(Bloomberg) -- Germany’s Black Semiconductor has raised €254 million ($273 million) in funding as it looks to develop chip technology based on the carbon material graphene.

Founded in 2020 by entrepreneurs and brothers Daniel and Sebastian Schall, Black Semiconductor will receive €229 million in public grants from the German Ministry of Economic Affairs and the German state of North Rhine-Westphalia, the company said on Wednesday.


An additional €26 million in equity will come from a cluster of venture capital investors including Porsche Ventures and Project A Ventures, Scania Growth, Capnamic and TechVision Fonds. Black Semiconductor is planning to raise another €74 million from investors from 2026, co-founder and Chief Executive Officer Daniel Schall told Bloomberg News.

Graphene, an ultra-thin material measuring one-atom thick, was discovered by physicists Andre Geim and Kostya Novoselov at the University of Manchester in 2004. Researchers see immense promise in its strength, reliability and conductivity, and say it could be used in flexible smartphones or even flexible batteries.

But the move from lab to commercialization has been slow in the decades since its discovery, partly because of the difficulties in scaling up production - something Black Semiconductor will grapple with. UK-based Paragraf Ltd., backed by the US Central Intelligence Agency’s venture capital fund, likewise sees potential in taking graphene-based devices mainstream.

Black Semiconductor says it is developing a way to build networks of chips using graphene, which could speed up communication between semiconductors, boost energy efficiency and lower manufacturing costs. The system also relies on using light rather than electricity to transmit data more quickly. “In a test environment, that works better than other materials,” Daniel Schall said. “Now, we want to prove that it will do so in a mass production setup.”

The startup plans for its microchip technology to reach mass production by 2031. The company will use the funds to accelerate its research and development initiatives and establish pilot line manufacturing capabilities in Aachen, Germany, by 2026. It also aims to increase its headcount to 120 by 2026 from 30 currently.

The company’s first customer is Spain’s Semidynamics, which plans to combine Black Semiconductor’s technology with that of another of its suppliers, Global Foundries, for a chip to be used for artificial intelligence applications and memory purposes.