UMC Targets $1 Billion in AI Revenue as Silicon Photonics Shipments Begin

Surging demand for high-speed data transmission from generative AI and high-performance computing is exposing the bandwidth constraints and high power consumption of conventional copper interconnects. Silicon photonics, which replaces electrical signals with light, has emerged as a key technology for overcoming these bottlenecks and sharply increasing transmission speeds. Foundry UMC has partnered with chip designer SILITH to develop a silicon photonics platform supporting 1.6T high-speed transmission, targeting opportunities in AI data centers and marking a significant development for the next-generation semiconductor supply chain.

UMC and SILITH announced on July 14, 2026, that UMC's 12-inch Singapore plant had completed mass production and delivery of its first silicon photonics wafers within 18 months. Citi said the development strengthened its positive view of UMC, forecasting a 13% quarter-on-quarter increase in second-quarter 2026 revenue and stronger operations in the second half. A local institutional investor also set a NT$180 price target for UMC. The foundry plans to formally launch its own 12-inch silicon photonics platform in 2027 to win more orders.