Southeast Asia’s semiconductor story has largely been told through fabs, assembly and testing. But as chipmakers push towards smaller, more powerful and energy-efficient devices, another part of the value chain is becoming important: the materials and manufacturing technologies that could complement silicon and help define the next generation of chips.
Singapore-based Nexstrom is betting on that opportunity. In September 2026, the startup announced a US$12 million seed round to commercialise a wafer-scale platform for two-dimensional, or 2D, semiconductor materials. Its ambition is not to replace today’s chipmaking ecosystem, but to develop materials and processes that can eventually fit into existing advanced manufacturing workflows.
We explore what Southeast Asia’s emerging ecosystems can learn from Malaysia’s next phase of digital growth
Why silicon is reaching a new engineering frontier
Silicon has driven progress in semiconductors for decades, but continued transistor scaling is becoming increasingly tough to achieve. At the tiniest dimensions, leakage, power, heat and the ability to control electrons become harder. Recent research in 2026 illustrates why 2D materials are being explored as one possible solution. They have ultra-thin channels that may help achieve better electrostatic control in tiny dimensions, potentially enabling lower power consumption and new approaches to 3D chip design. In addition, 2D materials can be used in future complementary field-effect transistor structures, though significant challenges remain around materials synthesis, contacts, dielectrics and integration.
This distinction matters because the question is not only about making a silicon transistor smaller. It is about whether new materials can allow the industry to scale up its capabilities without the need to build a whole new manufacturing ecosystem.
Nexstrom’s bet is on the manufacturing gap
Nexstrom’s announcement highlights a problem that has held back 2D semiconductors: producing high-quality material at a scale that semiconductor manufacturers can actually use. The company says its technology is designed to grow single-crystal 2D semiconductor materials at wafer scale, with the immediate goal of achieving 12-inch wafer growth on production-ready manufacturing tools. It has raised US$15 million in total funding, including US$3 million in non-dilutive funding.
The approach is significant because semiconductor manufacturers do not simply need promising laboratory devices. They need repeatable processes, uniform materials, measurement systems and compatibility with established production environments. In a September interview, Nexstrom said it had systematically scaled its technology from two-inch to six-inch wafers and was targeting an eight-inch milestone by the end of October 2026. The equipment is expected to be ready for commercial production between 2030 and 2035. These timelines demonstrate that 2D semiconductors remain a developing technology rather than an immediate replacement for silicon.
The value of fitting into existing fabs
Rather than trying to build an entirely new semiconductor manufacturing stack, Nexstrom is pursuing a strategy centred on working with existing foundries and chipmakers. That approach could prove crucial if 2D materials eventually reach commercial maturity. The semiconductor sector has invested decades building fab equipment, process knowledge and supply chains around silicon. Introducing a new material into parts of the existing manufacturing system could prove more practical than requiring an entirely new production process.
There are still substantial technical hurdles. Researchers continue to identify challenges involving wafer-scale synthesis, contacts, gate dielectrics, thermal management and the integration of both n-type and p-type devices. In other words, proving that a 2D transistor can work is very different from proving that millions of them can be manufactured reliably.
Singapore’s advantage may be the ecosystem around the chip
This is where Singapore’s semiconductor strategy becomes relevant. The city-state does not have to compete with Taiwan or South Korea on every part of chip manufacturing to capture value. In March 2026, Singapore announced S$800 million for semiconductor research and development under its RIE2030 semiconductor flagship, with a focus on areas including advanced packaging and advanced photonics. The country had also attracted more than S$30 billion in semiconductor investments between 2022 and 2025.
Its existing ecosystem includes chipmakers, equipment companies, research institutions and specialised suppliers. In June 2026, Applied Materials expanded its Singapore operations with a US$500 million manufacturing and R&D campus designed to support growing demand for semiconductor equipment driven by AI infrastructure. That environment can be valuable to a startup like Nexstrom because advanced materials technologies need more than laboratory research. They need access to engineers, equipment, foundry partners, testing capabilities and potential customers.
The opportunity for Southeast Asia extends beyond Singapore
The region does not need to replicate every part of the semiconductor value chain found in the world’s largest chip-producing economies to gain strategic significance. Malaysia, for instance, is moving beyond its established assembly and testing strengths towards IC design, advanced packaging and specialised manufacturing. Malaysia’s electrical and electronics sector secured RM28.5 billion worth of approved investments in 2025 and MIDA stated that Malaysia’s semiconductor industry is entering into a new phase of development focused on higher-value activities.
In May 2026, AIXTRON, a semiconductor equipment manufacturer, agreed to set up a new manufacturing facility in Penang. This further demonstrates how equipment and manufacturing capabilities can become part of the region’s semiconductor growth story, creating a more realistic path to value capture. Singapore can develop semiconductor materials, equipment, photonics and advanced packaging capabilities, while Malaysia can deepen design, packaging, testing and equipment manufacturing. Other Southeast Asian markets may similarly find opportunities in specialised areas such as power electronics, components, logistics and related industrial technologies.
Owning difficult pieces of the supply chain
The post-silicon opportunity should therefore not be understood as a race to build the next giant fab. It is a question of which difficult pieces of the semiconductor supply chain can be developed locally and connected to global manufacturing networks. For Singapore, Nexstrom offers an early example of what that strategy could look like: a deep-tech company working on a difficult materials problem, supported by an ecosystem that already understands semiconductor manufacturing.
The commercial outcome is still uncertain. Nexstrom’s technology still needs to progress from wafer-scale demonstrations towards a repeatable, commercially viable production process and 2D semiconductors will face competition from continued innovations in silicon and other architectures. However, the direction is significant. Southeast Asia’s semiconductor advantage might turn out to be owning the advanced technology that makes the next-generation chip possible, rather than attempting to own every stage of production.