Proxima Fusion is betting on a critical ingredient for its fusion reactors: superconducting tape.

Proxima Fusion said Wednesday it plans to build a €140 million ($162.6 million) factory to produce fusion-grade high-temperature superconducting (HTS) tape, which will provide the startup with key component to its reactor design.

The move comes months after Proxima raised €411 million in a round that catapulted the company up the ranks of the best-funded fusion startups. The Germany-based fusion startup plans to use a mix of public and private funding to complete the factory, with the state of Lower Saxony chipping in €21 million. 

Proxima will use HTS tape to generate powerful magnetic fields to contain the plasma required to spark fusion reactions. 

The startup’s demonstration plant will use 20,000 kilometers of HTS tape, while its commercial power plant will need twice as much. Today, the vast majority of HTS tape is made in China and Japan.

HTS tape emerged a little over a decade ago as one of the fundamental breakthroughs that enabled the current generation of fusion power startups. Because it can generate strong magnetic fields at relatively high temperatures, HTS tape enables smaller and more efficient reactor designs.

While fusion power is expected to consume a large portion of the world’s HTS tape production, other companies like Veir are using it to boost the efficiency and power density of data centers.