By: Taylor Graveline

In the world of advanced technology, hardware is gaining renewed attention. While software has long dominated headlines and investor interest, a notable shift is occurring, led not by flashy apps but by purpose-built hardware addressing high-stakes challenges.

At the heart of this change is NEXT Semiconductor Technologies, a San Diego-based startup developing custom chips that enable more efficient, cost-effective solutions for industries that cannot afford to fail: space, defense, and autonomous vehicles.

A Vision Fueled by Experience and a Frustration With the Status Quo

The story behind NEXT Semiconductor Technologies begins with founder and CTO Mike Kappes, a former Broadcom engineer and the founder of IQ-Analog. However, unlike his previous ventures, which focused on technology innovation, NEXT represents a shift—one focused on product utility and real-world impact.

“I’ve steered our team’s focus away from technology as a pursuit and into leveraging technology into a revenue-generating product,” says Kappes.

That shift stemmed from identifying a gap in the market. Despite advancements in processing power and AI, hardware solutions for rapidly expanding sectors like automotive LiDAR and satellite communications (SATCOM) were still lagging, hindered by generic chip architectures and inefficient general-purpose components.

Kappes saw an opportunity to introduce custom mixed-signal chips that could potentially offer a significant improvement in both power efficiency and cost—two critical factors for industries facing extreme operational constraints.

NEXT Doesn’t Just Build Chips — It Builds the Products Around Them

Unlike many companies that focus solely on chip design, NEXT adopts a more integrated approach: designing the custom chip and the entire system it powers. This full-stack strategy provides the company with tight control over performance, power, and cost—three factors that are essential in the competitive hardware industry.

So far, this approach has led to two major projects. First is a LiDAR subsystem, designed around NEXT’s proprietary chip, created to enhance machine vision for applications like autonomous driving and advanced driver-assistance systems (ADAS).

The second is a digital beamforming phased array antenna, intended for use in on-orbit satellites. This antenna—critical for high-performance satellite communications—is usually the most power-sensitive and cost-intensive component of a satellite’s payload. By addressing performance and efficiency at the chip level, NEXT can significantly reduce operational power requirements while improving functionality and lowering costs.

“These are both markets where power efficiency and cost matter deeply,” says Kappes. “We’re not just iterating—we’re aiming to redefine what’s possible.”

From Self-Driving Cars to Satellites: Two Markets Ready for Smarter Hardware

Why is NEXT Semiconductor Technologies focusing on automotive and space? Both industries are growing rapidly and are in need of innovation in hardware solutions.

Take LiDAR, the sensor technology that helps vehicles “see” their surroundings. Many systems today rely heavily on software using general-purpose hardware to process visual data. However, this approach can be slow, power-hungry, and costly to scale. NEXT’s strategy is different: by designing chips specifically for the task, the company aims to make LiDAR systems more cost-effective, efficient, and easier to integrate into next-generation vehicles.

The same challenge exists in space technology, particularly with satellite communications. As Kappes explains, “The satellite antenna often dominates the cost of the satellite payload. When we make that antenna smarter and more efficient at the chip level, we change the economics of the satellite business.”

In essence, improving the hardware inside these systems—starting with the chips—can have a significant impact on performance and cost. As demand for satellite-based services like internet, navigation, and climate monitoring continues to grow, the need for smarter, more efficient hardware is more pressing than ever.

10X Less Power. 10X Less Cost. 10X the Opportunity.

At the core of NEXT’s value proposition is what Kappes refers to as a “new paradigm of hardware value.” In both LiDAR and space systems, where every watt saved and every dollar cut from production can influence success, NEXT’s chips are designed to deliver notable improvements in both power consumption and manufacturing costs.

These improvements are not merely theoretical. NEXT chips have been tested in defense and aerospace markets, where hardware must also withstand harsh environments and long mission lifespans, where performance and reliability are essential. Combining high performance and reliability with lower power consumption and cost is what sets NEXT apart. “There are very unique and rare teams capable of doing this,” says Kappes. “That’s what makes this such an exciting opportunity for us—and for our partners.”

Chipping Away at the Future of Defense and Space

Custom chips are increasingly becoming a cornerstone of modern defense systems. Leading players like Anduril and Kratos recognize the unique advantages that purpose-built hardware can offer—but they lack the in-house capabilities for advanced semiconductor product development, which can take years to perfect.

NEXT aims to fill that gap, positioning itself as a strategic partner to companies needing high-performance custom semiconductors for mission-critical systems. “We aspire to be a key custom chip supplier to the defense sector,” says Kappes.

The same logic applies to the commercial space sector. While companies like SpaceX and Amazon have the resources to develop proprietary chips for their spacecraft, many of their competitors don’t—and this is where NEXT sees a significant opportunity.

The Bottom Line

In a world moving toward autonomy, global connectivity, and mission-driven innovation, the infrastructure we build—and the hardware that powers it—matters. NEXT Semiconductor Technologies isn’t trying to be everything to everyone. It aims to become indispensable to a select few critical sectors that need custom chips more than ever.