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Yannik and Herwig, welcome to Sourcery and Stripes' annual gala. We're here in Monaco and we're going to go deep into photonics and what you're building with TheMA. But before we get into that, we're going to go into a long conversation on photonics. So Yannik, I'd love to start with your background, and then Herwig, we'll get into yours. How did you get into photonics?
So I was one of these nerdy kids who locked himself up in his bedroom playing Lego all day. So naturally, I went to engineering school. And that was 20 years ago. And back then, silicon photonics was this niche upcoming branch in engineering with no prospect for any job at all. So I decided to jump on that ship. I did my PhD in that field, and then by that time I had the opportunity to move to San Diego to join a startup company there that was trying to commercialize silicon photonics, one of the first companies to do that and to successfully do that. I moved back to IMEC where I worked on laser integration for silicon photonics for a while, and then five years ago I joined Nvidia, back then when I still had to explain to people what Nvidia actually was. And so we started from scratch, built the silicon photonics technology there into a product-ready maturity, and now I'm starting at TheMA.
How did you get involved?
So I've been an investor most of my life, turned operator very late, but I've been focused on deep tech for quite a while. And so I got involved in the fascinating world of photonics almost a decade ago, and realized three, four years ago that the train was leaving the station and there were some gaping holes in the supply chain, and that is what we're trying to solve with TheMA. Realizing that, you know, this visionary choice of Yannik 20 years ago to study the field of silicon photonics was something that has put Belgium on the map and has created a talent base that's broad and deep. And I've spent my life selecting, honing, and nurturing talent. And so that's what we're going to hope and do with this.
So let's lay out the state of the market and how chips have gotten to this point, why copper is going out of date, and why there's a focus on photonics and lasers. Can you explain a little bit of that, and also why Europe?
So I think the market is the part that really dragged me into it. We saw a much bigger opportunity than what most people in the field were seeing. That was because we were talking to the CTOs of data centers and realized indeed what their need was and how photonics could help solve this. And we were listening very carefully when some of the gurus of the ecosystem, like Andy Bechtolsheim, were quoting numbers that far exceeded what even the most optimistic analysts were saying, and we felt that they were very well informed. And so that's what pushed us to do this.
And to answer your question about where we are today, so if you think about AI, you think about GPUs, right? You think about these compute engines that actually run the models. But the models have gotten so large that they no longer fit on a single GPU. So what we need to do is we need to interconnect multiple GPUs together to run these models. Traditionally, that's been copper interconnects, but as these GPUs get faster, they need more data. They need more data at a faster rate. And copper is running out of steam. And that's why we're transitioning to optical interconnects, which can bring much higher data transfer bandwidth. So yeah, that's where we are.
So I recently interviewed Tony Kim of BlackRock in Paris at the Raise AI Summit, and we were breaking down the entire industry. He says there's a $10 trillion rebuild that's happening, and one of the most affected and going to be the most effective places for that spend is in these data centers, because the current old infrastructure of a data center is not built for AI. It's completely inefficient. It takes a lot of water, it takes a lot of energy, and the chips that are being used in those are just outdated, and they cannot handle the parameter models that are in the market. So I would love to get kind of an understanding from one of you the difference in architecture of those data centers and how they're transforming with this new build.
Yeah. So if you compare a traditional hyperscale data center to a modern AI factory, one of the big differences is that there is way more traffic between different servers. If you think about your traditional Google search five years ago, it was basically your traffic is routed to one computer that finds the answer and sends that answer back. Now, if you think about modern AI infrastructure, there's, as I said before, the models no longer fit on a single GPU. So there's already GPU-to-GPU communication. But now in the age of agentic AI, there's a model that is doing a call to some tool which is on a different server that's returning the results to the GPU. So there's a lot of traffic within the data center which is very sensitive to latency, basically the time between when all these different calculations can run. So what that means in reality is that you need a much flatter network.
Instead of a really deep hierarchical tree of switches, you need a much flatter network. That means far more direct connections between switches and GPUs. So basically a much denser network than what we had in the traditional hyperscale.
