ASML EUV machine (credit: ASML)
In AI chips, it may be time to regard nothing, no matter what, as surprising. Driven by quenchless global demand, the advanced chip sector is changing, morphing and growing at a pace rarely seen in the technology industry.
That said, it is undeniably surprising that a U.S. startup, xLight, is taking on — make that partially taking on — Netherlands-based ASML, the only company in the world that produces extreme ultraviolet (EUV) chip manufacturing machines for production of the most advanced data center chips driving HPC and AI.
It’s also surprising that the start-up’s leadership team includes Pat Gelsinger, the former CEO of Intel who left that company in 2024 in part, it was speculated, due to his commitment to Intel’s foundry business, which includes the use of ASML EUV machines.
Those machines have been called the most complex in the world, and no wonder. An EUV machine has more than 100,000 parts, they’re the size of a school bus, cost roughly $350 million and weigh around 200 tons. The machine’s high-precision optics are a major part, with the illumination system containing around 25,000 parts and the projection optics containing more than 40,000.
EUV technology is on the geopolitical chess board, ASML has been banned from exporting EUV machines to China as the international AI race has become a core aspect of the U.S. (and aligned countries)-China rivalry.
A more daunting market sector it’s hard to imagine a tech startup taking on. But that’s the intent of xLight, where Gelsinger serves as xLight’s executive chairman. With an investment of $150 million from the Trump Administration, xLight is striving to utilize its laser technology on silicon wafers by 2028. Another surprising part of the story is that the investment comes not long after the administration took at $10 billion stake in Intel, the largest American chip manufacturer (whose chip fab facility outside of Phoenix we visited in October).
To be sure, according to an article in The Wall Street Journal, xLight is working “to improve on just one component of the EUV process: the crucially important lasers that etch complex microscopic patterns onto chemically-treated silicon wafers. The startup is hoping to integrate its light sources into ASML’s machines.”
In an announcement this week, the U.S. Department of Commerce’s CHIPS Research and Development Office, part of the National Institute of Standards and Technology (NIST), said it signed what it described as “a non-binding preliminary letter of intent (LOI) to provide up to $150 million in proposed federal incentives under the CHIPS and Science Act to xLight.”
The administration said in its announced that the potential incentives in the xLight investment would be for the build out of a free-electron laser (FEL) prototype as an alternative light source for EUV. The Department of Commerce would receive $150 million of equity in xLight.
Pat Gelsinger
“For far too long, America ceded the frontier of advanced lithography to others,” said Secretary of Commerce Howard Lutnick, spotlighting the geopolitical aspect of the funding. “Under President Trump, those days are over. This partnership would back a technology that can fundamentally rewrite the limits of chipmaking. Best of all, we would be doing it here at home. xLight’s FEL platform represents the kind of breakthrough innovation that restores American leadership, secures our supply chains, and guarantees that the next generation of semiconductors is born in the United States. This is the CHIPS program at its best.”
Added Nicholas Kelez, CEO and CTO of xLight, “The future of semiconductor manufacturing hinges on lithography, and we are grateful for the support of the Trump Administration, Secretary Lutnick, and Deputy Secretary Dabbar, and their vision to drive innovation and restore American leadership in advanced semiconductor manufacturing. With the support from Commerce, our investors, and development partners, xLight is building its first free-electron laser system at the Albany Nanotech Complex, where the world’s best lithography capabilities will enable the research and development that will define the future of chip manufacturing.”
