US startup Substrate unveils X-ray lithography to rival ASML — eyes TSMC next

ASML’s extreme ultraviolet (EUV) lithography tools have long been essential to advanced chip manufacturing, with foundries such as TSMC, Samsung, and Intel investing heavily to acquire them.

Now, a U.S. startup is looking to challenge the Dutch company’s dominance — and ultimately,\ seek to replace TSMC’s role in advanced chip production by boosting U.S. manufacturing capacity. According to Reuters, Substrate, a San Francisco–based firm, has developed a chipmaking system it claims can rival ASML’s most advanced lithography machines.

As Bloomberg indicates, ASML’s EUV machines generate a type of light that enables the etching of features on today’s most advanced chips. Substrate is taking a different approach. According to Bloomberg, the company’s system uses a particle accelerator to generate light from shorter-wavelength X-rays, a method it claims can produce even narrower and more precise beams.

Substrate’s system, demonstrated at U.S. national laboratories, is said to be capable of producing chips at the 2nm process, according to the startup’s founder and CEO James Proud, as cited by Financial Times. Proud claims that his approach could cut the cost of manufacturing a leading-edge wafer from about $100,000 to roughly $10,000 by the end of this decade, the report adds.

Substrate sets sights on TSMC
Notably, Substrate’s ultimate goal is not just to replace ASML, but to challenge TSMC, the world’s largest foundry. According to Reuters, Proud said the company’s tool marks the first step in building a U.S.-based contract chipmaking business capable of competing with TSMC in advanced AI chip production.

As The Wall Street Journal notes, the company plans to build a network of its own fabs equipped with its lithography machines, aiming to begin large-scale chip production by 2028.

Steep technical hurdles ahead
Despite the startup’s ambitious plans, industry experts caution that achieving such precision is a feat that typically takes a decade to master — and it represents only one link in a long chain of technical challenges.

The Wall Street Journal notes that advanced semiconductor production also requires maintaining that same level of accuracy across much larger wafer areas while operating at high speeds. Chinese firms, the report adds, have spent years trying to overcome similar obstacles.

Meanwhile, Bloomberg notes that the company has attracted notable backers. Peter Thiel’s Founders Fund joined early investors including General Catalyst and Valor Equity Partners. Bloomberg also adds the company claims that Commerce Secretary Howard Lutnick has met with Substrate’s founder several times.

Source: TrendForce, Taiwan.