The Aachen-based startup Black Semiconductor has secured total funding of 254.4 million euros. Financing of this amount has already been provided in the past, but the semiconductor startup's funding is somewhat different: 228.7 million euros of the total comes 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 is flowing from investors such as Porsche Ventures, Project A Ventures, Scania Growth, Capnamic and other venture capital firms. This funding is intended to drive the development of production capacities and the development of a new generation of graphene-based chips.
Founded in 2020 by brothers Daniel and Sebastian Schall, Black Semiconductor specializes in the production of fiber optic-based microchips. It started at the non-profit research center AMO in Aachen, which is affiliated with RWTH, where Daniel Schall received his doctorate.
More efficient through light
Black Semiconductor's goal is to increase the performance of chips through optical circuits. This technology uses light to transmit data in optical fibers, which significantly improves communication between chips and enables barrier-free networking. This represents a significant advancement over conventional methods, which reach their limits when it comes to communication between a large number of chips.
The development of this technology took several years. A turning point for the company was the Corona pandemic, which increased the interest of European politicians in optical chip technology. The brothers do not see themselves as competitors to large international chip manufacturers, but as part of an ecosystem that enriches the entire value chain of the semiconductor industry.
Advantage: The location – and the efforts in the EU to become more independent
The latest round of financing is expected to enable Black Semiconductor to develop a new generation of chip technology from research to mass production by 2031. A second site in Aachen is also planned to expand production capacity and create high-tech jobs in the region.
With this financing and the support of public and private investors, Black Semiconductor is well positioned to strengthen the European semiconductor value chain and contribute to Europe's technological sovereignty.
Daniel, an investment of this size from the state is unusual. What makes Black Semiconductor so important?
This is where the efforts to achieve sovereignty at European level are to our advantage. We are at the forefront with our technology and do not have to lag behind. We can now establish something new in Europe, with a material – graphene – that was also discovered here.
The question of location is certainly important. Is it your goal to only manufacture in Germany and Europe in the future?
It would be pointless to rule out everything else, as the semiconductor industry is international. But we would like to manufacture in Europe. Sovereignty means being able to make a relevant contribution. Our technology can be used in a variety of ways, both in the high-performance computing sector and in the automotive sector.
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Why did you go down the route of taking money from the government instead of from “regular” VCs or venture debt?
Capital intensity is one of the main reasons and Germany has the opportunity to be a pioneer with its investment. In order to transfer the idea from research to production, industrial facilities are needed that are very capital intensive. State support helps to overcome this hurdle. Venture capital is less suitable for building a factory.
What do you do with the capital?
We are building a production facility that is compatible with the semiconductor industry, with a wafer size of 300 millimeters, which is the current state of the art. In this way, we are developing a technology that enables more efficient computing networks, which is particularly important for AI applications.
How do you envisage further financing?
The financing from the EU project is secured for seven years. However, we will continue to raise capital every two years, probably in the traditional VC style.
Do European investors understand your business?
Yes, the expertise is there in Europe. There are investors who are interested in high technology and recognize the potential. The funds are getting bigger and the capital is there.
Is there the right know-how for your business? How important is the location?
We deliberately chose Aachen because it is a center for 2D materials and photonic technology. There are many other centers in the area, such as Leuven, Ghent, Eindhoven and Nijmegen. The main task in the next few years is to transfer the technology from research to production. To do this, we need specialists who understand photonics and the technology.
What about the availability of chip designers?
It is difficult to get chip designers because they usually work at big companies like Microsoft, Intel or Meta. We try to convince them with our new technological approach.
What advantages does your technology offer? Can you say something about specific areas of application?
It's about how we can make AI applications more efficient. Optical systems enable better linking of individual chips, which leads to greater efficiency. This is particularly interesting for operators of large data centers and ultimately also for end users. Currently, energy requirements are one of the major cost factors.
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Do you already have your first customers or letters of intent?
Yes, we have interested parties from the automotive sector and are working on partnerships for special connectivity solutions. Part of the funding also includes cooperations and we already have initial customer interest.
The chip giants TSMC and Intel want to produce in Germany, Apple designs in Germany. After the software hype of the past few years, is hardware now back in fashion?
Hardware has always been important, even if it hasn't always been recognized. The hardware industry has always provided advances that the software industry has been able to leverage. Now that hardware is reaching its limits, it's becoming a big issue again.
Who are your biggest competitors?
The industry has accepted that optics is “coming” in the semiconductor space. Silicon photonics is the first step. Our solution is more elegant, cheaper and more energy efficient. Specifically, companies like IR AyarLabs, Light Matter and Celestial AI are our competitors.
So you want to both design and produce chips?
In the beginning, we will create designs ourselves and produce the photonics. We will leave the electronics to the experts. Later, we could either act as a foundry – a pure contract manufacturer – or sell our own systems as an IDM (Integrated Device Manufacturer).
Here we show you the pitch deck with which Black Semiconductor who convinced investors. You can find more pitch decks on our overview page.
Source: https://www.businessinsider.de/gruenderszene/technologie/wie-sich-black-semiconductor-auf-einem-aussergewoehnlichen-weg-250-millionen-euro-sicherte-pitchdeck/
