Microsoft-backed Lace Lithography raises $40M to create chip designs 10 times smaller

Microsoft-Backed Startup Secures $40M to Transform Semiconductor Manufacturing

Lace Lithography, a Norwegian startup backed by Microsoft, announced it has raised $40 million in Series A funding to advance its groundbreaking helium atom beam lithography technology 1

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. The round was led by Atomico, with additional investments from M12, Microsoft's venture arm, along with Linse Capital, the Spanish Society for Technological Transformation, and Nysnø 3

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. Founded in 2023 by CEO Bodil Holst and Adrià Salvador Palau, the company is headquartered in Bergen, Norway, with a second location in Barcelona, Spain.

Novel Lithography System Challenges ASML's Dominance

Traditionally, manufacturers like Intel and Taiwan Semiconductor Manufacturing Company use light-based lithography systems made by Dutch company ASML to create the complex circuits that form the foundation of artificial intelligence chips 2

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. ASML currently dominates the market for advanced chipmaking equipment as manufacturers race to shrink chip components and squeeze more features into limited silicon areas. However, Lace Lithography has developed an entirely different approach that could reshape the semiconductor landscape. Instead of using light, the company's engineers created a novel lithography system that utilizes a helium atom beam to etch circuits onto silicon wafers 1

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Chip Designs 10 Times Smaller Than Current Capabilities

The breakthrough technology enables chip designs 10 times smaller than what is currently possible, according to Bodil Holst 3

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. The beam Lace will use to make chips is about the width of a single hydrogen atom, or 0.1 nanometer, compared to ASML's lithography tools that use a beam of light measuring approximately 13.5 nanometers 3

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. For context, a human hair is about 100,000 nanometers wide. John Petersen, Scientific Director of Lithography at Imec, a research and innovation hub for the chip industry, explained that the main advantage of the helium atom beam is the ability to create features such as transistors to an "almost unimaginable" degree of miniaturization 3

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Atomic Resolution Could Unlock Next-Generation AI Processors

Holst stated that Lace's advancements could allow chipmakers to print silicon wafers at what she described as "ultimately atomic resolution" 1

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. This capability would give manufacturers the ability to ramp up the performance of AI processors well beyond current capabilities when manufacturing advanced chips. "Our technology is a way that can potentially expand the roadmap and be an enabler for doing things that would not have been possible otherwise," Holst told Reuters 3

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. Smaller transistors and other features created through systems integration would directly impact the computing horsepower achievable on limited silicon areas, crucial for the development of next-generation artificial intelligence chips.

Timeline Points to 2029 for Pilot Chip Fabrication Plant

Lace Lithography has already developed prototype systems and presented its findings in an invited research paper at a scientific lithography summit in February 3

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. The company aims to have a test tool operational in a pilot chip fabrication plant by approximately 2029 1

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. While the company declined to comment on its overall valuation, the $40m funding represents significant investor confidence in a field that has drawn fresh interest from investors and governments as a new round of startups emerges, some aiming to compete directly with established players in photonics packaging and semiconductor manufacturing 3

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