U.S. Finalizes $150M CHIPS Award for xLight to Advance Next-Generation EUV Lithography

Key Takeaways

• xLight finalized a $150 million award under the CHIPS and Science Act and became the first completed R&D investment award from the Trump administration's CHIPS Research and Development Office.
• xLight is developing a free-electron laser (FEL) platform to replace the laser-produced plasma (LPP) light sources currently used in ASML's EUV lithography systems.
• Pat Gelsinger, former CEO of Intel and now Executive Chairman of xLight, has stated the technology could deliver tenfold efficiency improvements over current EUV light sources and increase wafer output by 30–40%.

The U.S. government has finalized a $150 million investment in xLight, a semiconductor technology startup developing a new light source for advanced chip manufacturing, marking the first completed research and development award under the current administration’s CHIPS Act program.

The funding will support the development of a free-electron laser (FEL) system designed to generate extreme ultraviolet (EUV) light, a critical technology used to manufacture the world’s most advanced semiconductors.

The award was issued through the CHIPS Research and Development Office, part of the National Institute of Standards and Technology (NIST). In return, the U.S. government will receive an equity stake in xLight rather than providing the funding as a traditional grant.

The investment reflects growing U.S. efforts to strengthen domestic capabilities in semiconductor manufacturing technologies, particularly in areas where the industry relies heavily on a small number of suppliers.

EUV lithography is one of the most important processes in advanced chip production, enabling manufacturers such as Intel, Samsung, and TSMC to produce leading-edge semiconductors used in artificial intelligence, data centers, consumer electronics, and defense systems.

Today, the global EUV market is dominated by Dutch equipment maker ASML, which is the sole supplier of commercial EUV lithography systems.

xLight is developing an alternative method for generating EUV light that the company says could improve efficiency and increase manufacturing throughput. The technology remains under development, with a planned demonstration expected at the Albany Nanotech Complex in New York later this decade.

The funding comes as governments worldwide increase investments in semiconductor supply chains amid rising demand for advanced chips and concerns over concentration risks in key manufacturing technologies.

ASML’s position in the market remains strong as the company continues to expand production of its EUV systems as chipmakers invest heavily in capacity for artificial intelligence and next-generation semiconductor manufacturing.

Industry analysts view xLight’s program as a long-term research effort rather than a near-term competitive challenge. Any alternative EUV technology would require years of testing, qualification, and integration before it could be adopted in commercial semiconductor production.

The project is not expected to affect current semiconductor availability, pricing, or lead times, but it highlights increasing attention on the equipment and technologies that underpin advanced chip production.