Key facts
- Etched, a chip designer valued at $5 billion, has had its first chip manufactured by TSMC.
- Etched plans to ship systems powered by its new chip to customers this summer.
- Jack Selby, founder of Copper Sky Capital and managing director at Thiel Capital, invested in Etched.
- Selby aims to leverage his Arizona connections to help Etched reshore chip fabrication to the state.
- Copper Sky Capital is currently raising a $300 million second fund.
- Copper Sky is interested in backing hardware companies, including in the defense sector, that can establish manufacturing operations in Arizona.
Etched, a four-year-old chip design startup valued at $5 billion, has announced that TSMC has manufactured its first chip. The company plans to begin shipping systems powered by this chip to customers later this summer. However, Etched faces challenges in scaling production due to limited capacity at TSMC's Taiwan factories.
Copper Sky Capital, an early investor in Etched, is hopeful that manufacturing constraints can be resolved by producing chips at TSMC's upcoming facility in Arizona. Jack Selby, founder of Copper Sky and managing director of Thiel Capital, secured an allocation in Etched's $120 million Series A funding round two years ago partly by promising to help the startup eventually reshore its chip fabrication to Arizona.
Selby, a former PayPal executive, founded Phoenix-based Copper Sky in 2021. The firm's initial fund focused on startups in Arizona and the Southwest, with a thesis that regional companies were undervalued compared to coastal startups. Selby aimed to bridge this gap by assisting California-based hardware startups in relocating their production to Arizona.
Selby highlighted Copper Sky's investment in Etched as a result of his connections within Arizona's semiconductor industry, particularly with TSMC's Gigafab. As a board member of the Arizona Commerce Authority, Selby is actively involved in attracting out-of-state businesses to establish manufacturing operations in the region.
While Copper Sky has broadened its investment scope to include non-traditional venture hubs nationwide, it remains interested in backing hardware companies, including those in the defense sector, that can set up manufacturing in Arizona. The firm is reportedly raising a $300 million second fund.