Morphotonics raises €40M to push its display tech into data centers

The Netherlands’ ASML is possibly the biggest name in lithography, using its machines to etch patterns onto silicon wafers inside chip fabs. Fellow Dutch company Morphotonics works in a different corner of the same field — nanoimprint lithography, or NIL, a process used to manufacture the displays in AR glasses and other optics — and says it has benefited from ASML’s supply chain, using many of the same vendors.

Morphotonics spent 12 years developing that technology, largely under the radar. Now, as demand for smart glasses and other optics surges, the company said Tuesday it has raised €40 million to scale up production and push into a new market: optical components for data centers. The round was backed by 3M Ventures, Innovation Industries, BOM, Invest-NL, the European Innovation Council Fund, Dutch family office Ernij Next, and the European Investment Bank.

Morphotonics’ NIL process works by creating a “stamp” and applying it to photosensitive materials to produce various kinds of displays, from AR glasses to privacy screens for cars. That’s useful for making the waveguide technology used in smart glasses, including the Meta Ray-Ban Display, Even Reality, and Magic Leap — thin pieces of glass or plastic that deflect light along a specific path to display an image in front of the wearer’s eyes. Smart glasses are the most in-demand application right now: China said this week that smart-glasses sales in the country doubled in the first eight months of the year, and IDC noted in June that shipments of smart glasses with displays are expected to reach 12.2 million by 2030.

The latest round is part of an extended raise that began in 2024, collected in multiple installments. Morphotonics has used the money to more than double its headcount to 60 employees, up from roughly 30 in September 2024, when CEO Hugo Da Silva joined; the company still plans to hire and expects headcount to stabilize around 70 to 75 people. “Typically, display manufacturers would acquire our equipment as part of the supply chain, and we integrate it into the entire manufacturing process. We teach them the process, we provide the chemicals, and they can manufacture that,” Da Silva said. Manufacturing is heavily concentrated in Asia, with teams in China, Taiwan, South Korea, and the U.S. — reflecting, he said, the importance of a strong local presence.

Da Silva said the company’s next machine, currently being built, will be capable of producing more than 6 million waveguides a year, and is expected to start shipping early next year. Beyond displays, the expansion also includes a push into co-packaged optics, a data-center technology that uses Photonic Integrated Circuits — chips that use light instead of electricity — to move data between servers and network equipment. The startup hasn’t shipped any machines in this area yet, but says customers have validated its technology. Roughly 90% of Morphotonics’ revenue currently comes from hardware sales, with 10 to 15 systems deployed globally; the company expects to reach 50 deployments in the next two to three years, which should also increase its revenue from services.

Why it matters

The push into co-packaged optics ties Morphotonics’ display manufacturing know-how directly to the AI data-center buildout, giving a niche Dutch supplier two growth markets — smart glasses and optical networking — riding the same surge in demand.