Substrate emerges from stealth to take on ASML and TSMC

Substrate, a secretive U.S. startup, said it has developed a particle-accelerator-based chipmaking tool that it claims can rival ASML's advanced lithography equipment. With backing from high-profile investors, Substrate aims to disrupt the semiconductor industry by drastically reducing manufacturing costs and restoring American leadership in chip production. The company's novel approach, combining custom lithography machines with a proprietary particle accelerator, could have far-reaching implications for the semiconductor supply chain.

Founded in January 2022 and based in San Francisco, Substrate is aiming to become a major player in the semiconductor industry. The company aims to rival both ASML, which holds a monopoly in advanced lithography equipment, and TSMC, the world's leading chip manufacturer. The startup has attracted $100 million in investment from Central Intelligence Agency-backed nonprofit firm In-Q-Tel, General Catalyst, Allen & Co., Long Journey Ventures, and Valor Equity Partners.

How does Substrate technology work?

Substrate's approach involves a new chipmaking machine leveraging particle acceleration for lithography, the critical process of etching circuitry onto silicon wafers. According to Substrate, its technology can produce chip features at resolutions comparable to those of ASML's tools, some of which cost over $400 million. Demonstrations of Substrate's tool have already been held at U.S. National Laboratories and at its San Francisco facilities.

Substrate's technology uses a particle accelerator to channel light through a car-sized tool, enabling the printing of high-resolution microchip layers. This method uses a 'new form of advanced X-ray lithography'. In early 2024, Substrate overcame vibration issues by adjusting the air-conditioning system, successfully printing 'very beautiful and tiny things repeatedly' on a silicon wafer. James Proud, Substrate's 34-year-old founder, met with Vice President JD Vance in March 2025 to explain how their alternative manufacturing process could potentially cut semiconductor costs in half.

Restoring American semiconductor leadership

Substrate's primary goal is to drastically reduce chipmaking costs. The company envisions cutting the cost of leading-edge wafers from an estimated $100,000 to below $10,000 by the end of the decade through its vertically integrated model. This combines the development of lithography equipment and chip production. CEO James Proud emphasizes that Substrate's mission is to restore American leadership in semiconductor manufacturing and reduce reliance on foreign suppliers.

Substrate plans to use a single particle accelerator to power multiple tools simultaneously, which could reduce costs but also raises concerns about potential downtime. The company, valued at over $1 billion, has discussed building a $10 billion particle accelerator and plant on Texas A&M University's campus and has also had preliminary talks with Intel. Analysts say that if the company succeeds in lowering chip manufacturing costs, it could transform the whole industry.