Welcome to the 77th edition of Deep Tech Catalyst, the channel by The Scenarionist, where science meets venture!
If you’re building in semiconductors—or exploring how scientific breakthroughs in compute become investable companies—this conversation is for you.
Today, we’re joined by Yvonne Lutsch, Investment Director at LAM Capital!
This episode dives into the strategic realities behind scaling compute-intensive technologies, from advanced node architectures to memory stacking and early-stage corporate partnerships.
We explore:
What today’s process nodes really mean—and why “2nm” is more than just marketing
How technical founders can tap into the resources, credibility, and industrial scale of a corporate venture arm—without getting lost in the machinery
What role do CVCs play in validating deep tech ventures and opening strategic doors
How to align with corporates without compromising your company’s direction
Whether you're a founder, researcher, or investor in the compute space, this episode offers insight into the evolving relationship between science, scale, and strategic capital.
Let’s get into it. ⚙️
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BEYOND THE CONVERSATION — REFLECTIONS & STRATEGIC INSIGHTS FROM THE EPISODE
The State of Compute: Scaling Limits
In the semiconductor world, terms like "3 nanometer" or "N2P" are common currency. These designations refer to advanced process technologies used in chip manufacturing. They no longer represent the actual physical dimensions of transistors, unlike twenty years ago, when "22 nanometer" meant exactly that.
Today, they function more as marketing labels for different generations of chip-making processes.
The major players use these terms to differentiate process nodes, each representing a step forward in performance, efficiency, or density. For example, TSMC's N2P and N4P nodes define specific technology platforms that companies like NVIDIA rely on to manufacture their chips. These platforms determine how much logic and memory can be packed onto a given piece of silicon.
In essence, the name of the node reflects how finely we can "write" information onto a chip. The smaller the effective feature size, the more transistors can fit within the same area, resulting in higher performance and greater energy efficiency.
But as Lutsch points out, we’re reaching physical and economic limits. Each new step—whether it’s moving to 2 nanometers or even 1.8 nanometers—requires significant leaps not just in design, but in the complexity of the manufacturing process itself.
Beyond Two Dimensions
With planar scaling becoming more difficult and costly, the semiconductor industry has turned to the vertical axis. This means that rather than just shrinking transistor features on a two-dimensional plane, manufacturers are now building upwards—literally adding a third dimension to the chip.
According to the guest, transistors are becoming taller and narrower, allowing more of them to be stacked within the same lateral area. This architectural evolution lets chipmakers maintain Moore’s Law-like improvements in performance and density even as traditional scaling approaches lose steam.
This same vertical strategy applies to memory.
Quantum Computing: Potential and Prudence
No conversation about the future of computing is complete without mentioning quantum computing.
The promise is undeniable: a functional quantum computer could simulate atomic and molecular structures with unmatched precision, opening doors to major breakthroughs in material science, pharmaceuticals, and even energy transition technologies.
Still, for all its potential, quantum computing has yet to deliver commercially. And the guest’s measured view reflects a broader sentiment in the investment community—one that balances long-term vision with short-term realism.
Founding Teams: What Makes a Semiconductor Startup Investable
Many of the most promising ideas in semiconductors emerge from university laboratories. PhD students and postdoctoral researchers often lead cutting-edge research into novel materials, device architectures, and chip design methodologies.
However, transforming these academic breakthroughs into viable commercial ventures is a different challenge entirely.
Founders coming straight from academia typically lack hands-on industry experience. While their technical expertise is not in question, building a semiconductor startup without direct knowledge of the industry landscape—particularly the manufacturing pipeline—is extremely difficult.
So, to attract investment, especially from corporate venture capital arms, teams must include individuals who understand how to move from lab-scale innovation to productization. That means experience not only in chip design and development but also in navigating customer requirements, manufacturing constraints, and supply chain realities.
The Need for Foundry Access and Industry Know-How
One of the defining constraints in semiconductor startups is the lack of fabrication capacity. Very few startups own or operate their own fabs; instead, they rely on access to third-party foundries.
The global semiconductor ecosystem is highly centralized, with leading-edge manufacturing concentrated in the hands of a few players.
For a startup, gaining access to these fabs is not straightforward. It requires credibility, relationships, and a deep understanding of the expectations and workflows of industrial production. Teams that already include members who have successfully brought chips to market or who have worked closely with foundries in previous roles stand out to investors.
"It doesn’t have to be the whole team being experienced in the semi-space. But having a crucial part of the team in there, seeing that, done that, definitely helps a lot."
Lastly, the team needs to be able to transfer a process from a smaller fab, typically used for initial prototyping, to a larger one required for mass production.
This transition is rarely seamless, and startups often underestimate the time and resources it demands. Whenever possible, starting with access to a large fab can help mitigate one of the most challenging scale-up bottlenecks.
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Corporate Partnerships: Navigating Strategic Alliances in Deep Tech
For semiconductor startups that choose not to build their own fabrication facilities—an option that is capital-intensive and logistically complex—corporate partnerships offer a viable path forward. But the value and structure of these partnerships depend heavily on where the corporate venture capital (CVC) partner sits in the industry.
Understanding the CVC’s Position in the Value Chain
Different types of corporations bring different strengths. A CVC backed by an equipment manufacturer like LAM Research can co-develop new process technologies or help optimize a startup’s material innovation for manufacturing readiness.
Conversely, a CVC connected to a fabless chip designer might open doors to customers or offer guidance on how to position a startup’s technology within complex end-user ecosystems.
The key for founders is to understand this dynamic clearly.
Each CVC brings specific capabilities, and those capabilities must align with the startup’s needs. Whether the challenge lies in developing a new fabrication process, securing access to manufacturing capacity, or entering a commercial supply chain, the right corporate partner can offer both validation and operational leverage.
