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Taiwan aims to build domestic silicon photonics supply chain with TSMC mentorship
Tuesday, March 3, 2026 at 02:06 AM
Taiwan's National Science and Technology Council is pushing to develop a localized silicon photonics ecosystem. The government aims to bring equipment and material production to Taiwan and has requested TSMC to provide technical mentorship to traditional industry players transitioning into silicon photonics manufacturing.
Context
Taiwan’s National Science and Technology Council has officially designated silicon photonics as a core strategic industry, launching a state-led initiative to localize the production of critical equipment and materials. Under this plan, TSMC will serve as a primary mentor to traditional manufacturing firms, facilitating their transition into the high-tech supply chain for light-based chip technology. This move aims to secure Taiwan’s lead in the global AI infrastructure market by addressing the power and bandwidth bottlenecks of traditional copper interconnects through co-packaged optics.
The government has initially allocated NT$500 million to catalyze research, with a broader NT$299.2 billion budget proposal for 2026 intended to accelerate the "New Ten Major AI Construction Projects." This timeline is critical as TSMC plans to move its 1.6T optical engines into mass production in the second half of 2025 and throughout 2026. Industry experts view 2026 as the global "takeoff" year for silicon photonics, with the total addressable market for AI inference technology projected to exceed US$100 billion by 2028.
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