U.S. Government Commits $150M to xLight for Chip Manufacturing

The support, reported by Reuters and Axios, is part of the CHIPS and Science Act—Washington’s broader effort to rebuild domestic semiconductor production and reduce reliance on overseas manufacturers.

xLight is working on a free-electron laser system designed to serve as an alternative light source for advanced lithography. The company says the technology could eventually offer a faster, more efficient solution for producing cutting-edge chips.

Federal officials said that the proposed investment shows how important it is to improve the U.S. chipmaking industry, especially since the world is asking for more high-performance semiconductors.

If successful, xLight’s approach could help ease bottlenecks in chip production, lower energy use during manufacturing, and give U.S. facilities more independent control over critical technologies that are currently sourced abroad.

Industry analysts say the commitment shows growing federal interest in supporting startups that can introduce breakthroughs in chip fabrication tools—an area long dominated by a small number of international suppliers.

The proposed funding would help xLight scale its research, expand engineering operations, and accelerate the development of an early prototype. The company expects to collaborate with national research centers and manufacturing partners as work progresses.

Startup leaders and economic-development groups say investments in domestic semiconductor equipment could benefit hardware-focused innovation hubs and deep-tech incubators across the country.

The news of the investment comes as the US continues to focus on making high-performance semiconductors for defense systems, consumer electronics, cars, and industrial uses in the US.

With global competition intensifying, federal officials argue that accelerating domestic innovation in lithography tools is critical to securing long-term technological competitiveness.

xLight has not disclosed a timeline for commercial deployment, but the company says the new backing will allow it to pursue more aggressive testing and development in the year ahead.

Federal Backing of xLight Marks Another Step Toward U.S. Chip Independence

The planned $150 million investment signals Washington’s commitment to strengthening the semiconductor supply chain and supporting emerging companies working on next-generation manufacturing tools.

Observers say the initiative may also create new opportunities for domestic research centers, startups, and manufacturing ecosystems focused on advanced hardware technologies.