Project Foundation: Two Ukrainian Firms Target Europe's Thermal Sensor Bottleneck from Eindhoven

The bottleneck in European drone and autonomy development is not software, and it is not airframes. It is a small, unglamorous chip called a microbolometer. Every thermal camera that lets a drone see at night, through smoke, or in fog depends on one. Europe produces fewer than 500,000 of these sensors annually, while Ukraine alone consumes an equivalent volume in approximately five months euromaidanpress.com. European sensors can cost around five times more than Chinese alternatives, may offer lower quality in some cases, and are difficult to obtain because of high demand euromaidanpress.com.

That gap is what two Ukrainian companies are now trying to close, from a headquarters in the Netherlands.

What Was Announced

On October 9, 2026, The Fourth Law and Odd Systems unveiled Project Foundation, a semiconductor initiative to mass-produce uncooled thermal sensors in Europe and the United States tech.eu. The project aims to expand European thermal sensor production to four times its current level and US production to twice its current level within three years, building a new industrial base for both defence and civilian applications 2 sources.

The primary mission is to secure thermal sensor sovereignty for Europe and the United States by developing proprietary uncooled long-wave infrared (LWIR) sensors, also known as microbolometers, and the capacity to manufacture them at scale en.interfax.com.ua. These are the key component inside thermal imaging cameras that enables detection of heat signatures in darkness, smoke, and other low-visibility conditions. Such systems are widely used in military drones, targeting devices, reconnaissance equipment, and other robotic platforms united24media.com.

The project is structured around two production sites. The companies plan to establish First Foundation in Europe and Second Foundation in the United States, with headquarters in Eindhoven, the Netherlands tech.eu. Mass production is targeted to start in 2027 tech.liga.net.

Project Foundation plans to finance development through investment from The Fourth Law and Odd Systems, external equity, debt financing, grants, and customer pre-sales en.interfax.com.ua. No aggregate funding figure has been disclosed. The companies note interest from investors and partners, but state that financial agreements will be announced after they are finalised en.interfax.com.ua.

Who Is Behind This

The founding team matters here because this is not a research spinout pitching an idea. Serial entrepreneur Yaroslav Azhnyuk and a team of engineers, operators, and veterans founded The Fourth Law and Odd Systems in Kyiv in 2023, with operations across Ukraine, the rest of Europe, and the United States united24media.com. The founding team brings 14 years of camera development experience, including work on more than one million consumer smart cameras euromaidanpress.com. That prior company was Petcube, a Y Combinator-backed consumer camera hardware firm. The jump from Petcube to wartime drone optics to sovereign chip manufacturing is not a pivot made in a conference room. It is the direct output of supplying hardware into the highest-tempo test environment on earth.

The Fourth Law develops scalable autonomy for robotic systems, with an initial focus on defence, building technologies that enable drones to continue their missions when communications are disrupted thedefensenews.com. Odd Systems develops and manufactures thermal and daytime cameras for drones and other robotic systems. Its Kurbas thermal camera is the most widely used Ukrainian-made thermal camera on the battlefield, supplied to more than 70 drone manufacturers, giving Project Foundation direct insight into customer requirements and high-volume production at scale 2 sources.

The CEO appointed to run the new manufacturing entity is Igor Nakonechnyi, who holds a doctorate in semiconductor chemistry tech.eu. The project's network will have a shared technological base and its own sensor designs, with technology partnerships established with global laboratories in semiconductors and microbolometers, as well as with thermal imaging camera users worldwide en.interfax.com.ua. The pairing of a battle-proven camera business with a semiconductor PhD running a dedicated entity in Eindhoven is a serious structural choice, not a press release.

Why the Supply Gap Is Structural, Not Cyclical

The demand shock is not going away. The EU has already had to confront this problem in a direct way. Ukraine secured an exception permitting Chinese parts purchases worth up to 6 billion euros, drawn from the EU's 60 billion euro defence loan, explicitly for cases where no European alternative exists europeanbusinessmagazine.com. It is the first such carve-out granted under the programme, and it arrived in the same year that Brussels made reducing dependence on Chinese supply chains a headline strategic goal.

A RUSI drone supply chain report from November 2025 made the structural dimension explicit: China has placed restrictions on germanium exports used for thermal sensors, and the challenge of mass-producing hover-optimised and FPV drones has revealed systemic vulnerabilities in the West stemming from heavy reliance on Chinese-origin rare earth elements static.rusi.org.

