United Microelectronics Corp. (UMC) said on July 14 that its 12-inch fab in Singapore has completed the first mass-production shipment of silicon photonics wafers, as the chipmaker pushes into 1.6T AI data center high-speed transmission demand through a partnership with SILITH. CNBC reported that UMC also expects to open its own silicon photonics platform in 2027, while Citi said it sees a recovery in the company’s second-half operations.
Platform moved into mass production in 18 months
Under the partnership, SILITH provided the silicon photonics architecture design, while UMC contributed 12-inch wafer manufacturing and process integration. The two companies said they moved the platform from development to mass production in just 18 months, a pace UMC described as unusual for cross-disciplinary technology work.
UMC said the platform’s yield and reliability have reached mass-production standards and that it has already received certification from a leading global cloud infrastructure customer, allowing large-scale deployment to begin.
Jason Zhang, chief technology officer at SILITH, said AI is driving optical bandwidth demand at an unprecedented pace and that silicon photonics has become an essential technology for future data centers. Hung Kuei-chun, UMC’s senior vice president, said that beyond the current customer product, the company plans to formally open its own 12-inch silicon photonics platform in 2027 so that more customers can use it for product development and mass-production adoption.
Next focus is ultra-high bandwidth demand
UMC is also working with ecosystem partners to develop solutions based on thin-film lithium niobate, or TFLN, targeting future ultra-high-bandwidth demand. Combined with the company’s advanced packaging technology, its silicon photonics and TFLN platforms are intended to support highly integrated architectures including co-packaged optics, or CPO, and optical I/O.
According to Polaris Market Research, the global silicon photonics market is expected to reach about $3.71 billion in 2026, with demand mainly driven by a surge in data traffic and the need for high-speed optical communications.
Citi expects stronger revenue and margin in the second half
Citi analysts said UMC’s quarterly revenue in the second half could grow 13% quarter over quarter, and that gross margin is also expected to recover. UMC recently reported June revenue of NT$23.12 billion, or about $719 million, up 22.85% from a year earlier. Its cumulative revenue for the first half of the year rose 11.28% year over year.
UMC shares fell nearly 5% intraday on the day of the announcement before trimming losses to about 1.6% by the close, which the report said was mainly due to a broader pullback in Taiwan stocks.
Taiwan tech companies deepen Singapore expansion
Taiwan’s technology sector has recently been expanding its footprint in Singapore. As the city-state becomes a regional hub in the global semiconductor supply chain, companies including King Yuan Electronics and Vanguard International Semiconductor, an investee of Taiwan Semiconductor Manufacturing Co., have been growing operations there. Vanguard has also formed a $7.8 billion joint venture with Dutch chipmaker NXP to build a wafer fab in Singapore.