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Black Semiconductor Raises $273 Million

The company Black Semiconductor, which is based in Germany and develops graphene-based technology for connecting chips, was able to raise investment funds for 254.4 million euros (about $273 million).

Black Semiconductor Raises $273 Million

The mentioned funds were obtained by the firm due to a combination of private and public financing.

It is worth noting that technological sovereignty is currently a goal for many countries. The experience of the coronavirus pandemic, when various restrictive measures were imposed against the background of a significant deterioration in the sanitary and epidemiological situation and caused large-scale disruptions in the supply chain demonstrated the importance of autonomy in providing for the needs. The practice of combating the spread of the specified disease provided solutions that either stopped or significantly slowed down production and business processes. Against the background of this experience, an understanding has been formed that the autonomy of providing the country with everything necessary, including in the context of the needs of the technology sector, in certain conditions of reality is not just an advantage, but a vital exigency. The current configuration of the state of affairs in the space of geopolitical relations signals that in the short term, the mentioned sovereignty will become something like a survival condition. Today, tensions are growing in the global political environment. For example, the United States has imposed restrictions on the supply of advanced chips to China and plans to expand the relevant practice. Technological sovereignty is gradually being transformed into a guarantee of positive prospects for the development of the country, including in the economic dimension of the system of state existence. Nowadays, the era of digitalization is observed in the space of vital activity of human civilization, which implies the transfer of many processes to the virtual world. Against the background of this tendency, which accelerated in the face of the highly intensive development of artificial intelligence, the value of technological sovereignty has increased. Countries that do not have their own technologies are likely to lose their political positions in the sphere of international relations on a certain scale and will be deprived of an important source of economic growth, which will have consequences for the situation in the social environment.

Currently, there is an increase in demand for computing power. The corresponding demand concerns all countries that are interested in technological development. Startups operating in the semiconductor area, against the background of the mentioned realities, have received a positive impetus to move forward. Computing power is a subject of increased interest in Europe in general and in Germany in particular.

Black Semiconductor was able to raise investment funds, the amount of which is one of the largest among the financing volumes ever received by European startups. The mentioned company was founded at the University of Aachen by brothers Daniel and Sebastian Schall, who hold the positions of chief executive officer and chief financial officer respectively.

Daniel Schall stated that the received funding will be used for research and development. Also, according to him, part of the money will be used to build a pilot production facility in Aachen. Moreover, the investment will be aimed at hiring engineers and other personnel. Currently, the number of employees of the company is 30 people. Black Semiconductor will use another part of its investments to develop its business.

The company is committed to direct cooperation with the largest chip producers in Europe. Black Semiconductor also intends to form a partnership with the Dutch manufacturer of equipment for making microcircuits ASML. Appropriate cooperation will allow the company to increase production volumes.

Moreover, Black Semiconductor is interested in partnering with firms specializing in cloud computing and other so-called hyperscaler brands, which are among the largest buyers of chips.

The startup intends to release its first commercial volume-ready products by 2031. Daniel Schall says that the corresponding goal will be achieved if all intentions are implemented within the framework of a pre-formed plan.

So far, Black Semiconductor is not ready for commercial prime time. The company operates in the groundbreaking sphere, which has yet to make the transition to commercial production in the future. It is worth noting that the relevant perspective is currently largely a theoretical probability, the materialization of which does not belong to the category of what can be designated as a kind of guaranteed scenario of the future.

During a conversation with media representatives, Daniel Schall answered in the affirmative to a question from journalists about whether he perceives his company as a startup of deep technologies. He also stated that Black Semiconductor includes employees who do not overlook anything.

The Series A financing round, which resulted in the company receiving investment funds, is important not only in terms of size but also in the context of intentions that form something like the ideological basis of the relevant process. Of the sum of 254.4 million euros, 228.7 million euros were allocated by the German Federal Government and the state of North-Rhine-Westphalia. In this case, a combination of equity and funding is fixed based on the Important Project of Common European Interest provision, an 8.1 billion euro piece of state aid that the European Commission carved out in 2023 specifically for big technology swings.

