Fab2 Raises $500M at $3.7B Valuation to Mass-Produce Chip Fabs

Building a single semiconductor fab typically costs billions of dollars and takes years. That’s kept leading-edge foundry work confined to a handful of players — TSMC, Samsung, Intel — while the Netherlands’ ASML holds a near-monopoly on lithography equipment. As the US pushes to bring chip manufacturing back onshore, a wave of startups trying to tear down that barrier to entry has been raising large rounds. This time it’s a company trying to mass-produce the fabs themselves.

“We Print Chips”

Fab2 is a semiconductor startup that designs and builds every piece of equipment inside its fabs in-house, then mass-produces small fabs assembled from that equipment. The company calls this a “fab fab” — a factory that makes factories. From basic components like pumps, valves, gas lines and sensors to lithography tools and the vacuum chambers that house them, Fab2 builds what it can’t buy off the shelf, then automates the process to iterate on new manufacturing techniques quickly. It also builds Studio, a browser-based, collaborative chip-design tool meant to move as fast as its fabs do. The company’s tagline: “We print chips.”

Founded in 2022 as Atomic Semi, the company rebranded to its current name, Fab2, this past July and relocated its headquarters to Texas. It now operates a roughly 120,000-square-foot “chip fab” in Austin and a roughly 30,000-square-foot “fab fab” in nearby Lockhart, alongside the 25,000-square-foot “garage fab” in San Francisco where it got its start.

Co-founder and CEO Sam Zeloof first became known for building semiconductors in his family’s garage as a high schooler, and co-founded the company in 2022 while a student at Carnegie Mellon. Co-founder Jim Keller is one of the industry’s most prominent chip architects, having worked on DEC’s Alpha processors, AMD’s K7, K8 and Zen architectures, Apple’s A4 and A5 chips (via the P.A. Semi acquisition), Tesla’s Autopilot chip, and a stint as Intel senior vice president. He’s currently also CEO of AI chip company Tenstorrent.

A $500M Series A at a $3.7B Valuation

Fab2 said it closed a $500 million Series A led by Fundomo. The round values the company at $3.7 billion. Corner Capital, Paradigm, Duquesne Family Office, Maverick Silicon, StepStone Group, Protagonist, UDC Ventures and angel investor Naval Ravikant also participated.

Fab2 raised a $15 million seed round in 2023 led by the OpenAI Startup Fund at a roughly $100 million valuation. Its valuation has climbed nearly 37x in under three years.

Other Challengers to the Lithography Monopoly

Fab2 isn’t the only US startup taking on incumbents in semiconductor equipment. Substrate raised a $100 million seed round at a valuation north of $1 billion, backed by Peter Thiel’s Founders Fund among others, betting on a new particle-accelerator-based lithography approach aimed squarely at unseating ASML and TSMC. xLight is developing a free-electron-laser source for extreme ultraviolet (EUV) lithography, and has raised a $40 million Series B in addition to a $150 million CHIPS Act loan letter of intent. Source Foundry, a stealth startup that hasn’t shipped a product yet, is chasing the same target — AI hedge fund Situational Awareness has put a combined $500 million into it at a $5 billion valuation.