“Black Semiconductor from Germany Secures $273M in Funding for Revolutionary Graphene Chip Technology”

Tech sovereignty has become a looming priority for a number of nations these days, and now a startup working in semiconductors has received a major boost in aid of that effort for Germany and Europe. The sum is one of the largest to date raised by a European startup working in semiconductors. Black is a spin-out from the University of Aachen co-founded by brothers Daniel and Sebastian Schall (respectively the CEO and CFO). The funding, a Series A, is important not just for its size but also because of the intention behind it. Porsche Ventures and Project A Ventures are co-leads, with participation from Scania Growth, Capnamic, Tech Vision Fonds, and NRW.BANK.

Tech sovereignty has become a pressing issue for many countries in recent times. In a significant boost for Germany and Europe, a startup that specializes in semiconductors has just secured a major funding milestone.

Black Semiconductor, whose focus is on developing a revolutionary chip-connecting technique based on graphene, has raised a whopping €254.4 million (equivalent to $273 million based on current exchange rates). This was made possible through a combination of private and public funding sources.

The amount is one of the largest ever secured by a European startup in the semiconductor industry. Black was founded as a spin-out from the University of Aachen by two brothers, Daniel and Sebastian Schall, who respectively hold the positions of CEO and CFO.

In an interview, Daniel Schall revealed that the funding would be utilized towards advancing their research and development efforts, building a “pilot” production facility in Aachen, recruiting more engineers and personnel from around the world, as well as streamlining the early stages of their business development. This will involve collaborating with major chip manufacturers across Europe, such as ASML in The Netherlands, to boost production on a larger scale, and also with leading “hyperscaler” technology companies, which are among the biggest purchasers of chips. Schall added that if their plans go as intended, they expect to be producing commercial products within the next seven years, by 2031.

The Series A funding round is significant not just because of its magnitude, but also because of its underlying objective.

A complete €228.7 million of the total amount is being contributed by the German federal government and North-Rhine-Westphalia, in the form of equity and funding under the “Important Project of Common European Interest” initiative. This is a €8.1 billion state aid package that was specifically set up by the European Commission in 2023 to cater to significant technological innovations like the one pursued by Black.

Speaking on the subject, Daniel Schall stated,

“Sovereignty is a key concern in Europe, and we have a groundbreaking technology that puts us ahead of the curve. Our approach is completely new, we’re not playing catch up to anyone. We have a unique opportunity to do something truly groundbreaking, and that’s what makes it so exciting.”

The remaining €25.7 million of the funding comes in the form of a more traditional equity round, in which Porsche Ventures and Project A Ventures serve as co-leads, with additional contributions from Scania Growth, Capnamic, Tech Vision Fonds, and NRW.BANK. Vsquared Ventures, Cambium Capital, and Onsight Ventures, a fund established by Hermann Hauser, the co-founder of ARM, had previously backed Black with around $6.6 million in seed funding in 2020, and they returned to invest in this more recent round as well.

Schall’s intense curiosity and intrigue about the workings of electronics traces back to his childhood, when he used to dismantle radios just to understand their mechanics. This fascination led to a deep interest in semiconductors, specifically transistors used in radios. While studying at Aachen, and experimenting with graphene, a thin layer of carbon, Schall and his team developed a concept for utilizing the material in photonics to establish connections between chips.

Explaining why he chose to focus on chip connectivity, Schall mentioned that while several companies were doing an excellent job at producing ever-improving chips (a market currently dominated by Nvidia and their GPUs), the connectivity aspect was still far from being completely solved, especially in contexts where hundreds or thousands of chips need to work in coordination. With most of the current efforts in chip connectivity revolving around silicon-based photonics and the broader semiconductor ecosystem involving over a hundred providers, Schall saw an opportunity to break new ground by taking his research to the market.

He stated,

“The main problem lies in efficiency. That’s the key issue: efficiency in processing.”

Given the massive expenses involved in operating data centers for cloud computing companies, any technology that can potentially lower these costs becomes highly valuable for not just improving profit margins but also for scaling to meet the ever-increasing demands for data usage. This is why Black is actively engaging in conversations with potential customers in the industry, to understand their requirements and secure their interest, even before the technology is ready to be rolled out.

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Zara Khan

Zara Khan is a seasoned investigative journalist with a focus on social justice issues. She has won numerous awards for her groundbreaking reporting and has a reputation for fearlessly exposing wrongdoing.

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