Pat Gelsinger’s New Chapter: Leading xLight in the Semiconductor Wars

A year after his departure from Intel, Pat Gelsinger continues to wake up at 4 a.m., immersed in the ongoing semiconductor battle, albeit on a different front. Now a general partner at Playground Global, Gelsinger is working with ten startups. One in particular has garnered significant attention: xLight, a semiconductor startup that recently announced a preliminary deal for up to $150 million from the U.S. Commerce Department, which is set to become a notable shareholder.

Gelsinger’s Transition from Intel to xLight

Gelsinger’s exit from Intel was marked by a lack of confidence from the board regarding his turnaround plans after a 35-year career at the tech giant. However, the xLight deal represents a significant accomplishment for him and highlights a broader trend troubling Silicon Valley: the Trump administration’s equity stakes in strategically crucial companies.

California Governor Gavin Newsom captured the concern on many minds when he questioned, “What the hell happened to free enterprise?” during a recent speaking event. His statement reflects the pervasive anxiety in an industry that has traditionally upheld free-market values.

At a TechCrunch event at Playground Global, Gelsinger—who serves as executive chairman of xLight—appeared unfazed by the ongoing philosophical discussions. Instead, he is concentrated on xLight’s potential to address what he identifies as the semiconductor industry’s most pressing challenge: lithography, the crucial process for etching microscopic patterns on silicon wafers. The startup is innovating massive “free electron lasers,” powered by particle accelerators, promising to change the landscape of chip manufacturing—provided the technology scales effectively.

Aiming to Revitalize Moore’s Law

Gelsinger noted, “I have this long-term mission to continue to see Moore’s law in the semiconductor industry,” alluding to the principle that computing power should double approximately every two years. He believes xLight’s advances could reinvigorate this principle, making it more relevant for future technologies.

The xLight deal marks the first funding awarded under the Chips and Science Act during Trump’s second term, designated for early-stage companies with transformative technologies. It is important to note that this agreement is currently at the letter of intent stage, meaning that it is not yet finalized and details may evolve. Gelsinger acknowledged, “We’ve agreed in principle on the terms, but like any of these contracts, there’s still work to get done.”

xLight’s Ambitious Technological Innovations

xLight’s project is both extensive and ambitious. The company plans to develop machines that measure approximately 100 meters by 50 meters—roughly the size of a football field—to be placed outside semiconductor fabrication plants. These free electron lasers are designed to generate extreme ultraviolet light with exceedingly precise wavelengths, significantly surpassing the capabilities of current technology used by ASML, the dominant player in the EUV lithography market.

Gelsinger explained, “About half of the capital goes into lithography… [and] this ability to keep innovating for shorter wavelength, higher power light is the essence of being able to continue to innovate for more advanced semiconductors.”

Nicholas Kelez leads xLight and has an uncommon background for the semiconductor industry. Prior to founding xLight, Kelez was instrumental in quantum computing development at PsiQuantum and spent two decades constructing large-scale X-ray science facilities at national labs, making him particularly well-equipped for this endeavor.

Timing and Market Viability

A crucial question arises: why pursue this approach when ASML previously abandoned a similar strategy nearly a decade ago? Kelez explained that the technology’s immaturity back then hindered its feasibility. At that time, the industry had invested tens of billions into the existing technology, making it unviable to challenge the status quo.

Today, with EUV technology now standard in advanced semiconductor manufacturing and existing light source technology approaching its limits, the timing appears more favorable. Kelez mentioned a key innovation: treating light as a utility. This diverges from ASML’s integrated approach and allows for more powerful, scalable designs.

The company aims to start producing silicon wafers by 2028 and expects its first commercial machine to be operational by 2029.

Collaborations, Competition, and Future Outlook

While xLight faces challenges, directly competing with ASML may not be among them at this stage. Kelez stated, “We’re working very closely with them to basically design how we integrate with an ASML scanner,” indicating a constructive approach to collaboration rather than direct competition.

Yet, there is increased competition in the landscape. For example, Substrate, another semiconductor manufacturing startup backed by Peter Thiel, has raised $100 million for U.S. chip fabs, including an EUV tool strikingly similar to xLight’s vision. Gelsinger, however, views them not as adversaries but potential customers, emphasizing that if Substrate succeeds, they could ultimately require what xLight is developing.

Gelsinger’s Position on Government Involvement

Gelsinger’s connection with the Trump administration adds complexity to the narrative around xLight. He pitched the concept to Commerce Secretary Howard Lutnick prior to the startup’s funding, aiming to stimulate chip manufacturing within the U.S. However, some critics see this partnership as governmental overreach.

Defending this collaboration, Gelsinger argues it is essential for national competitiveness, stating, “I measure it by the results.” He contrasts U.S. policy with that of other countries, stating, “Many of our competitive countries don’t have such debates. They’re moving forward with the policies that are necessary to accomplish their competitive outcomes.”

In a similar vein, he criticized U.S. energy policy by pointing out the stark differences between nuclear reactors built in the U.S. and those in China.

Minimal Strings Attached to Government Stake

For xLight, the government investment comes with few restrictions. Kelez assured that the Commerce Department will hold no veto rights or board seats. Gelsinger added, “It’s a minority investment in a non-governing way, but it also says we need this company to succeed for national interest.”

Having raised $40 million so far, xLight plans another funding round soon. Kelez believes their needs are relatively modest, stating, “This is not fusion or quantum. We don’t need billions.”

Conclusion: A New Era for Gelsinger

For Gelsinger, xLight represents more than just another venture; it is a chance to reaffirm his influence within the semiconductor industry while diverging from Silicon Valley’s conventional norms. When asked how he reconciles his corporate principles in the current political environment, he adopts a technocratic perspective. Gelsinger asserted, “CEOs and companies should neither be Republican or Democrat… Your job is to accomplish the business objective.”

As he balances his commitments across multiple startups, Gelsinger expressed satisfaction. “Absolutely,” he said about the opportunity to influence various technologies, emphasizing his passion for deep tech.

With his typically intense work ethic, only time will tell how long he can maintain a healthier work-life balance—”I gave my wife back her weekends,” he remarked, albeit with a hint of humor.

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Emmanuel Kesse

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