  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 allows 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.
