Substrate, a small San Francisco startup is making waves in the global semiconductor industry, a business widely believed too complex to break into. With its proprietary technology, Substrate emerges as a potential rival to Dutch company ASML, the current sole global manufacturer of the lithography equipment which produces microchips.
According to the New York Times, ASML uses a massive machine to create semiconductors for the chips essential to smartphones and AI systems. Founder James Proud, 34, says Substrate’s solution cuts the cost in half, using a proprietary particle accelerator to funnel light through a more compact lithography machine.
With over $100 million in funding, backed by firms including Peter Thiel’s Founders Fund and General Catalyst, the company is valued at over $1 billion, according to the Wall Street Journal. But industry experts say ASML has a 10-year head start navigating the overwhelming expenses and technical challenges involved in building advanced microchips.
Fundamentally altering chip production is the one of the biggest challenges in tech, which is why few have tried. While Proud has yet to navigate the obstacle-ridden road to commercialization, it seems he’s emerged in an opportune moment: a time when the Trump administration has expressed keen interest in reducing reliance on foreign manufacturers.
Vice President JD Vance met with Proud to discuss the innovations in March. According to the New York Times, Vance declined to comment for their recent story on Substrate.
Proud doesn’t have roots in the lithography industry, which he says actually drove his ambition. He says if he had prior experience, “I probably wouldn’t believe it’s possible because I’d probably know too much about how hard it’s going to be, and it was and it has been immensely hard.”
The company says it aims to produce its first chips by 2028, at which point it plans to have built its own ecosystem of chip manufacturers.
Ava Levinson
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