Daniel Schall says that technological sovereignty is an important issue for Europe. According to him, Black Semiconductor has a competitive solution. In this case, it means a technology that will allow to get ahead of other developers. According to Daniel Schall, his company enables fundamentally new products and does not seek to inherit anyone.

Germany is ready to bet on the development of the domestic chip industry. Berlin expects that these efforts will eventually pay off. Robert Habeck, Germany’s minister for economic affairs and climate action, said that faster chips are crucial, especially in artificial intelligence apps, noting that the Black Semiconductor project is very promising. According to him, the courage and perseverance of the startup have a positive result, which is that this company is the only firm at an early stage of existence among the 31 projects of the IPCEI initiative in the microelectronics area.

As part of the classic round of raising funds, Black Semiconductor received 25.7 million euros. Porsche Ventures, Project A Ventures, Scania Growth, Capnamic, Tech Vision Funds and NRW.BANK, Vsquared Ventures, Cambium Capital, and Onsight Ventures participated in this process.

The most obvious group of Black Semiconductor customers are companies that specialize in the construction and operation of data centers. Clients of the mentioned firms may also be interested in startup products.

The intention to collaborate with Black Semiconductor has already been announced by Spain’s Semidynamics, which intends to combine the German vendor’s technology with US-based Global Foundries technology to develop a chip for later use in artificial intelligence apps and memory purposes.

Porsche’s participation in the financing round is significant because it reflects a broader tendency, which is that automotive companies are major buyers of advanced technologies for developing systems for both connected vehicles and cloud services necessary for the operation of those respective autos.

Patrick Huke, partner and head of Porsche Ventures, says that investing in Black Semiconductor is a great opportunity to use photonics technologies that are easily integrated into conventional chips for various industry segments, application scenarios, and future artificial intelligence apps. Also in this context, it was noted that the combination of public and private financing means that the Schall brothers company nowadays is in a good position to build a strong semiconductor business within Europe, which will strengthen not only domestic competitiveness but also the overall regional microcircuits ecosystem.

Working with graphene, an atom-thick carbon allotrope, Black Semiconductor has developed the concept of using a material optimal for photonics to connect chips. According to Daniel Schall, his logic in focusing on connecting microcircuits was not only because there are already many companies developing excellent and constantly improving chips. Nowadays, the mentioned sphere of activity is dominated by Nvidia and its graphics processing units (GPUs). Daniel Schall’s logic is more related to the fact that the connectivity problem has not yet been completely solved. This problem is especially relevant in the context of situations where hundreds or thousands of chips might be working together.

Currently, most of the efforts to connect microcircuits are focused on silicon-based photonics. The broader semiconductor ecosystem typically extends to more than 100 suppliers. Against this background, Daniel Schall has recorded the opportunity to reach a new level by commercializing his research. According to him, the main problem is the efficiency of computing.

Black Semiconductor is currently actively communicating with potential customers in the ecosystem to understand their needs and secure their interest even before the company’s technology enters the market. Against the background of the very significant cost of operating data centers, technologies that could mitigate corresponding expenditures are important not only in the context of increasing the margin of cloud providers but also in terms of scaling prospects to meet data usage needs.

Stefan Hoechbauer, managing Director of AWS Germany and Europe Central, expressed admiration for Daniel and Sebastian Schall’s unwavering commitment to pushing the boundaries of what is possible today. In this context, it was also noted that the corresponding aspiration is fully consistent with AWS’ builder mindset.

Currently, there is no information about the value of Black Semiconductor. It is worth noting that in the case of successful implementation of all the company’s plans, the corresponding indicator will be very high. At the same time, practical experience shows that even the most promising projects and initiatives in the area of material realization can face various obstacles and impediments. Black Semiconductor currently has the potential to succeed, but the path to the goal remains to be traversed

It is worth noting that the European chip industry is still in its initial stage. Projects like Black Semiconductor’s initiatives are moving the region forward in the development of microcircuits. In addition to chip development startups, Europe also needs manufacturing facilities for making the relevant products. Whether the corresponding challenge will be met in the context of the quest for technological sovereignty will be known in time.

As we have reported earlier, Startup xAI Raises $6 Billion.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.