German AI startup Black Semiconductor raises $274M in funding to launch next-generation chips based on graphene

Germany’s AI startup Black Semiconductor has raised €254 million ($273 million) in funding to develop next-generation chip technology using a carbon material called graphene, the company announced on Wednesday.

The funding includes €229 million in public grants from the German government and the State of North-Rhine-Westphalia, highlighting Europe’s commitment to staying competitive with the U.S., which has funneled billions into domestic chip manufacturing.

In addition to public grants, Black Semiconductor secured €25.7 million in equity funding led by Porsche Ventures and Project A Ventures, with contributions from Scania Growth Capital, Capnamic, Tech Vision Fonds, and NRW.BANK. Previous investors such as Vsquared Ventures, Cambium Capital, and Hermann Hauser’s Onsight Ventures also participated.

With this capital influx, Black Semiconductor aims to pioneer the mass production of semiconductors based on graphene, marking a pivotal advancement in Europe’s semiconductor value chain and bolstering the continent’s technological sovereignty. The funding will support product development, graphene production within Europe, and the creation of new high-tech jobs in Aachen, Germany.

The company plans to utilize the funds to establish a pilot production facility in Aachen, targeting mass production by 2031. Additionally, Black Semiconductor intends to expand its workforce from 30 to 120 employees by 2026.

Founded in 2020 by entrepreneurial brothers Daniel and Sebastian Schall, Black Semiconductor aims to revolutionize the chip industry by addressing connectivity barriers and significantly enhancing computing power and efficiency through advanced chip networks.

Traditionally, chips within a device or data center need to communicate with each other. Black Semiconductor’s innovative approach leverages graphene to interconnect multiple chips, utilizing light instead of electricity to transmit data. This method promises to enhance both efficiency and speed.

“We highly value the strong support of the government and renowned investors to jointly advance the development of novel technologies in Europe. The investment enables us to drive our product development and 300 mm wafer pilot production facility forward at full speed. As traditional chip technology moves closer to its technological and economic limits, our innovation paves the way for faster, more powerful, cost-efficient, and energy-efficient computation,” Dr. Daniel Schall, co-founder and CEO of Black Semiconductor, said.

Schall added, “As part of the IPCEI program, we are committed to contributing to the semiconductor value chain in Europe. We believe that this investment, coupled with Europe’s ambitious push to increase funding for deep tech companies, will inspire even greater
participation from startups and industry players.”

Graphene, known for its lightweight, strength, and excellent conductivity, is at the core of this technological leap. “We are ahead of the game,” noted Daniel Schall, CEO of Black Semiconductor, emphasizing the strategic investment from the German government.

While Europe hosts key semiconductor players like ASML in the Netherlands, it has historically lagged in chip manufacturing. The industry is predominantly dominated by Asian giants such as Taiwan’s TSMC and South Korea’s Samsung.

“Germany and the broader European Union recognize the importance of having a strategic presence in the semiconductor industry. Sovereignty doesn’t mean replicating everything in Europe, but contributing something unique to the global table,” Schall explained on CNBC’s “Squawk Box Europe.”

He further highlighted Europe’s strengths in the semiconductor supply chain, particularly in design capabilities, positioning the continent to play a crucial role in the global semiconductor landscape.