Target Company Overview

mi2-factory GmbH is a high-tech startup specializing in semiconductor equipment, founded in 2016 as a spin-off from the Ernst Abbe University of Applied Sciences in Jena. The company has developed a proprietary wafer processing technology known as EFIITRON, which aims to revolutionize silicon carbide (SiC) chip production. With a focus on reducing production costs, enhancing reliability, and enabling new component and wafer architectures, mi2-factory caters to major semiconductor manufacturers across Europe, Japan, and the United States. The company holds 16 patent families, with a total of 30 patents granted in Germany, the USA, Europe, Japan, and China.

Industry Overview in Germany

The semiconductor industry is a critical sector in Germany, recognized for its advanced technological landscape and infrastructure. As one of the leading global markets in semiconductor manufacturing, Germany hosts numerous key players involved in chip production, research, and development. In recent years, the industry has been bolstered by increasing demand for high-performance chips, driven by emerging applications in electric mobility, renewable energy, and artificial intelligence.

Germany's semiconductor market is expected to experience substantial growth, with forecasts indicating a market volume exceeding $6 billion by 2027, bolstered by a compound annual growth rate (CAGR) of 30-40%. This growth is fueled by innovation and the continuous evolution of manufacturing technologies, particularly in areas such as SiC power electronics, which are pivotal for the transition to electric vehicles and sustainable energy solutions.

Moreover, the country benefits from significant public funding and support for advanced technology initiatives, which is instrumental for companies like mi2-factory in achieving industrial maturity and commercial success. The introduction of programs such as IPCEI ME/CT reflects Germany's commitment to sustaining leadership in the semiconductor sector and fostering cutting-edge research and development.

Rationale Behind the Deal

The recent Series A funding round of €15 million secured by mi2-factory GmbH, along with a commitment of up to €23 million from government sources under the ICPEI ME/CT program, serves to accelerate the commercialization of their EFIITRON technology. The strategic alliance with major investors, including Ion Beam Applications S.A. (IBA), Wallonie Entreprendre International, and bm|t, is expected to enhance mi2-factory's technical capabilities and facilitate the transition of their lab-scale innovations to industrial applications.

This investment will allow mi2-factory to achieve industrial maturity for its patented technology and demonstrate its first industrial deployment, offering semiconductor manufacturers the unprecedented precision and flexibility in deep doping of SiC. This process aims to reduce costs by up to 30%, supporting the growing demand for efficient semiconductor solutions in various sectors.

Investor Information

The funding round sees participation from notable investors, including IBA, a leading provider of particle accelerator technology, and Wallonie Entreprendre International, the international division of the Walloon public investment company. IBA brings extensive expertise in compact particle accelerator technologies, playing a crucial role in the development and industrialization of the EFIITRON technology as a European high-tech process technology. With over 2,000 employees worldwide, IBA is also recognized for its advancements in proton therapy and industrial sterilization.

Bm|t, a management company based in Erfurt, specializes in providing funding for innovative and growth-oriented companies in Thuringia, managing a portfolio of 12 investment funds amounting to €445 million. Bm|t’s involvement indicates strong support from regional financial institutions for groundbreaking technologies like those developed by mi2-factory.

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This investment in mi2-factory GmbH represents a strategic move for both the company and its investors, given the rapidly growing demand for SiC technologies in various high-demand applications. The partnership with IBA not only provides technical expertise but also enhances the commercial viability of mi2-factory’s innovations. Expanding into the SiC chip market, where rising precision requirements and cost-efficiency are paramount, could significantly enhance the company’s market position.

Furthermore, the backing from public funding, such as the substantial support being provided through the IPCEI ME/CT program, reduces the financial risks associated with scaling up operations. This public-private synergy creates a strong foundation for mi2-factory to gain traction in a competitive semiconductor landscape.

Overall, with the anticipated growth in the SiC market, this deal appears to be a promising investment opportunity, bringing together pioneering technology, a strong investor consortium, and supportive governmental policies. By capitalizing on the increasing adoption of SiC components in the energy transition, mi2-factory is well-positioned for long-term success.

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