Modification of electromagnetic quantum fluctuations in the form of quadrature squeezing is a central quantum resource, which can be generated from nonlinear optical processes. Such a process is facilitated by coherent two-photon excitation of the strongly bound biexciton in atomically thin semiconductors. We show theoretically that interfacing an atomically thin semiconductor with an optical cavity makes it possible to harness this two-photon resonance and use the biexcitonic parametric gain to generate squeezed light with input power an order of magnitude below current state-of-the-art devices with conventional third-order nonlinear materials that rely on far off-resonant nonlinearities. Furthermore, the squeezing bandwidth is found to be in the range of several meV. These results identify atomically thin semiconductors as a promising candidate for on-chip squeezed-light sources.
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