Here you go. From Google translate.
In brief
Smart Photonics, which makes photonic chips, raises €100 million from the government and investors.
Major powers from the 'ordinary' Dutch chip industry – ASML, NXP and VDL – are also investing.
Higher interest rates make it more difficult for high-tech companies to raise a lot of money.
The Dutch government, together with chip giants ASML and NXP and VDL Groep, is investing €100 million in the Eindhoven chip factory Smart Photonics. The Netherlands wants to become a world power in the field of the photonic chips that the company develops, and three years ago already dug deep into its pockets to keep Smart out of the hands of a Chinese party. The money should allow the company to continue to grow.
Photonic chips transfer information via light particles (photons) instead of electrons, on which the traditional chip industry is built. Photonic semiconductors are more economical and faster than ordinary computer chips and theoretically enable breakthroughs in areas such as medical sensors, self-driving cars or quantum computers.
The Netherlands is a scientific leader when it comes to photonics. By investing hundreds of millions in this sector, the government hopes to be able to convert this knowledge advantage into an economic advantage when the still small market matures. It was unthinkable for a long time that so much money would be invested in a high-risk scale-up. Since shipbuilding company RSV went bankrupt in the early 1980s despite billions in government support, the Netherlands has pursued a very cautious industrial policy.
Money and advice
In addition to the government and several previous and new financial investors, three chip superpowers from the Eindhoven region are now also stationed behind the small factory on the High Tech Campus. They do not want to say how much these parties contribute. In a joint statement, they state that their investment contributes to strengthening the tech sector in the region and the Dutch and European ecosystems around photonic chips.
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VDL says through a spokesperson that it invests more often directly in smaller companies 'to boost the high-quality manufacturing industry'. This investment is unusual for ASML. The chip machine maker usually participates in a roundabout way, with a contribution to the DeeptechXL investment fund. ASML also assists companies in the area with knowledge and support. NXP declined to comment further on the investment in Smart, which will be announced on Wednesday.
For Smart, the participation of the major parties from the region is an important step, says CEO Johan Feenstra. 'Not only financially, but also substantively they can help us achieve the growth we have in mind.’
Investment climate deteriorated
Smart had to raise the money at a time when investments in tech companies have fallen to an all-time low. Due to the rise in interest rates, lenders are more often opting for safer investments than for investments in the relatively risky high-tech industry.
'It was difficult,' admits Feenstra. It's no secret that the possibilities for tech companies to raise larger amounts have deteriorated drastically over the past year and a half. To be able to report €100 million after all is super important.'
Smart will receive €60 million in one go from the National Growth Fund, a pot of €20 billion with which the government invests in projects that should make the Dutch economy 'future-proof'. The remaining €40 million comes — in addition to the chip companies — from InvestNL (the investment fund to which the Ministry of Economic Affairs also contributes), the development company of North Brabant (BOM) and Photon Delta, the partnership of the Dutch photonics sector. That organization also distributes the €471 from the Growth Fund, which is reserved for photonics in total. The other lenders are BOP Impact Ventures, ING, Innovation Industries and KPN-Ventures
What is striking is that those parties lend Smart the money instead of investing equity in the company. The parties involved do not want to say why this construction was chosen. This may have been chosen with a view to a future IPO. By providing loans, there is no need to attach value to the company, which would have happened with an investment against shares.
After the previous investment round, Smart Photonics has invested in scaling up and improving the production process. Smart will now continue with that at the current location. The hope and expectation is that the demand for photonic chips will grow in the coming years. And Smart wants to be able to play a leading role in that industry.
Ultimately — the CEO speaks of 'the medium term' — a new factory at a different location is then necessary. The investments required for this can quickly run into the hundreds of millions of euros. Feenstra: 'It can be financed in many ways, and a possible IPO is one of them.'
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