Li, R.K. Chen, H.B. Chen, L.W. Deng, X.J. Du, Y.C. Huang, P.W. Huang, W.-H. Li, Z.Z. Liu, X. Pan, Z. Shi, J.R. Tang, C.-X. Wang, H. Yan, L.X. JACoW Publishing Geneva, Switzerland Steady-state microbunching (SSMB) is a new concept radiation-generation mechanism that utilizes laser and a specially designed magnetic lattice to create and maintain fine structures in a high-quality electron beam for coherent light emission. The SSMB concept combines major advantages of conventional synchrotron light sources and linac-based free-electron lasers. It opens up a rich field for beam dynamics research and holds tremendous potential as one of the candidate options for next-generation light source for advanced semiconductor fabrication. The proof-of-principle demonstration experiment of SSMB has been accomplished. R&D on a complete dedicated SSMB facility is currently underway. In this talk, we will report on the progress on the beam dynamics design and optimization, as well as the key components including the laser enhancement cavity and electron injector of a SSMB light source.