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Chips

UMC starts mass production of silicon photonics in Singapore for AI data centers

Taiwan's United Microelectronics Corporation (UMC), the second-largest contract chipmaker in Taiwan, announced Tuesday the first mass-produced silicon photonics wafers from its Singapore facility, developed in collaboration with fabless design company SILITH Technology. The platform went from development to production in just 18 months, addressing growing demand for high-speed optical interconnects in AI and hyperscaler data center networks.

Silicon photonics is essential for transmitting data at ultra-high speeds, with the global market estimated at $3.71 billion in 2026. UMC plans to make its own 12-inch silicon photonics platform available for customer product development by 2027. This announcement comes as Citi forecasts improving financial performance for the chipmaker, projecting a 13% quarter-on-quarter sales jump in Q2 2026 and gross margin recovery.

Singapore is emerging as a major regional hub for semiconductor manufacturing, with other Taiwanese firms including King Yuan Electronics and Vanguard International Semiconductor expanding there. This geographic diversification in production capacity is critical for AI infrastructure as demand for optical interconnects in hyperscale data centers continues to grow.

Sources