xLight Raises $40 Million to Build Critical Chipmaking Laser in US

xLight has raised $40 million to speed up the development of a new laser system that could become critical to next-generation chip production. Yahoo Finance reported that the Silicon Valley startup xLight is now entering a high-stakes race to challenge China and strengthen the US position in semiconductor manufacturing.

Nicholas Kelez, CEO of xLight, said at the company’s Palo Alto headquarters, “This is the most expensive tool in the fab. It’s what drives the cost of the wafer more than any other tool in the fab, and it’s what drives capacity more than any other tool in the fab.”

Targeting the Heart of Chip Production

The laser technology xLight is working on plays a vital role in a process called High-NA EUV (Extreme Ultraviolet Lithography). This process is used to etch tiny patterns onto silicon wafers, which is essential in making advanced chips for everything from smartphones to AI hardware.

Currently, only a few companies worldwide are capable of building highly precise lasers. The goal for a US startup is to fill a critical supply chain gap and reduce dependency on foreign tech, particularly from Europe and China.

Backed by venture capitalists and key industry figures, the company’s new round of funding gives it a serious boost. xLight has raised $40 million with participation from Boardman Bay Capital Management. Additional investors included Morpheus Ventures, Marvel Capital, and IAG Capital Partners.

A Strategic Bet for US Tech Independence

The chipmaking world has become a central focus of geopolitical competition. China has been heavily investing in its semiconductor ecosystem, while the US is trying to rebuild its own supply chains. In this context, xLight’s key chipmaking laser technology could help the US reduce reliance on overseas systems and regain control over one of the most advanced parts of the chipmaking process.

At the core of the company’s effort is a plan to help chip factories in the US and allied countries secure locally made lasers for high-precision lithography. These lasers are difficult to engineer and manufacture, and only a small number of companies have the know-how.

If successful, xLight could help chip factories become a crucial enabler for foundries that are ramping up domestic production of 2nm and sub-2nm chips, especially under the CHIPS and Science Act incentives.

A Long Road Ahead, But Growing Momentum

Even though xLight has raised $40 million, the journey ahead is not without challenges. Developing a reliable, production-grade laser system will take years and require even more funding. Still, investors and analysts believe the startup is well-positioned for long-term impact.

With chip demand surging due to AI, edge computing, and cloud infrastructure, having a US-grown solution for advanced lithography could prove to be a game-changer.