Defining Roles, Deliverables, and Boundaries
Strategic partnerships must be structured with precision, not only in terms of objectives and milestones, but also in scope. Too often, startups enter into ambiguous or open-ended agreements that later lead to misaligned expectations.
It’s essential that both parties define where the partnership begins and ends.
This includes deliverables, timelines, and the intended outcome of the collaboration—whether it’s a proof of concept, a pilot integration, or a co-developed component. Startups must also consider the legal framework under which the work is done, including ownership of intellectual property and handling of confidential information.
Strategic Alignment and Validation
While partnerships with large corporations can provide technical and operational support, one of their most overlooked benefits is the credibility they confer.
CVC arms do due diligence before investing or collaborating. This process often involves in-house engineering teams who validate the startup’s technology, competitive positioning, and scalability.
Such validation carries significant weight. It can de-risk the startup in the eyes of future investors and customers. In fact, the guest describes corporate involvement as a form of “risk mitigation,” particularly for large end customers—like a major consumer electronics company—who might otherwise hesitate to adopt a new technology from an unproven startup.
In cases where the corporate sees clear strategic value, the CVC and parent company are often highly motivated to help the startup succeed. This could include supporting integration into a supply chain or, in extreme cases, even acquiring the startup to ensure product delivery.
Still, this support comes with its own dynamics. Startups must recognize that the priorities of a large corporation may shift, and what is strategic today may not be tomorrow. Defining the depth and time horizon of the partnership helps ensure alignment and avoids becoming overly dependent on a single corporate relationship.
When to Engage a Corporate Venture Arm
One of the most frequent—and most complex—questions founders ask is when to approach a corporate venture capital (CVC) arm. The short answer: there is no one-size-fits-all approach.
The timing depends almost entirely on the internal mandate and investment philosophy of the specific CVC.
Some corporate investors engage very early. These CVCs may back a startup based only on a strong vision, a compelling research thesis, or even just a slide deck.
Others are more pragmatic, preferring to wait until the startup has a prototype, initial traction, or proof-of-concept results. Still others enter at a much later stage, when commercial validation is underway and their support can accelerate go-to-market efforts.
In the case of LAM Capital, the bar is high in terms of technical maturity. Any startup they consider for investment or partnership must have more than just an idea. There needs to be something tangible—technology that can be tested, refined, or co-developed.
Ask the Right Questions
Given this variability among CVC arms' strategies, one of the smartest things a founder can do is to ask direct, operationally grounded questions:
What kind of technologies has the CVC funded before?
At what stage?
How long did the most recent partnership negotiation take?
What kind of internal process is required to greenlight an investment or a joint development agreement?
Founders should not be shy about these conversations. Even if a corporate partner cannot answer every question in detail, the process of asking helps surface expectations on both sides. It also sends a signal that the startup understands the complexities of enterprise engagement.
Just as important as understanding the CVC is knowing the pace and bandwidth of the parent corporation. Legal departments, business development teams, and strategic decision-makers may operate on vastly different timelines than startups do. Ensuring those internal calendars can align—or at least accommodate each other—is crucial.
Agreements and Trade-offs: Structuring the Right Deal
When startups engage with corporate partners, they must be prepared to navigate two distinct categories of agreements: one focused on investment terms, the other on technical collaboration.
On the investment side, the guest outlines common contractual elements such as right of first notification or right of first refusal. These clauses give the corporate investor the opportunity to either be informed early about a potential acquisition or to make a competing offer if an outside buyer approaches the startup.
While such terms can be a source of negotiation, they are also relatively standard in CVC transactions and help formalize strategic alignment between the investor and the startup.
Where things become more complex is on the collaboration side. This is where the real work begins, particularly in capital-intensive sectors like semiconductors. Clarity on all these fronts is critical. Startups need to know exactly what they’re committing to and how those commitments will be managed over time.
Assessing Corporate Commitment
Not all partnerships are created equal. One of the most important factors in structuring a deal is understanding how strategic the collaboration truly is for the corporate partner.
Is this initiative mission-critical to the corporation’s long-term strategy?
Or is it a side project—something exploratory that can be deprioritized or canceled with little impact on the company’s core business?
This distinction has significant consequences for the startup. If the collaboration is deeply integrated and crucial to the corporation's roadmap, then it may justify dedicating substantial internal resources. However, if the corporation views the project as peripheral, the startup must tread carefully. Putting too much weight on such a partnership could leave them vulnerable if the initiative stalls or fails to scale.
The guest advises founders to take a “temperature check” early in the engagement process. Ask how strategic the project really is. Try to understand not just the perspective of the CVC, but also that of the operational and technical teams within the parent company. This insight helps startups decide how to prioritize the relationship and manage their own risk.
One Partner or Many?
Finally, the question arises: should a startup work with multiple corporates—or just one? The answer depends entirely on the nature of the technology and the depth of integration involved.
If the startup’s solution touches different parts of the value chain, collaborating with multiple partners can be both feasible and beneficial. But if the partnerships involve overlapping technical domains—especially with direct competitors—it can quickly become problematic.
For instance, simultaneous engagements with two competing equipment providers would likely raise serious conflicts.
Transparency and legal clarity are essential here. Terms must be carefully drafted to define what belongs to whom and to avoid IP or contractual disputes. In some cases, the safest course is to engage with only one strategic partner at a time—at least until the startup is in a stronger position to diversify.
From the guest’s perspective, the right path is not about choosing between one or many, but about understanding the depth, scope, and strategic alignment of each relationship. Founders must be realistic about what each corporate partner can offer, and disciplined about how much they invest—legally, financially, and operationally—into any single alliance.
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