Silicon Valley-based xLight has secured $40 million in new funding to develop a prototype laser that could significantly reshape the future of semiconductor manufacturing. This pioneering laser, based on the same technology powering massive particle accelerators used in national laboratories, is designed to become a core component of extreme ultraviolet (EUV) lithography machines—arguably the most advanced tools in modern chip fabrication.
With this ambitious project, xLight aims to strengthen domestic innovation in a domain currently dominated by European and Asian players, while giving the U.S. a renewed edge in the global semiconductor race.
The Technology Behind the Vision
At the heart of xLight’s project is an advanced EUV laser system designed to improve both the cost-efficiency and production capacity of semiconductor fabs—the highly specialized factories where microchips are made. EUV lithography machines are essential to producing the world’s smallest and fastest chips, which are central to emerging technologies including artificial intelligence, high-performance computing, and advanced telecommunications.
“This is the most expensive tool in the fab,” said xLight CEO Nicholas Kelez, speaking from the company’s Palo Alto headquarters. “It’s what drives the cost of the wafer more than any other tool, and it’s what drives capacity more than any other tool in the fab.”
By reducing these costs and accelerating production timelines, xLight hopes to give fabs a crucial advantage in an industry where time-to-market and chip performance are everything.
Strategic Partnerships and National Security Implications
xLight is collaborating with EUV market leader ASML, the Dutch company that currently holds a global monopoly on EUV lithography systems. Although ASML’s machines are indispensable to cutting-edge chip production, the U.S. government has made preventing their export to China a top geopolitical priority, citing national security concerns.
“This is the single most important export control the U.S. and Europe possess,” a government official remarked, underscoring the stakes involved.
China, meanwhile, has stepped up its own efforts, with Huawei-linked firms and state-backed researchers investing heavily in similar EUV laser systems. More than a dozen research papers presented at international conferences have pursued technological paths that mirror xLight’s strategy, signaling an intensifying global race.
Leaders of the U.S. startup xLight, which is developing a chip manufacturing laser, Vice President of Accelerator Systems Bruce Dunham, Vice President for Global Policy and Public Sector Partnerships Ben Purser, Vice President of Photon Systems Chris Anderson, Chief Executive Officer and Chief Technology Officer Nicholas Kelez, Chief Commercial Officer Kevin Heidrich, and Vice President of Engineering and Industrialization Andrew Burrill, stand at the offices of the venture capital firm Playground Global in Palo Alto, California, U.S. in an undated handout photo. xLight/Stephanie Cowan/Handout via REUTERS Purchase Licensing Rights, opens new tab.
Lessons from the Past, Building for the Future
Many in the U.S. semiconductor ecosystem view the 2012 acquisition of Cymer—a San Diego-based pioneer of EUV laser technology—by ASML as a major strategic misstep. That deal cemented European dominance in the EUV space, a fact not lost on industry veterans.
“There was a terrible mistake made giving Cymer the ability to become a European-owned and controlled company,” said Pat Gelsinger, former Intel CEO, current executive chairman of xLight, and general partner at Playground Global, which led the funding round.
Gelsinger emphasized that xLight’s supply chain will rely heavily on U.S. national laboratories and allied nations, an intentional move to reduce dependence on geopolitical rivals. “We can build that here, or it can be built elsewhere. China is investing heavily in this space. There’s an extraordinary backstory here that says, ‘Let’s get this one right,’” he added.
Funding the Future of Semiconductor Innovation
xLight’s $40 million financing round was led by Playground Global and supported by a mix of new and existing investors, including Boardman Bay Capital Management, Morpheus Ventures, Marvel Capital, and IAG Capital Partners. Though the company has not disclosed its valuation or an expected launch date for the prototype, the investment underscores growing confidence in U.S.-driven alternatives to a strategically vital, tightly held technology.
In a world where access to advanced chips increasingly shapes economic and geopolitical power, xLight’s vision may represent more than just a technological leap—it could be a strategic realignment.