Morphotonics Raises €40M to Scale Display Tech for Data Centers

Morphotonics, a Dutch technology firm, has raised €40 million to scale up its manufacturing capabilities and enter the data center market. The company specializes in nanoimprint lithography, a process that stamps precise patterns onto materials to create optical components such as waveguides for augmented reality glasses. While it operates in the same general field as major chipmaker ASML, Morphotonics focuses specifically on optics rather than silicon wafers, leveraging a shared supply chain of vendors to produce high-precision displays.

The funding round was backed by 3M Ventures, the European Investment Bank, and other institutional investors. This capital follows an extended fundraising effort that began in 2024 and has allowed the company to more than double its workforce to 60 employees. The investment is designed to support the rapid growth in demand for smart glasses, a market where sales have doubled in China this year and global shipments are projected to reach 12.2 million units by 2030.

Stamping light into wearable displays

The core of Morphotonics’ technology involves creating a stamp to apply patterns to photosensitive materials. This method is critical for producing waveguides, which are thin sheets of glass or plastic that direct light to the wearer’s eyes in devices like the Meta Ray-Ban Display. By controlling how light moves through these materials, the company enables the compact displays found in modern smart glasses, a segment that is currently experiencing a surge in consumer adoption.

To meet this growing demand, Morphotonics is building a new machine capable of producing over six million waveguides annually. This equipment is expected to begin shipping early next year. The company’s business model involves selling these machines and licensing the manufacturing process to display producers, who integrate the technology into their own supply chains. This approach allows manufacturers to produce high-quality optics at scale without developing the underlying lithography technology themselves.

Expanding into data center infrastructure

Beyond consumer electronics, Morphotonics is applying its stamping technology to co-packaged optics for data centers. This involves using photonic integrated circuits, which transmit data using light instead of electricity, to improve the speed and efficiency of server connections. While the company has not yet shipped commercial machines for this specific application, it states that customers have already validated the technology. This expansion allows Morphotonics to diversify its revenue streams beyond the consumer electronics sector.

Currently, the majority of the company’s revenue comes from hardware sales, with about 15 systems deployed globally. However, the firm expects to increase its service and licensing revenue as it aims for 50 deployments within the next three years. This shift is part of a broader strategy to establish a strong local presence in key manufacturing hubs across Asia, including China, Taiwan, and South Korea, where much of the global display production takes place.

Scaling production and global reach

According to CEO Hugo Da Silva, the company’s growth strategy relies on integrating deeply with its customers’ manufacturing processes. Morphotonics provides the necessary chemicals and technical guidance to ensure that display manufacturers can produce reliable components. As the company continues to hire, expecting to stabilize its headcount around 75 people, it positions itself as a critical supplier in the optical supply chain. The trade-off for this rapid expansion is a heavy reliance on specific regional manufacturing ecosystems, which requires maintaining strong local partnerships to remain competitive.