Welsh company IQE has secured a proportion of the £1 million funding available from the government for broadband research.
The technology firm, which is headquartered in Cardiff, will use the money from the Technology Strategy Board (TSB) to investigate potential developments in high-speed broadband connections.
Specifically, IQE will look into the potential of next-generation internet broadband devices, the Western Mail reported.
The organisation is a supplier of products based on laser-technology that can be used to bolster internet connection speeds.
Dr Wyn Meredith of IQE, who is leading the project, explained to the newspaper that the TSB-funded research will involve diode laser components.
He said: "We are looking to solve the paradox of producing diode sources of telecoms-grade quality with consumer grade pricing for this last link of access to the home."
Announced earlier this month, the TSB funding is intended to help push forward the development of high-speed 10Gb broadband.