Lace Lithography Raises $40M to Reinvent Chipmaking

Lace Lithography Bags $40M Series A to Replace Light with Atoms in Semiconductor Manufacturing

The global semiconductor industry stands at a critical inflection point. For decades, chipmakers across the world have relied on a process known as photolithography — essentially using beams of light to etch intricate circuit patterns onto silicon wafers. While this method has served the industry remarkably well and enabled the relentless miniaturisation of electronics that defined the modern era of computing, the technology is now bumping hard against the boundaries of physics. The wavelength of light itself has become a constraint, and as circuit patterns grow ever smaller and more complex, traditional lithography tools are running out of runway. That fundamental bottleneck is precisely what Norway-based deep tech startup Lace Lithography has set out to solve — and it has just secured the capital to push that mission forward at speed.

In a significant piece of AI funding news that signals growing institutional confidence in next-generation semiconductor technology, Lace Lithography has raised $40 million in a Series A funding round. The round was co-led by prominent European venture firm Atomico and M12, Microsoft's corporate venture arm. Additional participants in the round include Linse Capital, SETT, and Nysnø, alongside existing backers such as Vsquared Ventures, Future Ventures, and Runa Capital. With this latest capital injection, the company's total funding since its founding two years ago now exceeds $60 million — an impressive milestone for a startup still in the relatively early stages of commercialising a deeply technical platform.

At The AI World Organisation, we closely track developments at the intersection of AI funding and transformative hardware innovation. Lace Lithography's funding round is a compelling reminder that the next wave of artificial intelligence breakthroughs will not happen in software alone — they will depend fundamentally on the availability of more powerful, energy-efficient, and precisely manufactured chips.

Why Photolithography Is Running Out of Road

To truly appreciate what Lace Lithography is building, it helps to understand the problem at the heart of modern semiconductor manufacturing. Photolithography, the dominant chip-patterning technology since the 1960s, works by shining light through a patterned mask onto a silicon wafer coated with a light-sensitive material. Where the light lands, the material changes chemically, allowing engineers to etch out the incredibly fine structures that make up transistors and other chip components. Over the decades, chipmakers have pushed this technique to remarkable extremes — shifting from visible light to ultraviolet (UV) and then to extreme ultraviolet (EUV) wavelengths to achieve ever-finer resolutions. Companies like ASML have invested billions of dollars developing EUV lithography machines that stand among the most complex pieces of equipment ever built.

Yet even with all this sophistication, the physics of light imposes hard limits. When the wavelength of the light used approaches the size of the features you are trying to print, diffraction effects cause patterns to blur and distort. Engineers have developed clever workarounds — multiple patterning, phase-shift masks, computational lithography — but each additional workaround adds cost, time, and complexity to an already extraordinarily complicated manufacturing process. The result is that the cost of building and operating a leading-edge semiconductor fab has ballooned into the tens of billions of dollars, and the ability to shrink transistors further is becoming more difficult and expensive with every new generation. The industry is not standing still, but it is clear that entirely new approaches will be needed to sustain the pace of progress that AI, quantum computing, and photonics now demand. This is precisely the context in which AI funding flowing into deep tech semiconductor startups like Lace Lithography carries such significance.

Atoms Instead of Light: The Science Behind Lace Lithography

Lace Lithography's answer to this challenge is as elegant as it is technically ambitious. Rather than using photons — particles of light — to pattern semiconductor surfaces, the company is developing a system that uses tightly controlled beams of neutral helium atoms. This approach, drawing on principles from atomic physics, offers a potential pathway to resolutions that light-based methods simply cannot achieve, because atoms can be focused to far smaller spot sizes than photons at comparable energies. The idea of using atom beams for lithography is not entirely new in academic circles, but translating it from a laboratory curiosity into a manufacturable, commercially viable technology has historically been extremely difficult. Lace Lithography's founding team believes they have found a way to make it work at scale.

The company was co-founded by Bodil Holst and Adrià Salvador Palau, bringing together complementary expertise in atomic physics, engineering, and AI systems. Holst, a physicist with deep experience in atom optics and surface science, has spent years working on the fundamental science of atom beam manipulation. Salvador Palau brings a background in engineering and AI that is directly relevant to Lace Lithography's broader technology stack. Together, they have assembled a team capable of tackling both the fundamental physics challenges and the engineering realities of integrating a novel lithography platform into existing semiconductor manufacturing workflows.

One of the key differentiating design principles behind Lace Lithography's technology is its emphasis on compatibility with current manufacturing infrastructure. The semiconductor industry is not going to rip out and replace its existing fabs overnight; any new lithography technology that hopes to achieve widespread adoption needs to slot into existing processes without requiring chipmakers to rebuild their entire production lines from scratch. Lace Lithography has explicitly designed its system with this constraint in mind, aiming to complement rather than replace existing tools. This pragmatic approach to technology development — balancing innovation with industrial reality — is a hallmark of deep tech companies that have successfully made the transition from the lab to the factory floor.

