On Monday, the Donald Trump administration said it has signed a preliminary, nonbinding agreement to take an equity stake in xLight.
US Eyes Breakthrough in EUV Bottleneck
EUV lithography machines — made exclusively by ASML Holdings NV (NASDAQ:ASML) — are essential for advanced chip manufacturing.
Their most complex component is the laser. xLight has proposed to build a far more energy-efficient laser using particle-accelerator technology, working with U.S. national labs to develop a prototype that could integrate with ASML's systems or future competitors.
In a press release, the U.S. Commerce Department said the government plans to invest up to $150 million in the company.
The proposed funding would support the construction, expansion and testing of a free-electron laser prototype designed as a new light source for extreme ultraviolet lithography, with the Commerce Department set to receive $150 million in equity in xLight in return.
Commerce Secretary Howard Lutnick said the partnership supports a " technology that can fundamentally rewrite the limits of chipmaking."
Gelsinger Says New Laser Could Rewrite Chip Economics
xLight was established in 2021 and is based in Palo Alto, California. It has also brought former Intel Corp (NASDAQ:INTC) CEO Pat Gelsinger onto its leadership team, appointing him as executive chairman in March.
In an interview, Gelsinger said the company's technology could increase wafer-processing efficiency by 30% to 40% while sharply reducing energy demands, reported the Wall Street Journal.
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US Sharpens Focus On Domestic Chip Innovation
The investment marks the first major action by the CHIPS Research and Development Office since the Trump administration assumed control of the Joe Biden-era $7.4 billion institute.
It also follows a surge of private-sector activity.
Last month, the New York Times reported that the Trump administration has invested more than $10 billion in taxpayer funds to acquire minority stakes in at least nine private companies across sectors like steel, minerals, nuclear energy and semiconductors.
The Trump administration has also taken direct ownership stakes in five major publicly traded companies as part of a national security push to secure domestic supply chains in semiconductors, critical minerals and steel.
The government now holds 10% of Intel, 15% of MP Materials (NYSE:MP), 10% of Lithium Americas Corp. (NYSE:LAC), 10% of Trilogy Metals Inc. (NYSE:TMQ) and a "golden share'' in U.S. Steel Corporation.
In October, Substrate — another U.S. semiconductor startup backed by Peter Thiel — raised $100 million to build domestic fabs and explore its own EUV tool.
Meanwhile, Commerce Department officials reportedly press global manufacturers, including Taiwan Semiconductor Manufacturing Co. (NYSE:TSM), to expand their U.S. footprint.
Price Action: On Monday, ASML closed at $1,087.99, up 2.64% for the day, with shares inching slightly higher to $1,088.50 in after-hours trading, according to Benzinga Pro.
Benzinga's Edge Stock Rankings indicate that ASML continues to show solid short, medium and long-term growth prospects. Click here to see how the company compares with its industry peers.
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