An AI-focused chip start-up is in talks to raise millions of pounds of funding amid an explosion in global demand for semiconductors.

Sky News has learnt that RED Semiconductor, which was set up in 2021, is seeking up to £10m to finance its path towards full production.

The company, which to date has been grant-funded, is said to have seen strong demand from prospective investors.

RED is run by James Lewis, the founder of Oxford Semiconductor and Redux, two other industry players.

It was founded by a team of experienced sector executives and so far has tapped funds from research programmes including Horizon 2020, the EU initiative which Britain has been in talks to rejoin.

The valuation at which RED Semiconductor is seeking the new money was unclear on Thursday.

On Friday, it will announce the signing of a memorandum of understanding with Crypto Quantique to develop a microprocessor chip for Edge-computing applications.

King’s coronation weighs on economy as output contracts by 0.1% in May

National debt could hit 300% of GDP by 2070s, independent watchdog the OBR warns

Hospitality chief urges Badenoch for support over energy bills crisis

Its fundraising efforts come as tens of billions of dollars are being poured into the semiconductor market, even as some of its biggest companies sound alarm bells about a shortage of skilled workers.

Driven by ongoing advances in the evolution of artificial intelligence and the Internet of Things (IoT), RED is positioning itself as the creator of more secure and powerful processors than its rivals’.

“Edge devices have two major pain points: a performance gap when it comes to applications like AI, and the need to protect information from now relentless hacking attempts,” Mr Lewis said.

UK-based ARM Holdings, which is being lined up for a US stock exchange listing, and Imagination Technologies are two of Britain’s best-known companies in the industry.

Related posts:

Branson plots $3bn merger to take Virgin Orbit on to US stock market Jaguar Land Rover swings to £302m loss as it counts cost of global chip shortages Climate, travel and tourism Rothermere on brink of £400m pension deal to take Daily Mail-owner private Don’t ask for big pay rises Bank of England governor suggests as it battles surging inflation Energy bills could see further increase in autumn, British Gas boss warns Punch-owners drink to £200m bid for pub chain Amber Taverns Musk open to ‘exceptional’ Twitter staff working from home as he outlines plans to reach one billion users BT to upgrade cost-savings target to £3bn as inflationary pressures bite Bank of England expected to unveil biggest interest rate rise since the 1980s later today BT warns of job cuts as it dials in £500m of additional cost savings Superdry hires City advisers to fashion cost-cutting plans