If you're asking a CTO of a data center what keeps you awake at night, the energy consumption is answer number one, because it's existential to them. They don't know how to solve it. Their CEO is saying, 'We need to grow, we need to grow.' And he's saying, 'Okay, but where?' Because nobody can deliver the grid. Google negotiated for three years with Amsterdam and had to move its plans to actually now Belgium because they simply can't get the grid. And so that obviously, with the ambitious growth plans that they have, requires a much more fundamental solution that can scale to the same size as the problem. Right? And so there are many data centers, there are many more being planned. Therefore, you know, upgrading the grid or building new power plants cannot happen in the time that is required. And that's where, you know, every deep tech paradigm shift needs a killer app for photonics. More than 20 years in the making, 30 years in the making on the science side, energy consumption by data centers and AI is that killer app. And so now we get to where we are today, which is that's great, but nobody was prepared for the speed of change. The speed of change happened November 22, ChatGPT comes out, it goes viral like it's never been seen before. And with the growth of that came this requirement or this realization: okay, we need to switch to photonics. Nvidia took the lead in that. They had been talking about photonics for a long time, but they said, okay, we need to make the switch happen. 2024, they were even louder about it. 2025, they really pushed the market. In 2026, they showed the market what they meant with their investments in Marvell and Coherent. They've invested four times the total market size in the first six months of this year. And so now everybody realizes, oh, the supply chain is not ready. The innovation is ready. The photonic scientists have done a lot of work. The photonic designers have done a lot of work, but you need to work that all the way back to the beginning, which is, you know, all the way from the raw material, over the tooling, over the infrastructure to build. And I think that's where the pain point sits today, and it's part of what we're trying to solve for.
So how many photonic companies are out there? I interviewed the Lumentum CEO Michael Hurlston, and even just looking at that company, they are spilling over with demand. Their stock went up a thousand times in a year. Insane. And he had just stepped in maybe a year and a half ago. So he really came in at an opportune time. But I'm curious, what does the state of the market look like for the companies that are existing, and how does it all work together?
I think again, what needs to be understood is the shift in size of the market. Photonics for years was an academic endeavor with some applications that was being prepared for in the supply chain at that scale. And now all of a sudden Nvidia steps in and says, no, no, no, guys, this is much, much bigger. And so, you know, obviously Lumentum and Coherent are the two leading companies in the West doing this. They're the only ones scaled at that size. If you look at the rest of the industry, the traditional players, the TSMCs, GlobalFoundries, Towers of this world, have made a tremendous effort investing in the part that fits in their production process, which is the front end, the silicon photonics, so making the wafers. But if you deliver a wafer to Nvidia, that's not what they ordered. They ordered a final chip. So there's a lot of other things required. Lasers first and foremost, which is what Lumentum and others are making, and so that's going to have to scale by a lot, and that's challenging because the throughput of the machines is not at all where it needs to be. The efficiency, the yield is not what it's supposed to be, and the substrates, the raw material, is really, really cornered. The market is, I mean, there's only a handful of suppliers. And on top of all these problems, you now have the East-West divide, which is getting quite problematic. So in all of that, we think Europe is in a sweet spot, because in Europe you have industrial capacity that was available, industrial infrastructure that was available. That's what we bought. You have photonic talent that has been trained for decades. You have industrial talent that was available because all the big foundries closed. And so the combination of all of this, in addition with a desire of European sovereignty, makes that we're in an ideal spot to do this from Europe.
So let's go to the founding of the company and how you guys came together. What was that process like?
Yeah, we have been building the concept of a pure-play photonic foundry at a much larger scale. We were looking around. We were seeing that all the big guys were doing the front end of the process, as I said, the silicon wafers, and we were seeing a lot of innovation happening, but that was mostly university spinout scale. And so there wasn't really an industrial player in the middle. And as we were making plans in 2023, 2024 to do this, there was, I guess, some serendipity involved in that. A large-scale European foundry went out of business, and so we took the occasion, we jumped on it, we bought it, and it delivered, I think, a very nice combination. One, 20 km away from IMEC, world-leading research center, lots of talent. Two, lots of industrial talent. As I said, an infrastructure that was ready to go right at the time when everybody needs it. Because when you want to build a foundry of this size, you're talking about a three- to five-year project. It's between getting the permits and the licenses and building that whole thing. It's not just clean rooms. The infrastructure is quite complex. So having all of it ready to go in 2024 was, you know, a serendipitous event, I'll call it that. And so that's where we jumped on it. And then we started talking to both sides at the same time. When I say both sides, we started talking to the industrial talent and the photonic talent and said, look, Europe has invested successfully for 20, 30 years in photonic innovation. This is the time for industrialization. And, you know, Yannik and others jumped on board instantly. So that's where we are.
