Trump administration to invest $150 Million in a chip laser startup

The Trump administration has reached a preliminary agreement to take an equity stake in xLight, a startup developing free-electron laser technology intended to support faster semiconductor production.

The U.S. Department of Commerce said on Monday that the government plans to invest as much as $150 million in xLight. The department did not disclose details about the size of the stake or timing of the investment.

The funding proposal was outlined in a non-binding letter of intent from the CHIPS Research and Development Office. The agreement represents the office’s first planned investment since the Trump administration assumed control of a $7.4 billion semiconductor research institute established during the Biden administration.

Free-electron laser development has gained attention as chipmakers seek tools capable of supporting more advanced lithography. Modern chip manufacturing relies on extreme ultraviolet lithography machines that imprint circuit patterns onto silicon wafers. ASML of the Netherlands remains the only company that produces such systems. Several U.S. startups, including Substrate, are attempting to create competing equipment.

Commerce officials said the most complex component of these lithography machines is the laser source. XLight aims to develop a new type of laser that draws on particle-accelerator technology. The company said the approach could reduce power consumption compared with existing commercial laser systems. XLight is working with U.S. national laboratories to build a prototype that could operate with lithography tools made by ASML or emerging rivals.

Secretary of Commerce Howard Lutnick said the planned investment supports a broader effort to rebuild U.S. capabilities in advanced lithography. In a statement, he said the United States had allowed leadership in the field to shift overseas but that the administration intends to reverse that trend.

XLight has also expanded its leadership team. Former Intel chief executive Pat Gelsinger joined the company as executive chairman in March. Gelsinger previously led Intel’s efforts to strengthen domestic semiconductor manufacturing and has long been involved in industry research efforts.

The proposed investment remains subject to final approval and further negotiations between the government and the company.