move marks TSMC’s official strategic withdrawal from the GaN foundry business, while GlobalFoundries seizes the opportunity to dominate the core track of third-generation semiconductors.
01 Strategic Withdrawal
TSMC’s technology licensing is not coincidental, but rather part of a carefully planned strategic adjustment.
According to the agreement, TSMC will license its GaN-on-Si (Silicon-based Gallium Nitride) technology at 650V and 80V to GlobalFoundries.
This decision is driven by TSMC facing increasing price pressure from Chinese competitors.
TSMC’s GaN business gross margin has significantly dropped from 35% in 2022 to 18% in 2024, leading to its decision to completely terminate GaN foundry services by 2027.
02 Technological Positioning
For GlobalFoundries, this technology licensing fills a gap in its high-end GaN technology.
Although GlobalFoundries began GaN research and development as early as 2020, its early products were limited to applications below 48V due to technological constraints.
With the introduction of TSMC’s technology, GlobalFoundries will directly gain solutions covering all voltage levels, accelerating the construction of its “trusted GaN process chain”.
03 Market Landscape
This collaboration will profoundly change the global competitive landscape of third-generation semiconductors.
As TSMC gradually exits the GaN foundry market, there will be a significant gap in global GaN wafer capacity above 650V.
With this licensing, GlobalFoundries is expected to capture over 60% of the North American market by 2026.
Its Vermont factory is planned to have a capacity of 20,000 wafers per month, equivalent to 15% of the current global demand for GaN wafers.
With the first licensed GaN wafers expected to roll off the production line in 2026, the global semiconductor industry is entering a new cycle of “silicon phase-out and compound phase-in”. This transfer of technological power not only reshapes the fate of companies but will also determine the position of various countries in the next generation of semiconductor competition.