The United States government now stands on the verge of becoming a direct investor and shareholder in a promising semiconductor startup chaired by Pat Gelsinger, the seasoned executive who formerly led Intel until his resignation last year. This development represents far more than a simple financial transaction; it is a symbolic and strategic effort to rebuild America’s foothold in one of the most geopolitically sensitive and economically vital industries of the twenty-first century—the design and production of advanced microchips.
In a statement released on Monday, the U.S. Department of Commerce disclosed that the Trump administration had signed a nonbinding letter of intent to inject as much as $150 million into a startup called xLight. This young firm is focused on developing a revolutionary, more efficient, and less expensive approach to semiconductor manufacturing. The agreement, while preliminary and nonbinding, expresses a clear intention to nurture a transformative technology that could redefine the process by which modern chips are fabricated, potentially granting the United States a renewed competitive advantage in this crucial domain.
The planned financial infusion will be drawn from federal resources allocated under the CHIPS and Science Act, landmark legislation designed to strengthen domestic chip production and research. Uniquely, the proposed investment would be structured as equity rather than a conventional grant or loan, meaning the federal government would acquire an actual ownership stake in xLight. This signals a rare and ambitious alignment between public policy goals and private enterprise, where the government takes a literal vested interest in the long-term growth of the company and the technological breakthroughs it aims to deliver.
This transaction marks a significant milestone—it would be the very first initiative undertaken by the Trump administration’s newly formed CHIPS Research and Development Office. Its announcement underscores Washington’s escalating determination to restore American leadership in semiconductor manufacturing. Currently, the most sophisticated and high-performance chips are produced almost entirely outside U.S. borders, most notably by Taiwan Semiconductor Manufacturing Company (TSMC) in Taiwan and Samsung Electronics in South Korea. Both operate in regions where geopolitical uncertainty and China’s growing influence present strategic vulnerabilities for the United States and its allies.
Earlier reports from the technology sector had already highlighted the urgency of this challenge. In July, Intel cautioned investors that it might suspend progress on its forthcoming 14A chip generation due to financial pressures. According to Business Insider’s Alistair Barr, canceling the 14A line would deal a devastating blow to America’s semiconductor ambitions, potentially crippling the nation’s ability to remain competitive at the highest end of chipmaking technology.
Commerce Secretary Howard Lutnick emphasized the administration’s renewed sense of mission in a strongly worded statement on Monday. “For far too long,” he declared, “America ceded the frontier of advanced lithography to others. Under President Trump, those days are over.” Lutnick went on to describe the partnership with xLight as a bold investment in a technology capable of redefining the boundaries of semiconductor production itself. “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,” he added, framing the initiative as both a technological renaissance and a patriotic endeavor.
xLight, headquartered in Palo Alto, California, was founded in 2021 with a singular objective: to pioneer a new generation of free-electron laser technology, described in the Commerce Department’s press materials as an “alternative light source” for extreme ultraviolet (EUV) lithography. EUV lithography represents the cutting edge of semiconductor fabrication, enabling the creation of ultra-small transistor architectures used in the world’s most advanced processors. xLight’s innovations aim to enhance this process by providing greater precision and lower operational costs, thereby expanding the capabilities of chip manufacturers.
On its website, xLight explains that its free-electron laser systems are designed to augment the EUV lithography machines built exclusively by the Dutch company ASML—the undisputed global leader in this field. Because ASML is the sole producer of EUV systems worldwide, any technological improvement to its equipment has profound implications for the entire semiconductor ecosystem. xLight claims that its approach will “transform semiconductor fab capabilities and dramatically reduce capital and operating expenses,” asserting that its technology can make fabrication plants both more productive and economically sustainable over the long term.
At the center of this ambitious enterprise is Pat Gelsinger, a veteran technologist with deep roots in Silicon Valley and decades of experience at Intel. After being forced out of his position as Intel’s CEO late last year, following a difficult period marked by disappointing earnings and a failure to keep pace in the competitive race to lead artificial intelligence chip development, Gelsinger assumed the role of executive chairman at xLight in March. He also serves as a general partner at Playground Global, the venture capital firm that spearheaded xLight’s $40 million Series B funding round in July, adding yet another strategic dimension to his involvement.
Gelsinger’s comments to CNBC’s “Squawk Box” in October shed light on his reflective and candid view of Intel’s trajectory during his tenure. He acknowledged that Intel had made what he called “a set of bad decisions over 15 years,” lamenting that the company’s technical leadership had, for an extended period, been “led by people who were not primarily technologists.” He further admitted that Intel had lagged behind competitors in the artificial intelligence revolution, conceding, “We were late on AI as well.” His remarks resonated across the industry, serving as both confession and call to refocus American industry on technological excellence.
As one of the most influential advocates behind the 2022 CHIPS Act, Gelsinger has long argued that maintaining a domestic semiconductor ecosystem is critical to national security and economic autonomy. His career, spanning from his early engineering days at Intel to his current leadership at xLight, reflects a consistent vision—championing the restoration of American ingenuity and production capacity in high technology. In the latest company announcement, Gelsinger proclaimed that xLight’s innovations could “drive the next era of Moore’s Law, accelerating fab productivity, while developing a critical domestic capability.” In essence, he suggested that the company’s work could help sustain the relentless pace of progress that has defined semiconductor evolution for decades, while simultaneously reinforcing the U.S. industrial base.
Taken together, the potential federal investment in xLight represents more than a funding decision—it embodies a broader strategic realignment. It symbolizes a renewed national commitment to ensuring that the next great wave of microchip innovation is conceived, designed, and manufactured on American soil, securing both economic prosperity and technological sovereignty for years to come.
Sourse: https://www.businessinsider.com/us-invest-xlight-chip-startup-former-intel-semiconductor-race-2025-12
