US Startup xLight Is Raising $350 Million to Build a Laser That Could Break ASML's Chip-Making Monopoly

The most critical bottleneck in global chip manufacturing isn't transistors or memory — it's light. Specifically, extreme ultraviolet light, which only one company in the world produces at commercial scale: ASML. A Dutch startup founded in 1984 has accumulated a monopoly so complete that every advanced chip made by TSMC, Samsung, and Intel runs through its machines. That monopoly may now face its most credible challenger yet.

xLight, a US startup backed by Bain Capital and Boardman Bay Capital Management, is in talks to raise $350 million in a new funding round, according to The Information. The company has already secured $150 million in federal funding under the CHIPS and Science Act — the Trump administration's first CHIPS Act award — with the government taking an equity stake that could make it xLight's largest shareholder. Combined with $4.2 billion in non-binding project financing for future fabs, xLight has assembled an unusually large war chest for a company still building its first prototype.

The technology xLight is developing is fundamentally different from ASML's approach. ASML's EUV machines generate light by blasting molten tin droplets with a high-powered laser, creating plasma that emits photons at a 13.5-nanometer wavelength. The process works, but it's energy-hungry, expensive, and has been refined to near its physical limits. A single high-end ASML EUV machine costs more than $380 million and takes years to deliver.

xLight is building a free-electron laser (FEL) driven by a compact particle accelerator. Instead of plasma, FELs generate light by accelerating electrons to near-light speed through a magnetic undulator — producing a highly coherent beam that can be tuned to precise wavelengths. xLight's target: as low as 2 nanometers, compared to ASML's 13.5nm. At that wavelength, chipmakers could etch circuits far finer than what's possible today, extending Moore's Law without the exotic multi-patterning tricks currently required at 3nm and below.

The company is developing its prototype at the Albany NanoTech complex in New York, in collaboration with US national laboratories, and is targeting first silicon wafers by 2028. If the performance claims hold — a 30% to 40% boost in wafer-processing efficiency alongside lower energy demands — the technology could meaningfully change the economics of advanced chip production.

Executive chairman Pat Gelsinger, who led Intel for nearly four years before departing in late 2024, brings both credibility and political weight to the venture. During his tenure at Intel, Gelsinger was among the most vocal advocates for reducing the US semiconductor industry's dependence on foreign toolmakers. His involvement signals that xLight isn't just a research project.

The strategic stakes extend beyond cost efficiency. ASML's monopoly creates a single point of failure for the entire global advanced semiconductor supply chain. The US currently cannot manufacture its most advanced chips without Dutch lithography equipment — a vulnerability that has become a pressure point in trade negotiations and export control regimes. xLight, if successful, would reduce that exposure and give the US a domestically controlled alternative for the most sensitive chip manufacturing step.

The company's light source is not a complete lithography scanner — xLight is developing the light engine that would plug into scanners, potentially including ASML's own machines, rather than competing head-to-head with ASML's full system. That distinction matters: it lowers the barrier to adoption and means xLight could end up supplying ASML rather than displacing it.

Prototypes are still years away from commercial deployment, and particle accelerators have historically been confined to facilities like CERN — not semiconductor fabs. Making the technology compact, reliable, and manufacturable at scale is the unsolved engineering challenge. But with nearly $500 million in committed and near-committed funding, and the US government as a likely co-owner, xLight is the most serious bet yet that ASML's 40-year lock on advanced lithography can be broken.