UMC Challenges Tower, GlobalFoundries in AI-Fueled Silicon Photonics Race
The rapid buildout of generative AI infrastructure is driving demand for faster, more power-efficient links inside data centers, expanding the foundry market for silicon photonics integrated circuits, or PICs. Although these chips often rely on mature process technologies, foundries still compete on integration, yield and production consistency. The opportunity is drawing sharper competition among United Microelectronics Corp., Tower Semiconductor and GlobalFoundries.
UMC has delivered its first batch of silicon photonics chips, positioning its 12-inch manufacturing capacity and process-control capabilities as advantages against Tower Semiconductor and GlobalFoundries. Moving production to 12-inch wafers can increase chip output per wafer and improve cost efficiency compared with commonly used 8-inch lines. The report did not disclose the delivery date, customer, order value or planned production volume.
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The history behind this eventUMC Targets $1 Billion in AI Revenue as Silicon Photonics Shipments Begin
United Microelectronics Corp. is expanding beyond its core mature-node foundry business into the artificial-intelligence infrastructure supply chain. Silicon photonics, which enables faster and more energy-efficient data transmission in data centers, and AI power-management chips could give UMC new growth engines while reducing its exposure to cyclical demand for consumer electronics.
UMC said alongside its second-quarter earnings that it had delivered its first batch of 12-inch silicon photonics chips to customers, marking a key step toward commercial-scale production. The company expects revenue from silicon photonics, AI power-management ICs and related products to reach as much as $300 million this year, with total AI-related sales projected to exceed $1 billion within three years.
UMC's Singapore Plant Delivers First Silicon Photonics Wafers in AI Push
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.
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