AI at the Core: Solving the Mask Design Challenge

While the atom beam patterning technology is the headline innovation, Lace Lithography's work goes deeper than hardware alone. One of the most computationally demanding challenges in advanced semiconductor manufacturing is the design of the photomasks — the templates through which light (or, in this case, atom beams) are directed to create circuit patterns on a wafer. As chip features have shrunk, mask design has become extraordinarily complex. The patterns printed on a chip can be so small and so densely packed that optical proximity effects and other physical phenomena cause the final printed shapes to deviate from the intended design. Engineers have developed a discipline known as optical proximity correction (OPC) to compensate for these effects, but at leading-edge nodes, the computational burden of generating corrected masks can be immense — sometimes taking days of supercomputing time for a single chip layer.

Lace Lithography is actively applying artificial intelligence to tackle this mask design bottleneck. By training AI models to understand the relationship between intended chip designs and the physical behaviour of atom beams during patterning, the company aims to dramatically accelerate and improve the mask correction process. This integration of AI into the lithography workflow is not incidental — it is a core part of the company's value proposition. In the current landscape of AI funding news, this kind of deep integration of AI into critical hardware manufacturing processes is exactly the sort of application that sophisticated investors find compelling, because it speaks to both the technical ambition and the practical utility of the technology.

The ability to use AI to predict and correct for complex physical effects in lithography could reduce the time and cost required to bring new chip designs into production. For chipmakers working on AI accelerators, quantum computing hardware, or advanced photonic integrated circuits, faster and cheaper lithography could translate directly into faster time to market and lower production costs. The virtuous cycle here is striking — AI tools helping to design better chips, which in turn power more capable AI systems, which can then be applied to even more sophisticated chip design challenges.

A Broader Vision: Enabling AI, Quantum, and Photonics

The timing of this AI funding round is no accident. The global demand for advanced semiconductor chips has never been higher, driven almost entirely by the explosive growth of artificial intelligence. Training large language models, running inference workloads at scale, and building out the infrastructure for AI-powered applications all require enormous quantities of highly capable chips — and the ability to produce those chips at the feature sizes needed for next-generation performance is directly constrained by the quality of the lithography tools available.

Beyond AI, Lace Lithography's technology targets two other domains that are increasingly seen as critical to the future of computing: quantum computing and photonics. Quantum computing hardware, including superconducting qubits and trapped ion systems, demands chip manufacturing capabilities that go beyond what is currently achievable with standard CMOS fabrication. Photonic integrated circuits, which use light to transmit and process information at high speeds and low energy, similarly require extremely precise and fine-scale patterning. The ability to manufacture these devices at scale and with high yield depends in large part on advances in lithography. By positioning itself as an enabling technology for all three of these domains, Lace Lithography is addressing a set of problems that sit at the intersection of some of the most important technology trends of our time.

Investors in the deep tech and semiconductor space are increasingly aware of this dynamic, and the participation of both a leading European venture firm and a major corporate venture fund backed by one of the world's largest technology companies speaks to the serious attention that Lace Lithography's approach is attracting. The AI funding that has poured into software startups over the past several years is now beginning to flow more deliberately toward the hardware layer — the picks and shovels of the AI era — and lithography technology sits squarely in this category.

What This Means for the Future of Chipmaking

Lace Lithography's $40 million Series A is not just a financing event for a single company — it is a signal about where the semiconductor industry's innovation frontier is heading. The dominant narrative in chip technology for the past decade has been about software-defined improvements, design innovations, and packaging advances as substitutes for further node scaling. But the underlying appetite for smaller, denser, more power-efficient chips has not gone away; if anything, AI workloads have intensified it. What Lace Lithography is attempting is genuinely difficult and genuinely important: developing a fundamentally new approach to chip patterning that could extend the performance trajectory of semiconductors beyond the limits of light.

With more than $60 million in total capital raised over just two years, a founding team that combines deep scientific expertise with practical engineering know-how, and a clear strategy for integrating with existing manufacturing infrastructure, the company is well-positioned to make meaningful progress. The road from Series A to commercial deployment in semiconductor fabs is long and technically demanding, but the backing of investors with deep networks in both the European deep tech ecosystem and the global technology industry provides Lace Lithography with the resources and connections it needs to navigate that journey.

At The AI World Organisation — a global apex body bringing together over 5,000 AI leaders, researchers, and policymakers across events in APAC, Europe, and the Americas — we recognise that breakthroughs in semiconductor manufacturing are foundational to the future of AI itself. The AI funding landscape in 2026 increasingly reflects a mature understanding among investors that sustainable AI progress requires investment not just in models and applications, but in the physical infrastructure that makes advanced AI possible. Lace Lithography's Series A is a powerful example of that investment thesis in action, and its progress will be watched closely by everyone who cares about the long-term trajectory of artificial intelligence and advanced computing.