Research Note: Diraq
Recommendation: Buy
Corporate
Diraq emerged from stealth in 2022 as the culmination of two decades of research into building quantum processors using electron spins in CMOS quantum dots, led by founder and CEO Andrew Dzurak, a key figure in silicon quantum computing. The company has secured approximately $120 million in total funding, including research funding from Australian and US government programs, with their most recent Series A-2 round of $15 million led by Quantonation in February 2025, followed by an additional $7 million extension in June 2025. Headquartered in Sydney, Australia, with labs at UNSW, Diraq has established itself as a global leader in silicon quantum dot technology, leveraging existing semiconductor manufacturing processes to create scalable quantum computers. Their strategic approach focuses on developing fault-tolerant quantum computers using standard CMOS manufacturing techniques, aiming to place billions of qubits directly on silicon chips. In February 2024, Diraq opened a new state-of-the-art commercial quantum computing laboratory at UNSW Sydney, demonstrating their commitment to advancing practical quantum computing capabilities. The company has built a strong intellectual property portfolio with 11 patent families covering their core technology. Their recent achievements include demonstrating 99.9% single qubit control fidelity using industry-standard CMOS materials on 300mm silicon wafers, marking a significant milestone in their development roadmap.
Market
Diraq operates in the rapidly evolving quantum computing hardware market, specifically targeting the development of scalable, silicon-based quantum processors. The company's unique approach leverages existing semiconductor manufacturing infrastructure, positioning them to potentially benefit from over 50 years and trillions of dollars invested in the semiconductor industry. Market projections suggest the global quantum computing market could reach $14 billion by 2027, growing at a CAGR of 48.5%, presenting significant opportunities for companies that can deliver practical quantum computing solutions. Their focus on using standard CMOS manufacturing processes provides a clear path to scaling quantum computing capabilities while potentially reducing production costs compared to competing approaches. The company has secured strategic partnerships, including collaboration with Q-CTRL for quantum control solutions and relationships with major semiconductor foundries. External validation through government funding and partnerships, including defense-related support, demonstrates confidence in their technological approach. Their recent technical achievements, including demonstration of 99.9% qubit control fidelity, position them favorably in the race to achieve practical quantum advantage. The market for quantum computing hardware continues to attract significant investment, with Diraq's approach representing a potentially disruptive path to scalable quantum computing.
Product
Diraq's core product is a silicon-based quantum computing platform that aims to deliver end-to-end quantum computing capabilities as a full-stack, cloud-accessible service. Their quantum processors use proprietary CMOS quantum dot technology, developed over 20 years of research, which enables the creation of quantum bits at the same scale as traditional transistors. The company's technology has demonstrated record control accuracy of 99.9% for quantum bits manufactured using industry-standard CMOS materials on 300mm silicon wafers. Their architecture is designed to scale to billions of qubits on a single chip, with processors that can fit in a single refrigerator rather than requiring warehouse-scale facilities. In June 2024, Diraq announced successful demonstration of their technology using standard semiconductor foundry infrastructure, marking a crucial step toward commercial viability. The platform includes capabilities for both single and two-qubit operations, with recent achievements in two-qubit gate fidelity exceeding 99%. Their product roadmap includes milestones for increasing qubit counts while maintaining high fidelity operations, with clear technical objectives for achieving fault-tolerant quantum computing.
Strengths
Diraq's primary strength lies in their unique approach to quantum computing that leverages existing semiconductor manufacturing infrastructure, potentially enabling faster scaling and lower production costs than competing approaches. Their silicon quantum dot technology has demonstrated impressive performance metrics, including 99.9% qubit control fidelity using industry-standard CMOS materials. The company's intellectual property portfolio, comprising 11 patent families, provides strong protection for their core technology and potential competitive advantages. Their leadership team brings deep expertise in silicon-based quantum computing, with CEO Andrew Dzurak being a recognized pioneer in the field. The company has secured significant funding and strategic partnerships, including government and defense-related support, providing resources for continued development. Their approach to quantum computing offers potential advantages in terms of scalability and integration with existing semiconductor manufacturing processes. Recent technical achievements, including successful foundry production of quantum devices, demonstrate practical implementation capabilities. Their focus on fault-tolerant quantum computing addresses a critical need in the industry for reliable, error-corrected quantum systems.
Weaknesses
Despite strong technical progress, Diraq faces challenges in scaling their technology from current demonstration systems to the promised billions of qubits. The company's reliance on CMOS manufacturing processes, while advantageous for scaling, may present unique challenges in maintaining quantum coherence and control at larger scales. Their funding of $120 million, while substantial, is relatively modest compared to some competitors in the quantum computing space who have secured billions in investment. The company's current focus on technology development means revenue generation may be limited in the near term, requiring continued external funding support. As a relatively new entrant in the quantum computing market, Diraq must build market awareness and establish their brand against better-known quantum initiatives. Their approach to quantum computing, while promising, remains unproven at the scale required for practical quantum advantage. The timeline to commercial deployment of their technology remains uncertain and dependent on achieving multiple technical milestones. The company's geographic location in Australia, while offering advantages in terms of research partnerships, may present challenges in accessing global markets and talent.
Client Voice
Early feedback from industry partners and stakeholders has been positive, with particular emphasis on the potential scalability of Diraq's approach to quantum computing. Will Zeng, partner at Quantonation who joined Diraq's board following their recent investment, noted the significance of their development roadmap and technical achievements. The company's partnerships with research institutions and government agencies indicate confidence in their technological approach from sophisticated stakeholders. Their collaboration with Q-CTRL demonstrates interest from established quantum technology companies in integrating with their platform. While specific client testimonials are limited due to the early stage of their technology, technical achievements such as 99.9% qubit control fidelity have been well-received by the quantum computing community. The company's success in securing additional funding and partnerships suggests strong confidence from investors and industry partners in their approach to quantum computing. Feedback from semiconductor industry partners indicates interest in the potential for leveraging existing manufacturing infrastructure for quantum computing. Academic and research partners have highlighted the potential impact of their technology on the field of quantum computing.
Bottom Line
Diraq represents a compelling investment opportunity in the quantum computing sector, with their unique approach to leveraging existing semiconductor manufacturing infrastructure potentially offering a more scalable path to practical quantum computers. Their recent technical achievements, including 99.9% qubit control fidelity and successful foundry production, demonstrate meaningful progress toward their goals. The company's strong intellectual property position and deep technical expertise provide a solid foundation for continued development. Their focus on fault-tolerant quantum computing addresses a critical need in the industry, while their approach to leveraging existing semiconductor infrastructure could accelerate commercialization. Despite facing competition from better-funded rivals, Diraq's differentiated technology approach and recent achievements suggest significant potential for capturing value in the quantum computing market. Their progress in demonstrating key technical capabilities, combined with strong strategic partnerships and government support, positions them well for continued development toward practical quantum computing systems. The company's focus on scalability and integration with existing semiconductor manufacturing processes could provide significant advantages in terms of cost and time to market. For investors interested in quantum computing, Diraq offers exposure to a potentially disruptive approach to quantum processor development with clear technical milestones and commercialization strategy.