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The race to produce more chips is on, and Europe is in. ASML<\/a>, the Dutch company that has a near-monopoly on manufacturing the machines used for chipmaking, may soon no longer be an isolated success story. <\/p>\n Like its U.S. counterpart<\/a>, the European Chips Act<\/a> aims to foster the semiconductor industry \u2014 in part thanks to state subsidies. One of the beneficiaries is QuantumDiamonds<\/a>, a German startup that applies a novel approach to inspecting chips.<\/p>\n With the approval of the European Commission, it has been granted \u20ac76 million in non-dilutive funding<\/a> provided by Germany\u2019s federal economy ministry and the state of Bavaria. The startup will use it to set up a new facility for the production of semiconductor testing equipment in Munich as part of a $178 million investment plan<\/a> it had already announced.<\/p>\n A spinout from the Technical University of Munich (TUM), QuantumDiamonds has also raised a \u20ac15 million equity round led by VC firm World Fund<\/a>, TechCrunch learned exclusively. The company declined to disclose its valuation, but said its round was also backed by Bayern Kapital and existing investors including Creator Fund, Earlybird, First Momentum, IQ Capital, Onsight Ventures, and UnternehmerTUM.<\/p>\n CEO Kevin Berghoff told TechCrunch that raising the round was a fairly quick process, as QuantumDiamonds was able to demonstrate customer pull. \u201cWe work with almost everyone in the chip ecosystem,\u201d he said. With huge demand for all kinds of chips, there\u2019s just as much demand for solutions to speed up the manufacturing process and improve the output.<\/p>\n By compressing a defect detection process that usually takes weeks into a two-minute inspection that doesn\u2019t stop production lines, QuantumDiamonds claims that it can help the likes of Taiwan-based Foundries and Korea\u2019s Memory Makers save hundreds of millions of dollars.\u00a0<\/p>\n This means that its hardware is typically paid back entirely within a couple of months, Berghoff said. It also leaves room to cover the subscription fee that the startup charges for on-site support and for its software, which interprets the data and usually gives clients a strong indication of what they should address in their manufacturing process.<\/p>\n Behind the scenes, this happens to be one of the first actual use cases of quantum technology \u2014 unlike chips, quantum sensing is already operational in its ability to generate magnetic fields that detect defects with high precision, and that\u2019s all customers care about. \u201cThey couldn\u2019t care less about it being quantum,\u201d Berghoff said with a laugh.<\/p>\n Presumably, neither do they care about the diamonds \u2014 but in case you are wondering, these are synthetic. What QuantumDiamonds does is leverage their tiniest properties to observe how electricity is flowing through chips. Compared to current inspections, which look at the top layer of a chip with a microscope of sorts, this has the advantage of detecting defects through all layers, without destroying the chip in the process.<\/p>\n This capability could be particularly relevant as chips are increasingly multi-layered. Startups such as Semron have been developing 3D chips, and the industry seems to agree this is the way to go for AI data centers, Berghoff said. \u201cThe thing is that the transistors cannot get smaller, so in order to get the same power and the same compute, you start to add more and more layers.\u201d<\/p>\n Large competitors including \u201c100 billion market-capped U.S.-based inspection companies\u201d will likely adapt at some point, but QuantumDiamonds has first-mover advantage, Berghoff said. \u201cThere is no U.S. or Asian company that has shipped those tools.\u201d The startup is already out of the lab, and on its way to moving from its clients\u2019 labs to their fabs \u2014 the semiconductor manufacturing plants.<\/p>\n \u201cWhat we have now is a tool for a lab environment, where you do sample-based testing, and test maybe one out of a million chips,\u201d Berghoff said. \u201cWhat we now aim for is to also do high-throughput testing, meaning you can do 100% quality control in the fab itself.\u201d<\/p>\n These machines are costly, although it depends on how you are comparing, Berghoff said. \u201cWe are in the single-digit millions for the lab tools. And the high-throughput system could be up to $10 to $15 million; but it would not be anywhere close to ASML machines that [cost] maybe $400 million. So it\u2019s expensive, but for them, we are quite cheap.\u201d<\/p>\n The comparison could work in other ways. \u201c[QuantumDiamonds] can become Europe\u2019s next ASML,\u201d World Fund managing partner Daria Saharova wrote in a statement. That\u2019s VC bullishness for you, but it could also play out differently. \u201cASML also wants to do more [when it comes to] inspection, so they are a typical company that might buy us at some point,\u201d Berghoff said candidly \u2014 although ASML said recently it isn\u2019t too keen on M&As<\/a>.<\/p>\n For the time being, QuantumDiamonds may be more akin to another World Fund portfolio company: IQM, the Finnish quantum spinout that recently went public<\/a>. Both companies come from Europe\u2019s deep tech breeding ground, and aim to leverage European support and funding to go global.<\/p>\n QuantumDiamonds is still at an earlier stage of its journey, but 2026 has been a year of international expansion for the startup, which opened a regional hub in Taiwan and completed its first commercial deployments both in Taiwan and in the U.S., where it installed a system at Eurofins EAG Laboratories in Sunnyvale, California.<\/p>\n However, its new funding will also generate jobs in Munich, where most of its team of 70 people is based. That\u2019s also where Berghoff and his co-founder and CTO, Fleming Bruckmaier, plan to double its engineering team over the next 12 months, taking advantage of affordable talent both with quantum and with semiconductor expertise. \u201cWe have what we need here to ship overseas,\u201d Berghoff said.<\/p>\n<\/div>\n When you purchase through links in our articles, we may earn a small commission<\/a>. This doesn\u2019t affect our editorial independence.<\/em><\/p>\n