Morphotonics Raises €40M to Expand Display Tech Into Data Centers

Morphotonics, a Dutch specialist in nanoimprint lithography (NIL), has secured €40 million in funding to expand its manufacturing capabilities. While the company operates in the same broad semiconductor ecosystem as industry giant ASML, it focuses on a distinct niche: creating high-precision optical components for augmented reality (AR) devices and emerging data center technologies. The startup leverages established supply chains and vendor relationships within the Netherlands to support its growth.

The investment round was led by 3M Ventures, Innovation Industries, and BOM, with additional participation from Invest-NL, the European Innovation Council (EIC) Fund, Ernij Next, and the European Investment Bank (EIB). This capital injection supports Morphotonics’ transition from a research-focused entity to a scalable manufacturer of optical hardware.

Scaling Production for AR and Optics

For over a decade, Morphotonics has refined its NIL process, which involves using a physical stamp to imprint patterns onto photosensitive materials. This technique is critical for producing the complex waveguide technology found in modern smart glasses. These waveguides are thin layers of glass or plastic that channel light to direct images into the user’s field of view. The technology underpins several major consumer products, including the Meta Ray-Ban Display, devices from Even Reality, and systems by Magic Leap.

Market demand for these optics is accelerating rapidly. Recent data indicates that sales of smart glasses in China doubled during the first eight months of this year. Furthermore, market research firm IDC projects that global shipments of display-equipped smart glasses will reach 12.2 million units by 2030. To meet this surge in demand, manufacturers require equipment capable of mass-producing these delicate components with high precision.

Hugo Da Silva, CEO of Morphotonics, noted that the company typically integrates its equipment directly into customers’ supply chains. “Typically, display manufacturers would acquire our equipment as part of the supply chain, and we integrate it into the entire manufacturing process,” Da Silva said. “We teach them the process, we provide the chemicals, and they can manufacture that.”

Expanding into Data Centers and Global Operations

Beyond consumer electronics, Morphotonics is targeting the data center sector through co-packaged optics. This technology utilizes Photonic Integrated Circuits (PICs),chips that transmit data using light rather than electricity,to enhance connectivity between servers and network infrastructure. Although the company has not yet shipped machines for this specific application, it reports that potential customers have already validated the underlying technology.

The new funding follows an extended financing effort that began in 2024. Since CEO Hugo Da Silva joined the company in September 2024, Morphotonics has more than doubled its workforce from approximately 30 employees to 60 people. The company aims to stabilize its headcount at between 70 and 75 employees as it continues to hire for key roles.

Manufacturing operations are heavily concentrated in Asia, with dedicated teams in China, Taiwan, South Korea, and the U. S. Emphasizing the importance of regional support structures, Da Silva stated, “Strong local presence is very important.”

Looking ahead, Morphotonics is developing its next-generation machine, currently under construction. This equipment is designed to produce more than 6 million waveguides annually and is expected to begin shipping in early next year. Currently, the company generates roughly 90% of its revenue from hardware sales, with 10 to 15 systems deployed globally. By licensing its proprietary processes alongside hardware, Morphotonics seeks to ensure optimal performance for its clients. The company plans to increase its deployment base to 50 systems within the next two to three years, a move anticipated to boost service-related revenue streams significantly.