UMC Wins Major Photonics Orders at 7x CMOS Pricing

According to industry sources, United Microelectronics Corporation (UMC) has secured major silicon photonics orders from Innolight, a global leader in optical transceiver modules, and Silith Integrated Circuit, a photonic integrated circuit (PIC) company backed by Tencent's investment arm. The initial combined order volume is expected to reach approximately 10,000 wafers, with production scheduled at UMC's Singapore facility. Additional orders may follow as demand for high-speed optical connectivity continues to grow.

The products reportedly command unit prices approximately seven times higher than those manufactured using conventional CMOS processes, potentially providing a significant boost to UMC's revenue and profitability.

UMC is reportedly the first Taiwan-based wafer foundry capable of offering key optical communications chips with both high-volume manufacturing capabilities and cost advantages. However, the company declined to comment on specific customers or order-related information.

Photonic integrated circuits (PICs) are essential components in optical communications because they enable the conversion and integration of optical and electrical signals. Compared with conventional CMOS manufacturing, PIC production involves more complex technologies, including optical waveguides, modulators, and optoelectronic integration. These requirements create significant challenges in process development and manufacturing yields, limiting the number of foundries capable of commercial-scale production. Global players such as Tower Semiconductor and GlobalFoundries currently offer dedicated silicon photonics manufacturing platforms.

As optical communications advance toward 800G, 1.6T, and even 3.2T specifications, demand for high-performance optical chips is increasing rapidly. Production capacity at major manufacturers, including Tower Semiconductor and GlobalFoundries, has reportedly become fully booked. UMC is leveraging its specialty manufacturing processes and cost advantages to secure orders from Innolight and Silith, strengthening its position in the global AI infrastructure and high-speed optical interconnect supply chain.

Innolight is a leading global manufacturer of optical transceiver modules for data centers, with a strong presence in North American cloud service provider (CSP) and AI markets. The company is expanding its portfolio of 800G and 1.6T optical transceivers to support growing demand for high-bandwidth data transmission.

Silith specializes in silicon photonics PIC design and is expanding its international presence through its Singapore-based entity, SILITH. Its 100G and 200G per-lane PIC products have achieved cumulative shipments of more than 8 million units. The company is also collaborating with UMC to develop 400G per-lane PIC technology.

In July, UMC and SILITH announced the delivery of their first batch of 12-inch silicon photonics production wafers from UMC's Singapore facility. The transition from development to mass production took only 18 months, and the products have passed validation by a major cloud customer. Industry sources indicate that UMC has established a competitive position among Taiwan-based foundries in terms of commercial 12-inch PIC manufacturing experience, production scale, and cost efficiency.

To support growing demand, UMC has announced plans to expand silicon photonics manufacturing capacity at its P4 facility in Singapore. The company is also planning new facilities, P7 and P8, at its Tainan Science Park site. UMC's long-term target is to achieve monthly PIC production capacity of 18,000 wafers. Equipment installation is expected to begin in late 2028, with full-scale capacity targeted for 2030.

Market sources also indicate that major customers have already begun discussions with UMC regarding future production capacity allocation, highlighting the growing importance of silicon photonics in next-generation AI data centers and high-speed optical networking.