CEO Interview with Faraj Aalaei of Cognichip

Faraj Aalaei is a successful visionary entrepreneur with over 40 years of distinguished experience in communications and networking technologies. As a leading entrepreneur in Silicon Valley, Faraj was responsible for building and leading two semiconductor companies through IPOs as a founder and CEO.

Post acquisition of Aquantia by Marvell Technology, Faraj was responsible for Marvell’s billion-dollar Networking and Automotive segment. Prior to his successful entrepreneurial journeys at Aquantia and Centillium communication, he worked at AT&T Bell Laboratory, Fujitsu Network Communication and MA/Com.

Tell us about your company?

Cognichip represents a new era in semiconductors — one that makes chip design easier, faster, and more accessible. Our mission is to reshape the economics of the sector and elevate intelligence as our new scaling factor.

If you look back to the early 2000s, there were nearly 200 VC funded semiconductor startups launching each year in the US. By 2015, the number had dwindled down to just a few. AI brought some revitalization in the sector yet, still, since 2015 many AI hardware startups have struggled to scale and IPOs remain rare.

Now, I am a two-time semiconductor IPO CEO with 40+ years of experience and led Marvell’s billion dollar Networking and Automotive segment. I’ve also invested in over 40 companies in recent years as a VC – none of them in semiconductors.

Why? These days, it takes $200M+ to build a semiconductor company. It takes a long time to get to revenue ramp and most importantly from an investor perspective, you’re in the deal with over half of that before you know if you even have something. Most VCs stay away because it’s hard to make money in a market like that, especially early VC investors who are typically the experts in that vertical.

I founded Cognichip to change all that – with a team of experts from Amazon, Google, Apple, Synopsys, Aquantia, and KLA with deep expertise in semiconductors, AI, and technology development. Last year, we raised $33M from investment from Mayfield, Lux Capital, FPV, and Candou ventures to create the first Artificial Chip Intelligence (ACI®) for designing semiconductors.

Artificial Chip Intelligence – What is that? What problems are you solving?
ACI® is to the semiconductor industry what AGI is to the broader AI space – a type of artificial intelligence that understands, learns, and applies knowledge across a wide range of chip design tasks, with designer-like cognitive abilities.

Fundamentally, Cognichip aims to solve two major challenges in chip design: reducing development costs and reducing time to market which will lead to democratizing access to chip design at large scale.

Chip design is slow, expensive, and highly specialized. It can take 3-5 years to go from design to production, introducing significant risk, inefficiency, and high energy consumption. The whole process requires over $100M in capital, and is often limited to regions where a broad set of chip experts in knowledge verticals are available. Over 87% of headcount budgets for semiconductor companies are spent on core experts in design, verification and bring up.

Additionally, access to talent has become exceedingly difficult. It’s no secret that the semiconductor industry faces a severe talent shortage, with an estimated need for 1 million more engineers by 2030. If you look in the last 25 years, the industry has grown in lock-step with its workforce – roughly 7% CAGR. Traditional scaling methods rely on increasing the workforce, but that is no longer sustainable.

With the rise of AI, we have a unique opportunity to modernize semiconductor development—making it faster, more cost-effective, and accessible to a broader range of innovators. Without this transformation, the U.S. semiconductor industry risks falling further behind.

What application areas are your strongest?

We are focusing on fundamentally rethinking the traditional “waterfall” model of chip design. It is the result of 1990s CAD methodologies that require “perfect” requirements and make it very difficult and expensive to react to errors and changes. Cognichip’s Artificial Chip Intelligence will actually flip this model to a compute-centric environment where design abstractions evolve concurrently and requirements are dynamically updated and tested. This shift will bring profound change on architectural exploration, microarchitecture definition, RTL design, verification and more.

This fundamental rethink will help…
Large companies to improve efficiency, “do more with less”
Mid-size companies to be able to enter new markets, currently inaccessible due to capital or expertise constraints
Startups and even individual innovators start imagining how to bring a chip into their niche market, effectively democratizing this important industry

What keeps your customers up at night?

There are four constraints on the semiconductor sector, all arising from the fact that it takes 2-3 years from concept to first samples, and another 12-18 months to reach production with a new chip:
1 Long capital commitments – Spending $100M+ before reaching production
2 Resource constraints – Dependence on multiple, and often narrow expertise (e.g. DSP, Switching, Processor), while combating the global shortage of engineers
3 Market-fit risk – Anticipating market shifts introduces excessive chip bloating, adding size, power
4 Rigid supply chains – Complex chips are designed for specific manufacturers, only possible in limited geos

Cognichip’s ACI® will alleviate these constraints, allowing teams to design fast and smarter – even without deep semiconductor experience.

What does the competitive landscape look like and how do you differentiate?

AI offers exciting opportunities and we do see a growing ecosystem of AI-enabled EDA tools, new startups adding their own pieces of the puzzle, and AI-savvy customers, such as hyperscalers, that are applying their deep know-how to chip design steps that are closely tied to their architectures.

At Cognichip, we’re carving out a new lane, with our aspiration to achieve ACI®. We are not looking at incrementally improving these existing spaces, rather we are driving towards an “OpenAI-like” moment for semiconductors that will set a new industry standard.

Which brings me to another yet critical differentiator; talent. Scientists and top engineers are interested in working on hard problems. That’s what we get satisfaction from. We have hired Olympiad gold-medal winners in mathematics and physics, as well as veterans in the chip and software industries. Our management team are experts in the end market, customers, and pain points. We have a market proven successful track record of focused execution and success. We also have been fortunate enough to get the highest quality investors backing and advising the company.

What new features/technology are you working on?

While we’re not announcing product details or timelines at this time, our ACI® technology is built on a first-of-its-kind physics-informed foundation model, purposely built for chip design tasks. It combines physics and logic training, enabling deep navigation of the design search spaces. ACI® transforms serial, human-centric design processes to concurrent, massively parallel, autonomous workflows, enabling today’s engineers to become architects while the computer becomes the designer.

How do customers normally engage with your company?

We just launched out of stealth in May and we have been working on our technology innovations for over a year. We are engaging with leaders that align with our mission to make design easier, less costly, and more accessible. We know there is a lot of interest, and we’ll share more when the time is right. Stay tuned!

Contact Cognichip

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CEO Interview with Yannick Bedin of Eumetrys

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