Lace Lithography lands $40M to rethink chip manufacturing
Chipmaking startup Lace Lithography has raised a $40 million funding round backed by leading investors Atomico and M12, the venture fund of Microsoft. The company is developing a radically different approach to semiconductor production that aims to replace light with atoms in the most critical step of making advanced chips.
From optical to atomic: a new path for lithography
Modern semiconductors are produced using optical lithography, where patterns are projected onto silicon wafers with highly sophisticated light sources and lenses. This process, dominated by extreme ultraviolet (EUV) systems, is reaching physical and economic limits as chipmakers push towards ever-smaller transistor nodes.
Lace Lithography is pursuing an alternative: using beams of carefully controlled atoms instead of photons to define chip patterns. By steering and depositing atoms directly, the company aims to achieve higher resolution, greater patterning precision and potentially lower capital expenditure than today’s multi-billion-dollar EUV machines.
Strategic backing from deep-tech investors
The round, led by Atomico with participation from M12 and other deep-tech backers, underscores growing investor appetite for foundational semiconductor manufacturing innovation. Both funds have a track record of supporting companies that tackle core hardware and infrastructure bottlenecks rather than incremental software-only plays.
With the new capital, Lace Lithography plans to accelerate R&D, expand its engineering team and move from laboratory-scale demonstrations toward pilot-ready tools that can be evaluated by leading foundries and IDMs. Industry observers note that if the company can prove throughput and reliability at scale, atomic lithography could complement or eventually challenge incumbent EUV lithography in certain high-value process steps.
Implications for the global chip race
The race to secure advanced semiconductor capacity has become a central issue for national security, AI infrastructure and the broader technology supply chain. Novel patterning technologies such as those pursued by Lace Lithography could help diversify tooling options, reduce dependence on a handful of equipment suppliers and open new pathways for chip scaling beyond the limits of traditional optics.