Silicon Valley startup xLight has secured $40 million to develop the first prototype of a new class of laser designed to disrupt the global chip industry and help the U.S. reclaim leadership in a sector where China is making heavy investments.
xLight’s laser—leveraging the same technologies used in massive particle accelerators at U.S. national labs for advanced physics research—will, therefore, serve as the core component of extreme ultraviolet (EUV) lithography machines. Moreover, these EUV machines are essential tools for producing smaller, faster chips.
In an era where progress in AI and other cutting-edge technologies is dictated by how many chips companies like Nvidia can manufacture, xLight’s mission is to enable chip factories, or “fabs,” to produce dinner-plate-sized silicon “wafers” with advanced chips faster and at lower costs.
“This is the most expensive tool in the fab. It’s what drives the cost of the wafer more than any other tool in the fab, and it’s what drives capacity more than any other tool in the fab,” Nicholas Kelez, CEO of xLight, said at the company’s Palo Alto headquarters.
The development of EUV machines took the chip industry decades, and ASML of Europe, with which xLight is collaborating on its prototype, remains the sole global supplier of these systems.
The U.S. government, across multiple administrations, has consistently worked to block the export of EUV machines to China, with one official describing it as the “single most important export control” maintained by the U.S. and Europe.
In response, China has heavily invested in this field. A close manufacturing partner of Huawei Technologies, the nation’s tech champion, has claimed to have developed breakthroughs in its own EUV laser, while researchers have presented over a dozen papers at international conferences pursuing technological advancements similar to xLight’s.
U.S.-based Cymer perfected the first EUV laser technology, and ASML acquired the company over a decade ago for $2.5 billion, cementing its dominant position in the global market.
“There was a terrible mistake made giving Cymer the ability to become a European-owned and controlled company,” said Pat Gelsinger, former CEO of Intel who now serves as executive chairman of xLight’s board and is a general partner at Playground Global, one of xLight’s investors.
Many of xLight’s prototype components will come from U.S. national labs as xLight works to build a supply chain in the U.S. and allied countries.
“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,'” Gelsinger said.
The funding round was led by Playground Global, while Boardman Bay Capital Management also participated. In addition, other investors in the round included Morpheus Ventures, Marvel Capital, and IAG Capital Partners.
