Semiconductor manufacturing gear startup Nearfield Instruments B.V. said today it has closed on €135 million ($147.6 million) in new funding to accelerate the growth of its novel process control systems for the chipmaking industry.

Today’s Series C round was led by the U.S. venture capital firm Walden Catalyst and Singapore-based Temasek. M&G Investment, Innovation Industries, Invest-NL and ING also participated in the round.

The startup has developed metrology and inspection or M&I systems that help chipmakers to assess the quality of the chips they’re manufacturing. They’re used to measure and inspect the silicon wafers that computer chips are printed onto, to ensure they meet the highest quality standards, and the company says they can do so more effectively than traditional techniques.

It argues that conventional quality control techniques in the chipmaking industry have reached their limits, creating bottlenecks in the chip manufacturing supply chain. By using its Quadra 3D metrology system, the company says, chipmakers can increase their production yields when using more advanced manufacturing processes to build powerful chips for artificial intelligence workloads.

The Quadra 3D metrology system is said to provide non-destructive, high-throughput and high-resolution metrology capabilities.

In an interview with Reuters, Nearfield Chief Executive Hamed Sadeghian explained that metrology is a technique that’s used to measure the quality of chips after each step in the manufacturing process. It’s necessary to “make sure it meets the intended standards, to avoid the loss of good chips,” he said.

It’s rare to see startups make such a big breakthrough in the semiconductor industry, as computer chip equipment manufacturing is dominated by a handful of companies, such as Applied Materials Inc. in the U.S. and ASML N.V. in the Netherlands. Those companies enjoy near-monopolies in various aspects of the chip manufacturing equipment market.

For instance, AMSL is the world’s only manufacturer of extreme ultraviolet lithography devices, which use light beams to carve transistors into silicon wafers. Its EUV machines are essential for the manufacturer of the most advanced computer chips in the world today.

The development of chipmaking equipment can cost billions of dollars, which presents an almost insurmountable barrier to entry for startups. As such, Nearfield, which was founded in 2016, is an extremely rare exception, trying to carve out a niche for itself in a key part of the lucrative market for chipmaking hardware.

It has done well so far, claiming to have engaged Samsung Electronics Co. Ltd., the world’s biggest supplier of dynamic random-access memory chips, as a customer. It’s also holding talks with other chip manufacturers, the company said. Those are likely to be Intel Corp. and Taiwan Semiconductor Manufacturing Co., which are the only other chipmakers in the world that employ cutting-edge chipmaking techniques.

Walden Catalyst Founding Managing Partner Young Sohn said he believes advanced semiconductors are key pillars of global innovation and growth, and the next generation of chips will be “driven by Advanced Lithography and 3D Integration, with smaller features, deeper trenches and tighter tolerances.”

As such, he added, there’s a growing need for “new process control tools to enable higher yield and throughput, and Nearfield’s metrology solutions are critical for solving these process control challenges.”

Sadeghian said today’s round comes shortly after the company’s Quadra 3D system was integrated into the “first manor high-volume semiconductor manufacturing lab.” He added that the funding will help to ensure Nearfield is positioned to meet the growing demand for metrology and inspection technologies. “This funding will enable us to ramp up production capacity, expand our product portfolio,” he said.

The round is believed to be the second-largest capital raise in the semiconductor industry’s fabrication equipment market in the last five years, Nearfield said.

Photo: Nearfield Instruments