TSMC Targets Next-Gen Silicon Photonics in 3-5 Years

TSMC and top global chip design and supply companies are accelerating the development of next-generation silicon photonics technology. Their objective is to bring this innovative technology to market within the next three to five years.

KC Hsu, Vice President of Integrated Interconnect and Packaging at TSMC, highlighted that while the silicon photonics market is still emerging, it is projected to grow at a compound annual growth rate of 40% from 2023, reaching $500 million by 2028. “The primary driver of this growth is the increasing demand for high data rate modules to boost fiber optic network capacity, especially with pluggable and co-packaged optical devices (CPOs). We foresee CPOs becoming a vital platform for high-performance computing within the next five years.”

Determining the precise timeline for mass production remains challenging. Hsu emphasized that the successful commercialization and large-scale manufacturing of this cutting-edge technology will depend on strong customer support and order volumes.

Co-packaged optical devices are advanced optical systems designed to be integrated directly into chip packages. This approach offers a more integrated and sophisticated solution compared to the current pluggable options used in AI server systems within data centers.

Radha Nagarajan, Senior Vice President and Chief Technology Officer of Optical and Cloud Connectivity at Marvell, stated that incorporating co-packaged optical components could result in “over 30% savings in power consumption” compared to existing pluggable data transmission solutions. He anticipates a wider adoption of CPO solutions in the near future. “Some CPO deployments are already in place… but the numbers are still limited. We expect to see a significant increase in the next two to three years.”

Nagarajan further explained that the key challenges include producing these new optical engines at the chip level and deploying AI computing systems capable of accommodating them. This involves redesigning AI chips to integrate optical interconnects within their architecture.

Rachid Taibi, General Manager of the Business Unit at chip materials supplier Soitec, noted that major data center operators like Meta and Microsoft are actively supporting the development of CPO technology due to its energy efficiency benefits.

Silicon photonics technology is increasingly seen as a critical component for advancing AI, data communication, 6G, and quantum computing. Optical transmission offers superior energy efficiency and lower latency compared to traditional data transmission methods, addressing the growing heat and power consumption challenges in AI data centers.

KC Hsu emphasized that the silicon photonics ecosystem is still in its early stages and requires ongoing development. The widespread adoption of this technology will depend on collaboration across the supply chain, including design software providers like Synopsys and Cadence, chip developers such as NVIDIA and AMD, and AI server manufacturers like Foxconn and Quanta Computer.