Substrate closed a $100 million Series A funding round in October 2025 at a valuation exceeding $1 billion, making it a unicorn company before generating any revenue.

The round was backed by investors including In-Q-Tel, General Catalyst, Founders Fund, Valor Equity Partners, Allen & Co, and Long Journey Ventures. In-Q-Tel is the CIA's venture capital arm.

The $100 million raise is for the development of advanced lithography equipment and the buildout of manufacturing capabilities.

Substrate has developed an X-ray lithography system that replaces traditional light sources with a compact particle accelerator to pattern semiconductors at the 2-nanometer node and below.

The system works by accelerating electrons to near light-speed through RF cavities that fit inside a semiconductor fab, spanning tens of meters rather than the kilometers required by traditional synchrotrons. These high-energy electrons pass through alternating magnets called undulators, causing them to emit X-ray pulses with brightness on the order of billions of times that of the sun, per the company.

Custom X-ray mirrors and filters shape this beam and direct it into a sealed projection head. A high-speed wafer stage spins 300mm wafers under high G-forces, allowing exposure times of milliseconds per die and throughput competitive with current EUV scanners, per the company.

The shorter X-ray wavelength enables higher resolution than EUV lithography, with demonstrated critical dimensions of 12 nanometers and via pitches of 30 nanometers. Per Substrate, this matches 2-nanometer logic node requirements and offers greater depth of focus than current EUV systems.

Fab engineers interact with the system through a familiar dashboard interface similar to existing EUV scanners, loading patterns and mounting reticles before initiating automated calibration and exposure sequences. The continuous X-ray source requires fewer consumables than plasma-based EUV systems, which the company says reduces operational complexity and maintenance requirements.

Substrate is a vertically integrated semiconductor equipment manufacturer, developing both lithography hardware and the specialized chemistry and processes required for X-ray patterning.

Go-to-market is B2B, targeting advanced semiconductor manufacturers, defense contractors, and later foundries seeking alternatives to ASML's EUV monopoly. Initial customers will likely include US national laboratories and defense-focused fabs before expanding to commercial chip manufacturers.

Revenue will come primarily from equipment sales, with systems priced significantly below ASML's $400 million High-NA EUV scanners while targeting comparable or superior patterning capabilities. Service contracts and consumables will provide recurring revenue streams, though the continuous X-ray source design reduces ongoing consumable requirements compared to plasma-based EUV systems.

The model relies on vertical integration across the entire patterning stack, from the particle accelerator light source through specialized X-ray optics to proprietary resist chemistry and process recipes. This integration enables system-level optimization for performance and cost while reducing dependence on external suppliers.

Domestic manufacturing addresses geopolitical concerns around semiconductor equipment supply chains, potentially commanding premium pricing from US government and defense customers seeking supply chain security.

ASML has over 95% market share in EUV systems, with gross margins exceeding 95% on service parts. The Dutch company has shipped over 210 low-NA EUV systems and begun deliveries of its first High-NA EUV scanners to Intel and other leading-edge manufacturers.

ASML's position includes deep process integration with every major foundry and decades of accumulated intellectual property. The company's systems draw over 1 megawatt while outputting less than 400 watts of useful EUV light, creating cost and efficiency vulnerabilities.

Nikon remains focused on older DUV immersion lithography and lacks a working EUV prototype, making it primarily an indirect competitor in mature node production.

Intel has assembled the first commercial High-NA EUV scanner for its 14A process node and is co-optimizing electronic design automation and stitching techniques to internalize advanced patterning capabilities. This vertical integration strategy could reduce Intel's incentive to adopt third-party alternatives like Substrate's technology.

Other major chip manufacturers are exploring similar vertical integration approaches to reduce dependence on ASML's expensive and complex EUV systems.

Several US startups are developing competing approaches to challenge ASML's market position. These include companies working on free-electron laser sources, multi-beam mask writers, and nano-imprint lithography techniques.

The emergence of multiple ASML alternatives stems from the high costs of current EUV technology and geopolitical pressure to develop domestic semiconductor equipment capabilities. However, most alternative approaches remain in early development stages and face significant technical and commercial hurdles.

Beyond standalone lithography tools, Substrate can leverage its proprietary accelerator technology, X-ray optics, and resist chemistry to offer integrated front-end manufacturing lines. This bundling approach could expand the company's addressable market from the $25 billion annual lithography equipment market into the broader $100 billion wafer fabrication equipment market.

The company's vertical integration across multiple process steps positions it to offer turnkey advanced manufacturing capabilities, particularly attractive to new entrants seeking to establish domestic chip production without navigating complex supplier relationships.

X-ray lithography's ability to pattern thick wafers and create high-aspect-ratio structures opens opportunities in advanced packaging and through-silicon via applications. The growing chip stacking and advanced packaging market represents a significant expansion beyond traditional logic chip manufacturing.

Specialized mask sets and process recipes for 3D integration and backside power delivery could extend Substrate's reach into the rapidly growing advanced packaging segment, where traditional optical lithography faces fundamental limitations.

The participation of In-Q-Tel and focus on domestic manufacturing positions Substrate to capture defense and aerospace applications requiring trusted, secure semiconductor supply chains. Classified production lines and specialized military chip requirements could provide high-margin anchor customers.

Government customers often prioritize supply chain security and domestic sourcing over pure cost optimization, potentially supporting premium pricing for Substrate's US-manufactured systems.

Technology validation: Substrate's X-ray lithography remains unproven in high-volume manufacturing. Moving from lab demos to production-qualified systems typically takes years of development and validation with risk-averse semiconductor manufacturers.

Capital intensity: Developing and manufacturing advanced lithography equipment requires large capital investment and long development cycles, with the risk that ASML or other competitors could introduce alternative technologies or price cuts that undermine Substrate's position in the market before it reaches commercial scale.

Customer concentration: Advanced semiconductor manufacturing is concentrated among a small number of major players, creating customer concentration risk. Losing a single major customer or failing to secure initial design wins could materially affect the company's growth trajectory and viability.