Lace raises $40 million to advance semiconductor technology

Lace, a Norway-based semiconductor equipment startup supported by Microsoft, has raised $40 million to develop a technology that could enable major advancements in chip design and manufacturing, the company announced on Monday.

To produce cutting-edge chips, manufacturers such as Taiwan Semiconductor Manufacturing Co and Intel use a process called lithography, which uses light to engrave the complex circuits that form the basis of advanced AI processors.

Industry players use optical lithography systems made by the Dutch company ASML – which dominates the market – in a fierce race to miniaturize components and integrate more functions to boost computing power on a limited silicon surface.

This sector is attracting renewed interest from investors and governments as a new wave of startups emerges, some of which aim to compete with the Dutch firm.

Lace has developed a unique approach. Instead of light, Lace engineers have created a form of lithography using a beam of helium atoms. Thanks to this, the Norwegian company will be able to create chip architectures 10 times smaller than what is currently achievable, said CEO Bodil Holst in an interview with Reuters.

“Our technology is a path that can potentially extend the industry’s roadmap and enable achievements that would not otherwise be possible,” Ms. Holst added.

The main advantage of the helium atom beam is that the industry could create structures such as transistors, the basic building blocks of modern chips, with an order of magnitude smaller, reaching a “almost unimaginable” degree, according to John Petersen, scientific director of lithography at Imec, a research and innovation center for the semiconductor industry.

The beam Lace will use to manufacture chips is about the width of a single hydrogen atom, or 0.1 nanometer. ASML lithography tools use a light beam of about 13.5 nanometers; for comparison, a human hair is about 100,000 nanometers wide.

Smaller transistors and components would allow manufacturers to increase the performance of AI processors well beyond current capabilities. Lace’s technology would enable foundries to print wafers with what ultimately amounts to an “atomic resolution,” Bodil Holst added.

The Series A round of the Bergen-based company was led by Atomico, with participation from M12 (Microsoft’s venture capital arm), Linse Capital, the Spanish Company for Technological Transformation, and Nysenç.

Lace, which declined to comment on its overall valuation, has already developed prototypes and aims to install a testing tool in a chip manufacturing pilot plant, or “fab,” by around 2029. The company presented its results in a research article at a lithography scientific summit in February.