Gelsinger-Backed xLight Secures $150M in U.S. Government Semiconductor Deal

The U.S. Commerce Department plans a major investment in a cutting-edge chip startup. Former Intel CEO Pat Gelsinger is leading the charge. The deal involves up to $150 million for xLight, a company developing revolutionary chipmaking lasers. This marks the first Chips Act award under the current administration.

The move signals a more direct government role in strategic tech. It also reignites a fierce debate about free markets versus industrial policy. According to sources like TechCrunch, the funding is not yet final but represents a major commitment.

xLight’s Ambitious Plan to “Wake Up” Moore’s Law

The investment targets a critical bottleneck in semiconductor manufacturing. Lithography, the process of etching patterns onto silicon wafers, is dominated by a single company. ASML of Holland controls the market for extreme ultraviolet (EUV) lithography machines.

xLight is pursuing a radically different approach. It aims to build football field-sized “free electron lasers” powered by particle accelerators. These machines would sit outside chip plants and provide light as a utility.

Government as Shareholder: A New Era for Silicon Valley?

This deal places the U.S. government as a meaningful shareholder in a private startup. This model is causing unease in some corners of the tech industry. California Governor Gavin Newsom recently questioned the shift away from pure free enterprise.

Pat Gelsinger, now xLight’s executive chairman, defends the approach. He argues it is necessary for national competitiveness in a critical industry. He states the government will be a minority investor without board rights or veto power.

The technology remains unproven at commercial scale. xLight targets producing its first silicon wafers by 2028. It plans to have a commercial system online by 2029. The company insists it is working collaboratively, not competitively, with industry giant ASML.

This substantial government bet on a semiconductor startup underscores a pivotal shift in U.S. industrial policy. The success or failure of xLight’s technology will have major implications for America’s tech sovereignty.

Info at your fingertips

What is xLight’s core technology?

xLight is developing massive “free electron lasers.” These machines use particle accelerators to generate extremely precise light for etching semiconductor chips. The goal is to treat high-powered light as a utility piped into factories.

How is this different from current chipmaking tech?

Today’s leader, ASML, builds the light source directly into each multi-million dollar lithography machine. xLight’s approach separates the light source, building it at a much larger scale outside the fabrication plant to potentially achieve more power and precision.

Who is leading xLight?

The startup is led by Nicholas Kelez, a physicist with deep experience building large-scale X-ray facilities at national labs. Former Intel CEO Pat Gelsinger serves as Executive Chairman and is a key advocate for the company.

Have any chipmakers agreed to use xLight’s systems?

Not yet. According to Gelsinger, no major chipmaker like Intel or TSMC has committed to purchasing the technology. However, he confirms that “intense conversations” are ongoing with all leading manufacturers.

Why is the government taking an equity stake?

The U.S. Commerce Department views advanced lithography as a critical national interest. The equity stake is structured as a minority, non-governing investment intended to ensure the company’s success and align public and private incentives.

What are the next major milestones for xLight?

The company aims to produce its first demonstration silicon wafers by 2028. Its target for a first commercial system being operational is 2029. It also plans a new fundraising round with private investors soon.