Chip start-up pushes into Taiwan in quest for ever-smaller chips

NanoWired is a start-up by any measure. Spun off from Technical University of Darmstadt in 2017, the German company has a mere 22 employees and just a handful of customers.

But chief executive Olav Birlem believes his technology can revolutionise chip production, and has set his sights on selling to the behemoth of the industry, Taiwan Semiconductor Manufacturing Company. TSMC works with more than 700 suppliers already, many of them multinationals.

Birlem’s company has commercialised a technology for growing tiny metal hairs on surfaces and using them to tightly connect two objects — a solution that can be used to package chips together.

The demand for ever-larger computing power requires semiconductor makers to continuously squeeze more transistors on each chip and more chips into one device and pack them more closely together.

NanoWired may be small but new connection technologies such as that offered by the company can help solve the industry’s big problems in the quest to develop ever-smaller chips, such as short circuits and voltage drop in connections.

From an office in Taipei that opened two weeks ago, NanoWired is now trying to market this to TSMC and the many other companies involved in making semiconductors in Taiwan.

“Taiwan is the heart of everything that is microcontrollers, therefore we had to come here,” Birlem said.

His ambitious pitch testifies to just how crucial TSMC, and in extension Taiwan, has become for the global chip industry. With revenues forecast to hit $75bn this year, the company accounts for more than half of the market for made-to-order chips.

Mainly thanks to TSMC, more than 90 per cent of the world’s most advanced semiconductors are manufactured in Taiwan.

Until now, NanoWired has worked with chipmakers and their customers in the automotive supply chain — a sector where Europe is strong. It has won German chipmaker Infineon and auto supplier Continental as customers and has also started working with Japanese car company Honda and its semiconductor supplier Murata.

But automotive applications account for little more than 10 per cent of global semiconductor industry revenues, forecast to hit $639bn this year. It is the rest of the pie Birlem is aiming for.

There are potential customers for NanoWired everywhere in Taiwan, from GlobalWafers, the world’s third-largest supplier of silicon wafers, to Advanced Semiconductor Engineering, the world’s largest chip packaging and testing company, to Foxconn, the world’s largest contract electronics manufacturer.

But Birlem is finding that TSMC is extremely hard to conquer, highlighting just how much market power the leading contract chipmaker has amassed.

“We are not at the level yet that TSMC would agree to put our machines there even just for testing,” he said.

“If you are as relevant in the ecosystem as TSMC is, you can afford to be picky,” Birlem added. “Therefore they have extremely high expectations.”