The Trump administration has agreed to fund a company that is trying to develop more advanced semiconductors in the United States. Manufacturing technology startups are receiving funding of up to $150 million, the latest move by the government to use incentives to support strategically important domestic industries.
In a press release issued Monday, the U.S. Department of Commerce stated that under this arrangement, the Department will provide incentives to xLight; in return, the U.S. government will acquire equity in xLight, potentially becoming its largest shareholder .
xLight is a startup that is trying to improve a key chip manufacturing process known as extreme ultraviolet lithography (EUV).
Dutch company ASML ASML is currently the world's only manufacturer of EUV lithography machines, each costing hundreds of millions of dollars. xLight is seeking to improve a component of the EUV process: the crucial laser that etches complex micropatterns onto silicon wafers. xLight hopes to integrate its light source products into ASML 's machines.
xLight represents Intel, a long-established American chip manufacturer. The comeback of former CEO Pat Gelsinger. Late last year, Gelsinger was ousted from Intel by the board after Intel experienced weak financial results and stalled manufacturing expansion. He subsequently joined xLight as its executive chairman.
xLight's deal utilizes funding from the 2022 Chips and Science Act, allocated to early-stage companies with promising technological prospects. This is the first Chips and Science Act grant during Trump's second term and a preliminary agreement, meaning it is not yet finalized and is subject to change.
“This collaboration will support a technology that could fundamentally rewrite the limits of chip manufacturing,” U.S. Commerce Secretary Howard Lutnick said in a press release.
What does this mean for the semiconductor industry?
xLight has ambitious plans. The company plans to build large-scale "free-electron lasers" powered by particle accelerators to create more powerful and precise light sources for use in chip manufacturing plants. Each machine will be approximately 100 meters by 50 meters and will be a utility. Large-scale solution installation, meaning deployment outside of chip factories. Kissinger stated that this $150 million investment will help xLight achieve its goal of producing its first silicon wafers by 2028 .
xLight's CEO is Nicholas Kelez, who previously worked at a quantum computing company and a government research lab. This summer, xLight raised $40 million from investors including Playground Global, whose general partner (GP) is now Kissinger.
ASML 's most advanced lasers currently produce extreme ultraviolet light with wavelengths of approximately 13.5 nanometers. xLight's lasers aim for even more precise wavelengths, down to 2 nanometers. If the company can achieve this level of precision, it will help chipmakers etch much smaller linewidths onto silicon wafers.
This could help the semiconductor industry continue along the trajectory described by Moore's Law, which states that the number of transistors on each chip, or the chip's computing power, should double every two years.
“We are waking up Moore’s Law. It’s been dozing off,” Kissinger said. He also stated that the new technology could improve wafer processing efficiency by up to 30% to 40%, and believes that xLight’s laser consumes less energy than current light sources.
“If this company succeeds, we will change the semiconductor industry,” Kissinger said. “We can improve the economics of current EUV and empower the future of EUV.”
Latest initiatives to support U.S. strategic industries
The investment in chip startup xLight is the latest move by the Trump administration to directly invest in key companies in order to gain deep intervention in strategic industries.
Over the past few months, the Trump administration has acquired stakes in several strategic companies through direct investment, loan-to-equity swaps, and warrants, covering sectors such as semiconductors, critical minerals, rare earths, and lithium resources.
These companies include Intel (semiconductor sector), Trilogy Metals (critical minerals sector), Lithium Americas (lithium resources sector), and MP Materials (rare earth sector).
Some analysts have criticized the U.S. government's strategy of directly investing in companies like Intel, calling it state capitalism and accusing government officials of picking winners and losers. Lutnik has stated that stimulating key industries and bringing in other private sector partners is reasonable.
(Article source: CLS)
