According to a report from Taiwan’s Commercial Times, industry experts assert that Silicon Photonics (SiPh) is poised to revolutionize the cloud industry as communication transmission speeds surge beyond 1.6 Tbps. Utilizing Co-Packaged Optics (CPO) for integration, SiPh combines optical components and Application-Specific Integrated Circuit (ASIC) technology into a singular module, effectively mitigating power consumption challenges.

Moreover, the versatility of SiPh is highlighted by its applications in communication transmission, biomedical sensing, LiDAR, high-speed AI transmission, smart healthcare, and autonomous vehicles, showcasing significant potential. This expansive range of potential applications underscores the promising future of SiPh technology.

Major players in the semiconductor landscape, including TSMC, ASE, SunSin, and Accton, express bullish sentiments towards SiPh and CPO technologies.

However, current hurdles such as chip yields and standardization remain, awaiting resolution. The anticipated timeline for tangible contributions is expected to extend beyond 2025.

In the realm of photonic integration, TSMC takes the lead among Taiwanese manufacturers. The company’s Compact Universal Photonics Engine (COUPE) offers heterogeneous integration of Photonic ICs (PICs) and Electronic ICs (EICs), resulting in a 40% reduction in energy consumption and a considerable increase in customer adoption likelihood.

TSMC has reportedly invested in a 200-person R&D team, collaborating with international clients for joint development.

ASE is actively involved in the research and development of SiPh and CPO packaging technology. Leveraging the VIPack advanced packaging platform, the market anticipates a gradual uptick in related businesses in the latter half of 2024, with significant order momentum expected to surge in 2025.

Networking company Accton is channeling efforts into the photonic integration of various components for switches. On the other hand, SunSin, a System-in-Package (SiP) testing and packaging facility, is strategically positioning itself in CPO process technology.

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(Image: ASE)

ASE Holdings conducted an earning conference on October 26th to unveil its Q3 financial results and offer insights into future business prospects. All eyes are on ASE’s progress in CoWoS advanced packaging. Joseph Tung, the Chief Financial Officer (CFO) of ASE, expressed confidence in AI and ongoing investments in advanced packaging, expecting a twofold increase in revenue share for advanced packaging in the coming year.

The market’s attention is keenly focused on wafer bank (a storage system used in semiconductor manufacturing to keep semiconductor wafers on hand for production, helping to streamline the manufacturing process) levels and inventory management. Tung mentioned that wafer bank levels are consistently declining and will further reduce Q4. With consumer electronics and computer clients gearing up to launch new products, inventory levels are expected to be maintained at a certain level. Overall, inventory reduction is nearing completion.

Tung emphasized that the real challenge lies not in inventory reduction but in the timing of the recovery in consumer demands and the impact of inflation. ASE remains cautious in its outlook for the upcoming year.

As for AI-related developments, Tung is optimistic about the expansion of CoWoS advanced packaging capacity through TSMC. ASE is also set to boost its production capacity for advanced packaging to cater to urgent customer demands. Next year, it is expected that revenue in advanced packaging will double. Tung emphasized that the AI era has already arrived and expects AI to extend to more terminal devices over the next few years. ASE has also invested in the development of Co-Packaged Optics (CPO) technology, ready to meet customer demands when the market is prepared.

To seize opportunities in advanced packaging, ASE previously introduced an Integrated Design Ecosystem (IDE) to optimize collaborative design tools through a platform, systematically enhancing advanced packaging architecture. This initiative has the potential to reduce design cycles by approximately 50%.

Tung pointed out that there are signs of a recovery in PC-related chip testing and packaging, and this year’s performance in automotive chip testing and packaging is expected to outperform other segments.

Looking ahead to future market conditions, Tung believes that the global semiconductor industry’s environment in the coming year will be more favorable than the current year.

(Image: ASE)

According to a report by Taiwan’s Economic Daily, AI is driving a massive demand for data transmission, and silicon photonics and Co-Packaged Optics (CPO) have become new focal points in the industry. TSMC is actively entering this field and is rumored to be collaborating with major customers such as Broadcom and NVIDIA to jointly develop these technologies. The earliest large orders are expected to come in the second half of next year.

TSMC has already assembled a research and development team of over 200 people, aiming to seize the business opportunities in the emerging market of ultra-high-speed computing chips based on silicon photonics, which are expected to arrive gradually starting next year.

Regarding these rumors, TSMC has stated that they do not comment on customer and product situations. However, TSMC has a high regard for silicon photonics technology. TSMC Vice President Douglas Yu recently stated publicly, “If we can provide a good silicon photonics integration system, it can address two key issues: energy efficiency and AI computing capability. This could be a paradigm shift. We may be at the beginning of a new era.”

Silicon photonics was a hot topic at the recent SEMICON Taiwan 2023 with major semiconductor giants like TSMC and ASE giving related keynote speeches. This surge in interest is mainly due to the proliferation of AI applications, which have raised questions about how to make data transmission faster and achieve signal latency reduction. The traditional method of using electricity for signal transmission no longer meets the demands, and silicon photonics, which converts electricity into faster optical transmission, has become the highly anticipated next-generation technology to enhance high-volume data transmission speeds in the industry.

Industry reports suggest that TSMC is currently collaborating with major customers like Broadcom and NVIDIA to develop new products in the field of silicon photonics and Co-Packaged Optics. The manufacturing process technology ranges from 45 nanometers to 7 nanometers, and with mass production slated for 2025. At that time, it is expected to bring new business opportunities to TSMC.

Industry sources reveal that TSMC has already organized a research and development team of approximately 200 people. In the future, silicon photonics is expected to be incorporated into CPU, GPU, and other computing processes. By changing from electronic transmission lines to faster optical transmission internally, computing capabilities are expected to increase several tens of times compared to existing processors. Currently, this technology is still in the research and academic paper stage, but the industry has high hopes that it will become a new driver of explosive growth for TSMC’s operations in the coming years.

(Photo credit: Google)