The U.S. government takes an equity stake in xLight, led by the former Intel CEO: aiming to challenge ASML’s dominance in lithography machines, it plans to invite TSMC and Micron to participate in the investment.

Former Intel (intel) CEO Pat Gelsinger has assumed the position of Executive Chairman at U.S. startup xLight, which is currently in talks for a new round of fundraising totaling $350 million led by Boardman Bay and Bain Capital; the U.S. government has obtained xLight’s direct equity through the CHIPS Act.
(Background: TSMC “too expensive” — refusing to buy ASML’s latest lithography machines until 2029. What’s behind it?)
(Additional background: Trump: Apple will have Intel make chips! INTC up 6.6% pre-market)

Table of Contents

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• Why Gelsinger Is Here
• Free-Electron Laser: The Fundamental Difference Between xLight’s Technology Path and ASML’s Current Approach
• Pellicles, Photoresists, and Unsolved Materials Science Challenges

Less than a year after being removed from the board of Intel (intel), Pat Gelsinger has appeared in another California startup’s chairman seat—the company’s mission is to shake the deepest moat in the global chip industry: the Netherlands’ ASML’s complete monopoly over extreme ultraviolet (EUV) lithography machine systems.

And unusually, this time the U.S. federal government has taken a direct equity stake.

In December 2025, the U.S. Department of Commerce signed a letter of intent, promising to invest up to $150 million in xLight through the CHIPS and Science Act to obtain direct equity in the company. In a statement, the U.S. Commerce Secretary said, “For a long time, the U.S. has left the frontier of advanced microfabrication to others. Under President Trump’s leadership, those days are over.”

This is the first equity deal from the newly established CHIPS R&D Office under the Trump administration. Currently, xLight is in talks with Boardman Bay Capital Management and Bain Capital, planning to raise an additional $350 million, and inviting ASML, TSMC, Intel, and Micron to participate together.

Why Gelsinger Is Here

EUV lithography is a key process for manufacturing the most advanced chips. Put simply, it “prints” microscopic circuit patterns invisible to the naked eye onto silicon wafers using ultra-short-wavelength ultraviolet light; the high-end processors inside AI servers are etched this way. Today, only one company in the world can produce such systems: ASML of the Netherlands.

Gelsinger is no stranger to semiconductor policy. He spent decades at Intel, and in 2022 he was one of the key drivers behind the CHIPS Act’s passage. In March 2025, he officially joined xLight as Executive Chairman; his venture capital firm, Playground Global, also led xLight’s $40 million Series B round in July 2025.

With federal funding added, xLight has raised about $200 million to date, plus up to $4.2 billion in non-binding project financing commitments for future factory construction.

Free-Electron Laser: The Fundamental Difference Between xLight’s Technology Path and ASML’s Current Approach

ASML’s current EUV light source is called “laser-induced plasma.” In plain terms, it uses a high-power laser to bombard tiny molten tin droplets tens of thousands of times per second; after the droplets are blasted into a plasma state, they emit EUV light. This approach works, but the structure is complex, and the unit price of the latest generation of machines can be as high as $300–$400 million.

xLight is taking a completely different route: “free-electron laser.” In plain terms, it uses a small particle accelerator to accelerate electrons to near the speed of light, then has these high-speed electrons pass through a row of alternating arranged magnets; in the magnetic field, the electrons snake and wiggle, emitting intense EUV light.

No need to bombard tin droplets. xLight claims this approach can achieve wavelengths as short as 2nm; compared with that, ASML’s current machines use 13.5nm. The shorter the wavelength, the finer the circuits that can be printed, and the more transistors that can be packed onto each chip. xLight also claims this will significantly reduce the capital and operating costs of manufacturing advanced AI chips.

However, it’s worth noting that xLight does not plan to directly challenge ASML’s machine business; instead, it wants to sell its light source into ASML’s machines as a “component,” positioning itself as a supplier rather than a competitor. ASML CEO Christophe Fouquet has publicly confirmed: “ASML is working with xLight on technology validation.”

xLight is building its first prototype facility at the Albany NanoTech campus in New York State, targeting its first working light source to be online in 2028. There are still more than two years to go.

Pellicles, Photoresists, and Unsolved Materials Science Challenges

But a 2nm wavelength sounds like a leap forward, it’s still far from volume production validation. On the semiconductor forum SemiWiki, Fred Chen, who has decades of experience in the chip industry, directly points to the core contradiction: “Higher EUV power is definitely incompatible with pellicles, and it will very likely also become incompatible with photoresists.”

A pellicle (pellicle) is an ultra-thin protective film attached to the photomask. In plain terms, it prevents dust from falling onto the photomask and ruining every wafer; without it, yield would collapse. A photoresist (resist) is a photosensitive coating applied to a wafer. In plain terms, it’s similar to photographic film: where the EUV light hits, a chemical reaction occurs, transferring the circuit pattern. If the power is too high, the pellicle could burn through, and the chemical reaction in the photoresist could also get out of control. There are currently no publicly known solutions to these two problems.

The entire business model of xLight is built on the premise that “a 2nm wavelength can achieve high power while maintaining material compatibility.” For now, this premise is still only a claim, not a verified fact. But the U.S. government entering the picture with equity, Gelsinger bringing his network and political capital, and Bain Capital preparing to follow—these are all signals from the capital side.