The U.S. Department of Commerce has rescinded a $23.8 million grant that it had previously awarded to advance semiconductor research and manufacturing in Vermont. The money would have provided funding for the Vermont Gallium Nitride Tech Hub — a consortium including the University of Vermont, the State of Vermont and GlobalFoundries, as well as other private companies. 

The group was one of six regional “tech hubs” that President Joe Biden’s administration in January tapped to receive grant money through the Regional Technological and Innovation Hubs program. Established as a part of the 2022 CHIPS and Science Act, the initiative seeks to encourage technological innovation and job growth in parts of the U.S. that the tech industry has traditionally overlooked. 

Tech hubs in Maine, Alabama, Oregon and Missouri, as well as one spanning Washington and Idaho, were similarly awarded funding in January. 

In a statement issued earlier this month, however, Commerce Secretary Howard Lutnick announced that under President Donald Trump’s administration the Department of Commerce was cancelling those grants, erasing approximately $210 million that had been pledged. 

“Regrettably, on its way out the door, the prior Administration announced awards to six Tech Hubs, even though the funds were not yet available,” Lutnick said in the release. “Moreover, the process was rushed, opaque, and unfair — administration officials did not make prospective applicants aware of the competition and chose awardees using outdated applications submitted nearly a year earlier.”

Lutnick said the department was “revamping” the Tech Hubs program and would be re-initiating the grant selection process with the hopes of reallocating the funding in early 2026.

According to Doug Merrill, UVM’s regional innovation officer, the nearly $24 million grant awarded to the Vermont tech hub would have helped fund three ongoing Vermont-based projects related to the research and development of semiconductors made of gallium nitride. The material can purportedly produce microchips that are more efficient and powerful than traditional silicon semiconductors.

The projects include a publicly accessible lab for testing devices with gallium nitride technology, a software design center and a workforce development project that would provide technical education to train students in microchip manufacturing.

Merrill said the Vermont consortium had learned as early as February that the process of finalizing its grant had been put on hold. Consequently, no funds had actually been received or spent yet. 

“There’s nothing that this announcement does that’s going to cause us to have to undo anything,” he said. 

Although the grant’s cancellation was “disappointing,” Merrill said, the Vermont group expects to continue moving forward with the projects using alternate streams of funding and plans to reapply for federal funds through the Tech Hubs program when the opportunity arises.

“We feel very strongly that we’re going to be very competitive in the next round,” Merrill said. “We were competitive in the last round, and we think we’re going to be as competitive if not more competitive in this round.”

In general, the CHIPS and Science Act, aimed to expand domestic semiconductor manufacturing while increasing investment in technological research in the United States. The Tech Hubs program in the bill contained multiple phases.

In fall 2023, as a part of phase one of the initiative, the U.S. Department of Commerce named the Vermont consortium as one of 31 tech hubs out of almost 400 similar collectives across the country that applied. That designation allowed the winning groups to apply for phase two funding.

The Biden administration had already distributed over $500 million in phase two funding to other tech hubs when it announced the latest round of grants in January.