UMC Begins Silicon Photonics Chip Production in Singapore for AI Data Centres

United Microelectronics Corp (UMC), Taiwan's second-largest contract chipmaker, has begun mass-producing silicon photonics chips at its 12-inch wafer fab in Singapore, positioning itself at the centre of a critical bottleneck in AI data centre infrastructure: the speed at which chips can communicate.

The move marks a strategic shift for UMC, which has designated Singapore as its key hub for photonic chip development alongside Taiwan. The company has assigned more than 100 employees to the business and plans to continue expanding its workforce there over the next several years. UMC Senior Vice President Hung Kuei-chun said silicon photonics and co-packaged optics will be key growth drivers, with the company transitioning production from traditional 8-inch wafers to more advanced 12-inch wafers for improved power efficiency and performance.

Singapore-based Silith Technology will be UMC's first major customer for the new production line. Silith supplies photonic chips to optical transceiver manufacturers including Innolight and Coherent, which are key suppliers to AI companies such as Nvidia and Google. The partnership combines Silith's expertise in silicon photonics design with UMC's 12-inch wafer process capabilities to support mass production of 1.6-terabit-per-second solutions. UMC is also working with Belgium's IMEC research institute to establish a manufacturing platform that will allow more customers to adopt the technology beginning in 2027.

Photonic chips use light instead of electrical signals to transmit data, enabling faster communication, greater bandwidth, and lower power consumption than conventional chips. This makes them critical for AI data centres where thousands of chips must exchange data at high speed — a problem that has become one of the defining constraints in scaling AI infrastructure. UMC plans to launch advanced packaging services next year that integrate photonic chips with interposers to improve transmission speeds, and aims to introduce an open silicon photonics platform by 2028.

Why it matters for Singapore: UMC's decision to anchor its photonics strategy in Singapore underscores the city-state's growing role in the AI hardware supply chain beyond semiconductor assembly. As AI connectivity bottlenecks become the next frontier in chip design, Singapore is attracting advanced manufacturing — not just mature-node foundry work — particularly in areas like silicon photonics that require precision engineering and R&D collaboration. For Singapore's semiconductor ecosystem, UMC's expansion alongside Silith Technology creates a local photonics cluster that strengthens the country's position in the AI infrastructure value chain.