Nvidia competitor Etched announced this week that Taiwan Semiconductor Manufacturing Company (TSM) had manufactured its first chip earlier this year. While the four-year-old startup valued at $5 billion is gearing up to ship systems powered by that chip to customers later this summer, scaling production may prove challenging. Like other chip designers, Etched must compete for limited capacity at TSMC’s Taiwan factories.
One of Etched’s early investors, Copper Sky Capital, hopes the chipmaker will find a solution to its manufacturing constraints by eventually producing chips at TSMC’s Arizona facility. Copper Sky Capital founder Jack Selby secured an allocation in part by promising to help the startup eventually reshore its chip fabrication to Arizona.
Selby, a former PayPal exec and longtime managing director to Peter Thiel’s family office, Thiel Capital, founded Phoenix-based Copper Sky in 2021. The firm’s first $115 million fund focused primarily on startups based in Arizona and the Southwest. Selby’s thesis was that most coastal startups are grossly overpriced compared to companies popping up in his region. However, Selby saw an opportunity to bridge the gap in the other direction by helping California-based hardware startups move their production to Arizona.