The microbolometer market as a whole is assessed at 513.6 million dollars in 2026 and is projected to reach 1,058.6 million dollars by 2036 factmr.com. But in the context of European drone manufacturing volume, what matters is not market size. It is unit availability, price per sensor, and lead time. On all three dimensions, China currently holds a structural advantage that no amount of policy intent removes without manufacturing capacity on the ground.

The Eindhoven Choice Is Deliberate

Eindhoven is the home base of ASML and a dense ecosystem of precision engineering, materials science, and semiconductor process expertise tech.eu. Locating a microbolometer initiative there is not branding. It is access to process engineers, cleanroom supply chains, and proximity to European chipmaking infrastructure. The choice also places Project Foundation within reach of Dutch and EU grant instruments, including the European Chips Act's capacity-building mechanisms, which explicitly target sovereign semiconductor production.

Plans for a dedicated facility are not new within the Odd Systems orbit. The production facility concept first emerged in February 2026, when Odd Systems said the future plant could eventually manufacture as many as one million sensors annually oboronka.mezha.ua. The October 9 announcement formalises that ambition as a named joint venture with a defined CEO, two identified sites, and a 2027 production target 2 sources.

The Dual-Use Angle

The founders have been deliberate about not framing this as a pure defence play. The initiative aims to deliver cost-effective sensors for drones, cars, factories, and robots through a combination of partner foundry lines and planned dedicated facilities united24media.com. That dual-use positioning is commercially rational. A sensor business that can only sell to defence ministries will struggle with volume and procurement timelines. One that sells into automotive ADAS, industrial inspection, and robotics simultaneously can build the volumes that drive unit cost down, which then feeds back into defence affordability.

This project will create a new industrial base for defence and civilian needs and provide drone, automotive, and robotics manufacturers with affordable sensors. en.interfax.com.ua

For Founders

If you build anything that needs thermal imaging, this announcement is the most important European supply-chain signal of the month. Here is what it means in practice.

The bottleneck will ease, but not yet. The first sensors under this initiative are expected in 2027 tech.liga.net. Until then, the pricing and availability problem is unchanged. If your roadmap depends on Western-sourced LWIR sensors at volume, you need a bridging plan through 2026 and into 2027. That means qualifying multiple suppliers now, including the Kurbas camera from Odd Systems itself, rather than waiting for Project Foundation's output.

Watch the grant instrument angle. Project Foundation's financing structure explicitly includes grants alongside equity and debt en.interfax.com.ua. The European Chips Act and national semiconductor programmes in the Netherlands and Germany are the most likely sources. If you are building a drone, robotics, or autonomy system that relies on LWIR sensors, a formal customer relationship with Project Foundation strengthens both your supply resilience and your narrative in any EDF or EUDIS application. Defence-sovereign component sourcing is increasingly a scoring criterion in European funding rounds.

Dual-use positioning is not a compromise here, it is the strategy. The project's decision to serve automotive and industrial robotics alongside defence is not scope creep. It is the mechanism for achieving the volumes that make defence-grade pricing competitive. Founders building platforms with thermal payloads should model their sensor costs against a 2028 scenario where Western microbolometer production has materially increased. The addressable market for high-autonomy, low-cost thermal systems expands significantly if the sensor cost drops from roughly five times the Chinese price toward parity euromaidanpress.com.

The Eindhoven location opens specific doors. If you are looking for a European semiconductor partner, co-development arrangement, or supply agreement, Project Foundation is now a named entity with a CEO, a defined technology roadmap, and stated openness to partnerships 2 sources. The announcement notes existing technology partnerships with global semiconductor laboratories and camera users. Early customer relationships from ventures that bring volume commitments will be relevant to the project's financing round, which has not yet closed.

The structural argument for European thermal sensor sovereignty is now a commercial one, not just a strategic one. The EU exception permitting Chinese component purchases was a pragmatic response to near-zero domestic supply europeanbusinessmagazine.com. Project Foundation is the private-sector answer. Ventures that position themselves as offtakers, co-developers, or integration partners in a Western sensor supply chain are building on a problem that European governments and procurement bodies have already acknowledged they cannot solve with policy alone.