U.S.-Backed Chipmaking Startup Chaired by Former Intel CEO Is Raising $350 Million
A government-backed startup developing lasers for chipmaking wants to make a laser that can squeeze even more circuits onto semiconductors.
The Takeaway
- Chipmaking startup XLight is seeking $350 million in new funding.
- U.S. government invested $150 million in XLight via CHIPS Act.
- Former Intel CEO chairs startup developing advanced chip lasers.
XLight, a startup developing advanced lasers for semiconductor manufacturing, is in talks to raise $350 million in funding from a pair of investment firms just weeks after receiving substantial investment from the U.S. Department of Commerce, according to the company’s verbal and written pitch to prospective investors.
The company wants to reduce the cost and time needed to make the most advanced AI server chips by developing an alternative approach to extreme ultraviolet lithography, the process of beaming UV light to print microscopic patterns onto the chips. It’s aiming to sell the technology to ASML, whose EUV machines produce critical material for the chip systems of Nvidia and other top chip designers.
ASML isn’t currently an investor in xLight but is “working with them so they can demonstrate their technology—we feel that’s a responsibility on our side,” ASML CEO Christophe Fouquet told TechCrunch in May. “But it’s still a very long journey.” (A single ASML machine can cost hundreds of millions of dollars, and the factories containing the machines can cost tens of billions.)
XLight, founded in 2021 by Nicholas Kelez, former chief product officer at quantum computing startup PsiQuantum, told potential investors it plans to pitch ASML on participating in the funding round, along with chipmaking giant Taiwan Semiconductor Manufacturing Co., which operates ASML machines, as well as chip designer Intel and memory designer Micron Technology.
New York–based tech investment firm Boardman Bay Capital Management and Boston-based Bain Capital are in talks to lead the round, xLight’s pitch stated. It couldn’t be learned what valuation the company is targeting.
XLight raised money earlier this month, receiving a $150 million investment from the U.S. Department of Commerce and the National Institute of Standards and Technology as part of the CHIPS and Science Act. The U.S. is now likely one of xLight’s largest shareholders; the company has raised approximately $200 million in total. Former Intel CEO Pat Gelsinger, whose venture firm, Playground Global, invested in xLight last year, is executive chair of the startup.
Playground and Bain Capital declined to comment. XLight and Boardman Bay didn’t respond to requests for comment before publication.
The startup is currently developing its first prototype site in Albany, N.Y., with the goal of finishing its first working light source by 2028, the company has said. It has signed nonbinding agreements with lenders willing to provide $4.2 billion in project financing to build its first seven facilities, according to pitch materials sent to prospective investors, though it’s unclear where those will be located and when they are expected to be operational.