Climate friendly chip tech firm receives US$50 million

Traditionally, chemicals used in air conditioning, freezers and refrigeration have been harmful to the environment by destroying the ozone layer and polluting water sources. However, new cooling chip technology is starting to change the way we keep cool.

The semiconductor chips also used in other technologies

Phononic, the company based in Durham in North Carolina, US, is using a material called bismuth telluride to make the so-called colling chips and has announced it has raised US $50 million from Goldman Sachs Asset Management. The technology works by running electricity through the chip and its current removes heat, leaving one side of the chip to cool and the other to heat up, according to Tony Atti, the company’s co-founder and CEO.

The chips can be as small as a fraction of a fingernail or as big as a fist, depending on how much coolants are required. They have already been used to create compact freezers for vaccine transportation or for ice cream at convenience stores in the US like Circle K. Another more recent and fast-growing use is to prevent overheating in lidars, laser-based sensors in autonomous cars and optical transceivers for 5G data transmission.

Although the bismuth telluride powder is itself toxic, when it is processed into a semiconductor wafer and made into a chip, it becomes ‘benign’ and can also be recycled or disposed of as it then meets all chip safety and disposal standards.

Company partnerships

The cooling chips are manufactured in Phononic’s own factory in Durham and for their mass production, the company is also working with Thailand-based Fabrinet. The freezers for vaccines and ice cream are built in China by contract manufacturers and carry the brands of Phononic’s customers, or in some cases are co-branded.

The funding from Goldman Sachs will be used to build out high-volume manufacturing and also to expand Phononic’s markets and product line. A spokesperson for the company did not reveal its latest valuation but said it was ‘north of half a billion dollars’. Previous investors include Temasek Holdings and the private equity and venture capital firm, Oak Investment Partners.