In May 1999, a group of engineers from Intel and Galileo Technology gathered in a city
in northern Israel called Yokneam Illit and started a company. One of them was Alon Webman,
a Technion graduate in electrical engineering with five years of industry experience and a
specific conviction: high-speed networking needed custom silicon. That company became Mellanox Technologies.
Webman spent the next 19 years at Mellanox - through the dot-com crash, the rise of data centers,
the InfiniBand and Ethernet networking wars, and the moment Mellanox became one of the most important
networking chip companies in the world. He held a succession of VP roles: Silicon Engineering,
Business Development Technology, Engineering for Switch Products. He watched the team go from
a small Israeli garage to a publicly traded company on NASDAQ.
Then in 2020, NVIDIA acquired Mellanox for $6.9 billion. It was one of the largest semiconductor
acquisitions in history. Webman had already left in 2018 - and the company he'd just co-founded
with his Technion classmate Oren Yokev was barely six months old.
Chain Reaction was built in stealth. For almost four years, the company raised money, hired talent,
and built chips without public announcement. They quietly assembled a team of veterans from Nvidia,
Mellanox, Intel, TSMC, and Israeli intelligence. By the time they emerged in February 2023 with a
$70 million Series C led by Morgan Creek Digital, they had already raised $115 million in total -
all while most of the startup world had no idea they existed.
The reason for the silence was partly the nature of the work. Semiconductor development moves in
multi-year cycles. The market window for a new chip architecture can close before you ever tape out.
Webman's bet was specific: the world's data infrastructure was about to hit a wall around privacy,
and the only way through it was purpose-built silicon.
Fully homomorphic encryption - FHE - is the kind of technology that sounds made-up until someone
builds it into hardware and ships it. The concept is disarmingly simple: perform computations
on encrypted data without ever decrypting it. The cloud runs the model, returns the result,
and never sees the underlying data. It has been theoretically possible since 2009.
It has been computationally impractical until now.
Chain Reaction's 3PU (Privacy Processing Unit) delivers million-times performance improvements
over standard CPUs for FHE workloads. That number isn't a marketing multiple - it reflects
how badly general-purpose processors perform on the number-theoretic transforms at the core
of FHE. The 3PU is designed around these specific mathematical operations, the same way
a GPU is designed around parallel floating-point math.
The target markets are predictably large: financial services, healthcare, defense, government,
oil and gas. Any domain where regulatory requirements create a hard wall between data utility
and data privacy. FHE dissolves that wall - if you can run it at speed. Chain Reaction's
argument is that speed now exists.
Webman has been direct about the economics. "Privacy is the longer play." The FHE market,
while enormous in potential, requires enterprise sales cycles and regulatory tailwinds to develop.
Bitcoin mining is cash flow today.
Chain Reaction's EL3CTRUM product line was launched in May 2023 as the most efficient
SHA256 ASIC platform on the market at the time - 19 J/TH at 140 TH/s. The follow-up,
EL3CTRUM E31, announced in October 2025, moves to 3nm fabrication with three cooling variants:
air (310 TH/s at 11.2 J/TH), hydro (880 TH/s at 9.9 J/TH), and immersion (396 TH/s at 11.0 J/TH).
Volume shipments are scheduled for Q3 2026, with 2nm designs already in development for 2027.
The strategic logic is elegant. TSMC is Chain Reaction's sole manufacturing partner -
the same foundry that makes Apple's silicon. Running a high-volume Bitcoin mining product
deepens that manufacturing relationship, improves yields, and funds the longer-timeline
privacy processor program. The same team that designs Bitcoin ASICs builds expertise
directly applicable to FHE accelerators.
