Cooling chips maker Phononic raises $50mn from Goldman Sachs

Phononic, a Durham North Carolina-based startup that makes cooling chips out of a substance called bismuth telluride, has raised $50 million from Goldman Sachs Asset Management.

For decades, scientists and researchers have advised against using chlorofluorocarbons (CFCs) and other chemicals because they destroy the ozone layer and pollute the environment. However, following the 1987 Montreal Protocol, it appeared that the process of restoring Earth’s protective stratospheric ozone layer was on track.

Until 2018, when fresh emissions of the banned chlorofluorocarbon-11 (CFC-11), which depletes the ozone layer, were discovered. Its production and use were banned globally in 2010.

“When electricity runs through the chip the current takes heat with it leaving one side of the chip to cool and the other to heat up. The Historic refrigerants that were used for vapor compression systems are both toxic and a contributor to global warming.”

According to the company, the chips can be as small as a fraction of a fingernail or as large as a fist, depending on the amount of coolant required, and have been utilized to make compact freezers for vaccine shipment or ice cream.  Preventing overheating in lidars, laser-based sensors in autonomous cars, and optical transceivers for 5G data transmission is a more recent and rapidly expanded use.

While bismuth telluride powder is toxic in itself, Mr. Atti claims that when it is turned into a semiconductor wafer and made into a chip, it is “harmless” and can be recycled or disposed of because it meets all safety and disposal criteria.

The cooling chips will be made in Phononic’s factory in Durham, and the company collaborates with Thailand-based Fabrinet (FN.N) for mass production. The funds will be used to expand Phononic’s markets and product portfolio, as well as to build out high-volume manufacturing.

Related: Apple teams up with Goldman Sachs on ‘Buy Now, Pay Later’ plan; Reports