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Yannik, from a technical standpoint, where are you at?
So, yeah, I was in a great spot at Nvidia, right? We were building the next generation of chips, and I wasn't planning to go anywhere. But when I started to talk to Herwig and I learned about the ambition of this enterprise and what he was planning to do, I realized that this was a once-in-a-lifetime opportunity for me to join a mission that's going to solve some of the core problems that are slowing down probably one of the biggest or the biggest technological revolution that I will witness in my lifetime. So I decided to leave the golden palace and jump onto the pirate ship and set sail.
Selfish question. What is it like at Nvidia? What have you learned there? Like operating principles, what is it? What is it actually like?
It's an incredible company. It feels like a startup. It's very agile. The idea is to fail fast, so we start building stuff, if it doesn't work, move to something new. It's, in my experience, a very apolitical company. The org chart is just a piece of paper. If there's a project and you can contribute, you contribute to that project. Doesn't matter where you are in the org chart. So yeah, it's an incredible company.
And then for people who don't know what IMEC is, can you also explain IMEC and where it fits in the stack?
And it's not IMAC, by the way. It's not...
IMEC, Interuniversity Microelectronics Center. So microelectronics center, that tells you something about how old this institution is. So it started over 30 years ago and has been spearheading research initially in the area of electronics, but since some time also a much broader area. One of these is photonics. So they started photonics, IMEC was one of the birthplaces of silicon photonics in the world and has grown to be the number one research center when it comes to advanced electronics technologies in the world.
Mhm. And where are you guys at in terms of commercial progress to date? When are you going to start rolling out your customers?
Our biggest challenge is the timeline customers are putting in front of us. The good news is that the volumes they're asking for even surpass our wildly ambitious projections. So that's certainly very positive. The constraints for us now, the whole market, Coherent, Lumentum, and others, everybody is facing the same constraints. The tool builders are not building anywhere near enough tools, and the tools themselves need to be further improved for throughput, for efficiency, for yield. And then even more problematic, the substrates, so the raw material. And so here's the good news, as I said, Europe has been investing successfully in innovation, and so some of these problems, even though they didn't anticipate this shift, were being researched. And so throughout Europe, Greece, Germany, Spain, France, Switzerland for sure, there has been a pipeline being built on tackling individual technical challenges around this. And so to answer your question, our timeline is to start producing next year in 2027 and work towards a full ramp-up by 2028. So our timelines are short. But Europe is wide awake and ready to go, and we feel that's not just a slogan, we feel it every day. So there's a lot of collaboration going on, and we're finally starting to really work across borders, and very optimistic about Europe playing a significant and TheMA playing a significant role in this.
Has it been hard to hire?
That was the question I got most before I started because I was all alone. Everybody said, where are you going to find the talent? We are really enthusiastic about the people that are joining us. That's true for the board, where we have three of the most senior people of IMEC joined our board. Obviously people like Yannik from Nvidia, but we have people from AWS, we have people from TSMC, Lam Research, like the top companies. There's a lot of talent, many of them are European, because what Yannik didn't say is that he chose a niche field to go and study in, but then you have the choice, you either go abroad to work, at least at the time, or you become a banker. So it's either or. And what we're hoping to build with TheMA is, you know, a homegrown magnet for talent that becomes a self-sustaining ecosystem of innovation and industrial production. And so the question to your answer is no. We have been very fortunate with attracting talent. Yeah.
So Europe's been waiting for this. Europe's been waiting for this. If you read the website of the European Council on the European Chip Act 2, they say that they really want to prioritize photonics within photonics. They want to really focus on industrialization, pure play. So it's almost like reading a definition of TheMA. And I think that's, you know, it has to do with European sovereignty, but it's also got to do with Europe realizes that it has what it takes to not just play but actually win in this game. One of my favorite statistics from one of our board members, who was the visionary professor who founded the photonics department at the University of Ghent. Between 2000 and 2015, there were 4,000 peer-reviewed white papers on photonics globally. 35% of them came from the University of Ghent. I think with the exception of beer and chocolate, Belgium has no dominance like that in any other field.
