Silicon Valley-based U.S. startup xLight has raised $40 million in funding to begin developing a prototype of a new-generation laser used in chip manufacturing. This laser technology has the potential to significantly transform the global semiconductor industry and help the U.S. reclaim its position in the race against China.
The laser being developed by xLight is based on advanced technologies used in massive particle accelerators found in U.S. national laboratories. These lasers are central components of “extreme ultraviolet” (EUV) lithography machines, which are critical for manufacturing the most advanced chips. EUV technology allows for the production of smaller, faster, and more powerful semiconductor chips.
Semiconductors: Crucial to global technology
The rapid development of the semiconductor industry plays a critical role in the advancement of high-tech fields such as artificial intelligence (AI). As long as companies like Nvidia and other major chipmakers can supply these chips, progress in AI and related sectors continues. xLight aims to help chip factories (known as “fabs”) manufacture semiconductor wafers faster and more cost-effectively.
xLight’s CEO and CTO, Nicholas Kelez, stated that EUV laser systems are the most expensive tools in fabs, and they determine production capacity more than any other equipment. Therefore, any innovation in this field can significantly impact both productivity and overall manufacturing costs.
A strategic move in the U.S.-China technology race
Although EUV machines have taken decades to develop, Dutch company ASML is currently the only supplier in the world. ASML is collaborating with xLight to develop the prototype. The U.S. government, across several administrations, has implemented strict export controls to prevent EUV machines from being sent to China—considering this one of the most crucial export control policies shared by the U.S. and Europe.
In response, China has been rapidly investing in this area. Huawei’s close manufacturing partner has announced progress in developing its own EUV laser, and Chinese researchers have presented numerous papers at international conferences exploring technological paths similar to xLight’s.
Learning from past mistakes
Pat Gelsinger, former CEO of Intel and currently executive chairman of xLight’s board, emphasized that allowing U.S.-based Cymer—which first developed EUV laser technology—to become a European-owned company was a major strategic mistake. To correct this, xLight is working with national laboratories and building a supply chain across the U.S. and allied countries to develop its equipment domestically.
“We can build this here, or it can be built elsewhere. China is investing heavily in this space. There's a big story behind this that says: ‘Let’s get this one right,’” said Gelsinger.
Investors and partnerships
xLight’s latest funding round was led by Playground Global, with additional participation from Boardman Bay Capital Management, Morpheus Ventures, Marvel Capital, and IAG Capital Partners.
