What is xLight, the chip startup that has won Trump admin's support?

The Trump administration has agreed to invest up to $150 million in xLight, a startup building new chipmaking lasers, marking its first Chips Act award this term

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The Trump administration has approved up to $150 million in support for xLight, a young semiconductor startup working on next-generation chip manufacturing tools in the United States, The Wall Street Journal reported. The investment marks the administration’s latest push to strengthen critical domestic industries using government incentives.

 

Under the preliminary arrangement, the Commerce Department will provide funding to xLight through the 2022 Chips and Science Act, which sets aside money for early-stage companies with high-potential technologies. In return, the US government will take an equity stake that could make it xLight’s largest shareholder.

 

Why xLight matters to US

 

Currently, the Dutch company ASML is the world’s only supplier of extreme ultraviolet (EUV) lithography machines -- tools that cost hundreds of millions of dollars and are essential for producing the most advanced chips.

 

xLight aims to improve one crucial part of this EUV system: the high-powered lasers that burn tiny patterns onto silicon wafers. The startup wants its laser technology to be integrated into ASML’s machines, opening the door to more precise, efficient chipmaking.   

 

How xLight’s technology works

 

The startup is trying to build free-electron lasers driven by a particle accelerator. These will serve as powerful, highly precise light sources for chip fabrication plants. Each system will be massive,  about 100 metres by 50 metres, and installed outside chip fabs as a utility-scale component.

 

Executive Chairman Pat Gelsinger said the federal investment will help xLight produce its first test wafers by 2028.

 

The company is run by CEO Nicholas Kelez, a former researcher in quantum technology and US government labs. xLight raised $40 million earlier this year from investors including Playground Global, where Gelsinger is a general partner.

 

Pushing past current EUV limits

 

ASML’s leading lasers produce EUV light at a wavelength of 13.5 nanometres. xLight wants to push that down to 2 nanometres, a leap that could allow chipmakers to etch even finer features onto wafers.

 

That advance could restore the momentum behind Moore’s Law, which suggests transistor counts -- and chip power -- should double every two years.

 

“We are here to wake up Moore’s Law,” Gelsinger said, as reported by the Financial Times. “It’s been taking a nap.”

 

He added that xLight’s system could reduce energy use and improve wafer output by 30 per cent to 40 per cent.

 

“If this company that’s successful, we will change semiconductors,” he said. “We can improve the economics of today’s EUV and enable tomorrow’s EUV.”

 

Pat Gelsinger’s second act

 

xLight is led by executive chairman Pat Gelsinger, the former Intel CEO who was removed by the board after the company struggled with weak earnings and delays in manufacturing expansion.

 

“I wasn’t done yet,” Gelsinger said on Monday. “This is deeply personal to me.”

 

His return has drawn attention, especially since many current and former officials earlier criticised him for promising more than Intel could deliver while receiving large government subsidies.

 

A first award of Trump’s second term

 

The xLight deal is the first Chips Act award announced during Donald Trump’s second presidential term. The agreement is not yet final and could be revised.

 

Commerce Secretary Howard Lutnick said the partnership “would back a technology that can fundamentally rewrite the limits of chipmaking".

 

Some analysts, however, have questioned the administration’s strategy of investing directly in private companies, calling it a form of state capitalism, the news report said. Lutnick has argued that targetted support is necessary to strengthen industries crucial to national security.

 

Part of a broader US semiconductor push

 

The xLight announcement comes as the administration steps up efforts to bring advanced chip manufacturing back to the United States.

 

In October, Peter Thiel-backed startup Substrate raised $100 million to build US-based EUV-capable fabs. The Commerce Department is also pressuring major manufacturers such as TSMC to expand their American footprint.

 

Gelsinger said he first discussed xLight with Lutnick in February, before joining the company and before Lutnick’s Senate confirmation.