Singapore: Taiwan's United Microelectronics Corporation (UMC) announced Tuesday that it has commenced mass production of silicon photonics wafers at its manufacturing facility in Singapore. The company, recognized as Taiwan's second-largest contract chipmaker, revealed that this technology is designed to cater to the increasing demand for high-speed optical interconnections, essential for artificial intelligence infrastructure and expansive data center networks.

According to Anadolu Agency, UMC collaborated with Singapore-based fabless chip designer SILITH Technology to develop the silicon photonics platform, achieving production readiness within 18 months. Additionally, the company aims to offer its proprietary 12-inch silicon photonics platform to customers for product development by 2027. Silicon photonics technology integrates optical components with semiconductor manufacturing processes, facilitating the transmission of large data volumes at high speeds while minimizing power consumption. The need for such technology has surged as AI systems and data centers demand quicker communication between processors, memory units, and networking equipment.

UMC reported a revenue of 23.12 billion New Taiwan dollars ($719 million) in June, marking a 22.9% increase from the previous year. The company's cumulative revenue for the first half of 2026 saw an 11.3% year-on-year rise. Despite these financial gains, UMC's shares experienced a nearly 5% drop in Taiwan trading on Tuesday before reducing their losses. The company is among several Taiwanese semiconductor firms broadening their manufacturing presence in Singapore, a country actively seeking to fortify its role in the global chip supply chain.

In a related development, Taiwan's Vanguard International Semiconductor Corp., supported by Taiwan Semiconductor Manufacturing Co., is collaborating with Dutch chipmaker NXP Semiconductors to establish a $7.8 billion semiconductor manufacturing facility in Singapore.