The US government has a new stake in the semiconductor game. It's invested $150 million in xLight, a chip manufacturing startup chaired by former Intel CEO Pat Gelsinger, and now the company is looking to raise an additional $350 million. Boardman Bay Capital Management and Bain Capital are expected to lead the round, according to people familiar with the matter. The government's investment, made through the CHIPS and Science Act, may have already made it a major shareholder. xLight has raised about $200 million to date.
Gelsinger, who left Intel in 2024, serves as xLight's executive chairman. His venture capital firm, Playground Global, invested in the startup in 2025. xLight is also lobbying ASML, TSMC, Intel, and Micron to participate in this round.
xLight is developing an alternative light source for extreme ultraviolet (EUV) lithography, aiming to reduce the time and cost of manufacturing advanced server chips. ASML CEO Christophe Fouquet said his company is collaborating with xLight on a technology demonstration but called it "a long road." xLight plans to build its first prototype in Albany, New York, with a goal of having a working light source by 2028.
The company has signed a non-binding $4.2 billion project financing agreement with lenders to build its first seven facilities. Another startup, Substrate, is also developing X-ray-based lithography technology to compete directly with ASML.
Since early 2025, the US government has made at least 12 direct equity investments in private companies, focusing on moving critical parts of the AI server chip supply chain to the US. That includes two semiconductor investments: one in Intel and one in xLight.