Fusion Startups Explore the Magnet Business

Earlier this month, Commonwealth Fusion Systems (CFS) announced an agreement with Type One Energy. The deal gives Type One an exclusive license to use CFS’s high-temperature superconducting (HTS) cable technology to develop its own stellarator fusion magnets, plus access to CFS's expertise in magnet manufacturing. 

This isn’t the first time Commonwealth Fusion Systems has marketed its HTS magnet systems. It previously shipped completed magnets, along with cooling and software control systems, to the University of Wisconsin to support an experimental reactor funded by the federal ARPA-E program. CFS hasn’t disclosed the amount the university paid for its magnets.

CFS isn’t the only fusion startup looking to commercialize its HTS expertise. In September 2024, Tokamak Energy announced a separate business unit, TE Magnetics, with the same goal. TE Magnetics offers solutions across the HTS value chain, from modeling and prototyping to large-scale manufacturing.

It might be a while before these new business lines find commercial success. CFS hired its Head of Magnet Business about four years ago, and though “a number of other companies” have approached CFS, there’s been little in the way of public announcements or press releases around new partnerships. One challenge is the long procurement cycle, as customers need time to understand the technology and how to incorporate it into existing infrastructure. There are also several incumbents in the HTS manufacturing segment with a significant head start over these fusion startups.

That said, the market appears large enough to support new entrants, with forecasted demand for HTS material expected to reach $6.4 billion by 2030. The magnets developed by CFS and Tokamak Energy could be used in diagnostic and therapeutic medicine, including MRIs and proton beam therapy machines. HTS materials can also improve the efficiency of renewable energy devices like wind turbines and could support grid stability through energy storage. 

Two Schools of Thought

A common criticism of these spin-off initiatives is that they divert attention and resources from the primary goal of advancing fusion energy itself. Conventional startup wisdom posits that the entire team needs to be laser-focused on the core mission if the company is to have any chance of success. The argument is that because of capital, time, and staffing constraints, startups don't have the luxury to do anything else but focus.

Advocates for these new business lines, however, might argue that some of those traditional constraints don’t apply to companies like CFS, which has raised over $2B in funding and is operating on a multi-decade timescale. From this point of view, fusion startups are wise to monetize their magnets while continuing to build prototypes. It’s possibly a way to scale with less capital, extending runway and making the core business more attractive to investors. And with many private fusion projects not slated to achieve meaningful results until the 2030s (or later), diversifying and realizing revenue today helps these startups stay alive and keep fighting for the long haul.