UMC starts mass production in Singapore; Citi sees improving outlook
Commercial buildings illuminated at dusk in Singapore on Monday, February 2, 2026. Photographer: SeongJoon Cho/Bloomberg via Getty Images
Bloomberg | Bloomberg | Getty Images
Taiwan’s second largest contract chip manufacturer, United Microelectronics Corporation (UMC), announced On Tuesday, the first mass-produced silicon photonic wafers were produced at the Singapore facility.
UMC aims to meet the growing demand for high-speed optical interconnects in AI and hyperscale data center networks.
UMC said in a statement that the joint team, collaborating with SILITH Technology, a local fabless chip design company, brought the silicon photonics platform from development to production ready within 18 months and secured the technology to support the next generation artificial intelligence infrastructure.
UMC also plans to make its own 12-inch silicon photonics platform available for customer product development by 2027.
It comes after analysts at Citi said they saw an improving outlook for the chip maker in the second half of the year, forecasting a 13% quarter-on-quarter increase in sales and gross margin improvement in the second quarter of 2026.
UMC, which has recently supported Wall Street optimism reported A strong financial performance was achieved, with June sales rising 22.85% year on year to NT$23.12 billion ($719.21 million) and cumulative sales in the first half increasing 11.28%.
But the company’s shares fell nearly 5% in Taiwan during Tuesday’s session, before losses narrowed to 1.6%.
UMC is part of a broader wave of Taiwanese technology firms expanding their manufacturing footprints in Singapore as the city-state becomes a key regional hub for the global semiconductor supply chain.
This growing ecosystem includes: King Yuan Electronic Company as well as Vanguard International Semiconductor Corporation, a TSMC-backed chipmaker that recently partnered with a Netherlands-based company NXP Semiconductors Building a $7.8 billion manufacturing facility in the city state.
Silicon photonics is an essential technology for transmitting and processing data at ultra-high speeds; The market is experiencing significant growth, driven by increasing data traffic and demand for faster optical communications, with its global size rising to an estimated $3.71 billion in 2026. data From Polaris Market Research.
