- Tel Aviv-based blockchain chip startup Chain Reaction is developing a next-generation chip.
- The new chip will implement fully homomorphic encryption, enabling computation on encrypted data.
- The company aimed to begin mass production of its existing chip in the first quarter of 2023 and plans to release the new encrypted-computation chip by the end of 2024.
Chain Reaction, an Israeli startup focused on hardware for secure blockchain and cryptography applications, has raised $70 million to accelerate development of its next-generation chip. The capital will be used primarily to expand the engineering team and accelerate design, testing, and production efforts for the new device.
Company CEO and co‑founder Alon Webman described the forthcoming product as a fully homomorphic encryption (FHE) chip. FHE enables computations to be performed directly on encrypted data, so the data never needs to be decrypted while being processed. According to Webman:
“Today, if your data is encrypted in the cloud, you must decrypt it to perform operations, analytics, or run AI. That decryption step exposes data to risk.”
He emphasized that many organizations and industries avoid cloud-based processing because decrypting data creates vulnerability: once decrypted, data can be read, stolen, or altered by malicious actors. The FHE-capable chip aims to remove that vulnerability by allowing secure processing without exposing plaintext data.
Accessing data while encrypted
By enabling computation on encrypted data, the new chip promises to broaden the range of workloads organizations will feel comfortable running in untrusted environments or public clouds. Chain Reaction plans to launch the FHE chip by the end of 2024, with work already underway on both the architecture and the specialized hardware needed to implement homomorphic operations efficiently.
Separately, Chain Reaction has been preparing for broader adoption of its current product, the Electrum chip. Electrum is designed for fast, efficient hashing and targeted at blockchain infrastructure and high-performance cryptographic tasks; it can also be adapted for cryptocurrency mining applications. The company sought to begin mass production of Electrum in the first quarter of 2023 to meet demand from data centers and specialized miners.
Chain Reaction joins several other firms exploring hardware for blockchain and crypto workloads. Large semiconductor and technology companies have also invested in specialized chips for distributed ledger and mining use cases, reflecting industry demand for high-throughput, energy-efficient cryptographic processing. Chain Reaction’s focus on integrating homomorphic encryption into dedicated silicon represents a significant step toward making encrypted computation practical and widely available.