First, line a 9x9-inch square baking dish with wax or parchment paper. This will make it easy to lift the fudge out later for cutting.
In a medium saucepan over medium heat, combine the white chocolate chips and sweetened condensed milk. Stir frequently until the mixture is completely melted and smooth. This will only take a few minutes, but keep an eye on it so the chocolate doesn’t scorch!
While the chocolate is melting, chop the gumdrops into halves and quarters. This size is perfect for getting a bite of chewy candy in every piece of fudge.
Once the chocolate mixture is smooth, remove it from the heat and stir in the vanilla extract. Then, gently fold in the chopped gumdrops until they’re evenly distributed throughout the fudge.
Pour the fudge mixture into your prepared baking dish, smoothing it out evenly with a spatula. Pop it in the fridge and let it chill for at least 4 hours (the waiting game begins!).
Once the fudge has set, lift it out using the parchment paper, and cut it into squares.