Aachen-based startup Black Semiconductor has raised a €254.4m Series A to make graphene-based microchips, designed for applications ranging from autonomous driving to generative AI.
€228.7m was secured from Germany’s federal government and the state of North Rhine-Westphalia under the European IPCEI Microelectronics program — an EU program which will invest public funding of €8.1bn in 56 companies for chip development and manufacturing. The amount will be drip-fed to the company over seven years.
Alongside public funding, Black Semiconductor raised €25.7m in equity led by Porsche Ventures and Project A Ventures, with participation from Scania Growth, Capnamic, Tech Vision Fonds, and Vsquared Ventures, among others.
The investment comes as European governments are trying to reduce the region’s dependence on China.
Black Semiconductor will use the capital to quadruple its headcount, from 30 to 120, in the next two years and set up a pilot manufacturing facility in Aachen by 2026.
The tech
Black Semiconductor was founded in 2019 as an independent company, spun out of the non-profit nanotechnology research center AMO, in Aachen.
It produces microchips with a photonic layer on top (which uses light to transfer data instead of silicon), using graphene as the main material for its electrical circuits. This technology speeds up data communication between chips; photonic interfaces on chips can process data 100 to 1,000 times faster than standard chips, according to CEO and cofounder Daniel Schall.
“We have developed something that is brand new and nobody has done it ever before. It’s a fundamental change,” says Schall.
The investor interest in Black Semiconductor’s technology comes at a time of high demand for data processing — which has been rapidly accelerated by mass AI adoption.
“When you use services like Google or even AI services on your laptop or mobile phone, in the background, it’s the efficiency in the data centre that allows your service. If the efficiency goes up, the service quality goes up, and that’s what we do with better-connected chips,” Schall says.
Building a European semiconductor industry
With the goal of tech sovereignty, the European Commission’s EU Chips Act from 2022 included up to $43 billion in targeted support for Europe’s semiconductor sector. In July 2023, Germany announced it would invest €20bn in subsidies in the semiconductor industry to attract foreign chipmakers to set up factories in the country.
Taiwanese chipmaker TMSC is building a factory in Dresden this year, while US chipmaker Intel is spending €30bn on building two new factories in the eastern German town of Magdeburg.
Black Semiconductor says it’s not concerned about these large corporations setting up chipmaker factories in Germany, as there’s plenty of talent in material research and photonics to go around.
“That’s why we stayed in Aachen. It will be more difficult to find chip designers. They are, in general, rare in Germany versus California or other places in the world where the big chip designers have their offices,” Schall says.
The pilot manufacturing facility is not optimised for output but for testing — it will only be able to produce between 10k and 100k semiconductor wafers per year in comparison to a larger semiconductor factory that produces around 100k wafers per month.
In seven years, by 2031, Black Semiconductor hopes to have the factory ready for mass production.
