UMC starts silicon photonics mass production in Singapore as Citi forecasts strong growth

UMC's Singapore Fab Achieves Silicon Photonics Mass Production

United Microelectronics Corporation (UMC), Taiwan's second-largest contract chipmaker, announced Tuesday the first mass production of silicon photonics wafers at UMC's Singapore fab 1

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. The milestone addresses surging demand for high-speed AI optical interconnects in AI and hyperscaler data centers, positioning the company to capture a growing market valued at $3.71 billion in 2026 according to Polaris Market Research 1

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Collaborating with Silith Technology, a local fabless chip design company, the joint team brought the 12-inch silicon photonics platform from development to production readiness in just 18 months 2

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. The platform combines Silith Technology's proprietary photonics design expertise with United Microelectronics Corporation's advanced process integration capabilities and proven silicon-on-insulator (SOI) manufacturing capabilities 2

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Silicon Photonics Technology Secures Cloud Infrastructure Qualification

The production platform has already demonstrated production-level performance with high yield and reliability, securing qualification by a cloud infrastructure customer for volume deployment 2

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. This early validation signals strong market acceptance for ultra-high-speed data transmission solutions critical to next-generation AI infrastructure.

United Microelectronics Corporation plans to make its own 12-inch silicon photonics platform available for customer product development by 2027 1

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. Building on the commercialization of Silith Technology's 200G/lane silicon photonics products, the companies are extending their roadmap to support next-generation 400G/lane optical interconnects 2

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. The collaboration includes development of a 400G/lane pure-silicon photonics platform leveraging high-speed silicon Mach-Zehnder Modulators (MZMs) to enable 400G/lane transmission while preserving the manufacturability, scalability, and cost advantages of a CMOS-compatible silicon platform 2

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Citi Analysts Project Strong Financial Recovery

Analysts at Citi see an improving outlook for the chipmaker in the second half of the year, forecasting a 13% quarter-on-quarter sales jump in the second quarter of 2026 and a gross margin recovery 1

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. Supporting this optimism, UMC recently reported strong financial performance, with June sales jumping 22.85% year-on-year to NT$23.12 billion ($719.21 million), and first-half cumulative sales rising 11.28% 1

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. The company's stock fell nearly 5% in Taiwan during Tuesday's session before paring losses to trade 1.6% lower 1

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Singapore Emerges as Semiconductor Manufacturing Hub

UMC is part of a broader wave of Taiwanese tech firms expanding their manufacturing footprint in Singapore as the city-state grows into a major regional hub for the global semiconductor supply chain 1

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. This growing ecosystem includes King Yuan Electronics Corp and Vanguard International Semiconductor Corporation, a chipmaker backed by TSMC, which recently partnered with Netherlands-based NXP Semiconductors to build a $7.8 billion manufacturing plant in the city state 1

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United Microelectronics Corporation is also collaborating with ecosystem partners to develop thin-film lithium niobate (TFLN)-based solutions for future ultra-high-bandwidth optical interconnects 2

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. Combined with advanced packaging technologies, these complementary silicon photonics and TFLN platforms will enable optical-engine modules supporting co-packaged optics, optical I/O, and other highly integrated architectures for next-generation AI infrastructure 2

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