German Nvidia? Chip manufacturer from Dresden receives 100 million euros

Semiconductor technology is considered a “key strategic technology”. Now VCs and the federal government have invested on a large scale in the memory chip manufacturer FMC.

When it comes to chip companies, everyone thinks of Nvidia first. A memory chip factory is soon to be built in Sülzetal near Magdeburg, which may want to take on the giant and bring the technology to Europe: the Dresden company Ferroelectric Memory Company, or FMC for short.

FMC has now raised around 100 million euros in a Series C – 77 million from investors, 23 million from public funding, including from the European Innovation Council (EIC).

The German VC HV Capital and the Deep Tech & Climate Fund (DTCF) of the Federal Ministry for Economic Affairs and Energy led the way. The round is said to be one of the largest semiconductor financings in Europe.

The Munich-based VC Vsquared Ventures and the Impact Venture Fund eCapital also took part, as did some large companies through their venture arms, such as Bosch Ventures, Air Liquide Venture Capital, M Ventures (Merck) and Verve Ventures – all of which are already existing investors.

More energy efficient chips

FMC emerged in the TU Dresden environment and was founded in 2016 with the support of Bosch, Air Liquide, Merck, the Korean memory chip company SK Hynix and the semiconductor industrial machinery manufacturer Tokyo Elektron. Their hope: With its technology, FMC could be able to produce memory cells that would consume significantly less power than those from Nvidia, for example. This, in turn, would significantly reduce power consumption, especially in AI data centers. Thomas Rückes, CEO of FMC, speaks of a “next generation of memory chips” that are “significantly more sustainable, faster, more energy efficient and cheaper than today’s industry standard.”

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It is undisputed that the demand for chips will continue to increase. In fact, semiconductors have become a key strategic technology. The market is currently dominated by South Korea, the USA and Taiwan. Europe sees itself catching up – in Saxony-Anhalt, the “Silicon Saxony”. Back in July of this year, FMC announced that it wanted to build a large factory near Magdeburg and invest around three billion euros in Saxony-Anhalt. Half of this should come from the state, according to a report in the Handelsblatt at the time.

The location was not chosen by chance: the Taiwanese market leader TSMC is currently building its first European factory in Dresden, while Intel put its plans to start production in Magdeburg on hold last year.

Startups advance semiconductor technology

At the opposite end of the republic, work is also being done on European semiconductor sovereignty: The Aachen startup Black Semiconductor, founded in 2020 by the brothers Daniel and Sebastian Schall, secured total funding of 254.4 million euros in the spring of this year. Of this sum, 228.7 million euros come from public funds from the Federal Ministry for Economic Affairs and Climate Protection and the state of North Rhine-Westphalia. In addition, 25.7 million euros in equity capital will flow from investors such as Porsche Ventures, Project A Ventures, Scania Growth, Capnamic and other venture capital firms. This funding should spur the buildup of production capacity and the development of a new generation of graphene-based chips.