On July 14, United Microelectronics Corporation (UMC) announced that its 12-inch silicon photonics production line in Singapore has begun volume production of advanced photonic chips, addressing growing demand for high-speed interconnects in AI data centers. UMC Senior Vice President Steven H. K. Hong said silicon photonics and CPO technologies will become important growth drivers for the company over the next several years. Shifting photonic chip production from traditional 8-inch wafers to 12-inch wafers can effectively reduce optical loss while improving power efficiency and transmission performance. Singapore-based photonic chip company Silith Technology has become the first core strategic customer of the production line. Its customers include optical module maker Zhongji Innolight and Coherent, both of which are major suppliers to Nvidia and Google. UMC is also jointly building a photonic chip production platform with Belgium-based microelectronics research center imec, with plans to open the platform to more customers starting in 2027. On the packaging side, UMC plans to launch customized advanced packaging services in 2027, connecting photonic chips to interposers to shorten electrical transmission paths. In its long-term roadmap, UMC plans to launch an open silicon photonics development platform in 2028 while also carrying out R&D on thin-film lithium niobate chiplet technology. China’s Taiwan region and Singapore will jointly serve as UMC’s main R&D and manufacturing bases for photonic chips and advanced packaging. The company has already assembled a specialized technical team of around 100 people.
On July 8, onsemi announced that it has entered into definitive agreements with counterparties to sell two chip manufacturing facilities located in the Philippines and Pennsylvania, United States. The move is part of the company’s “Fab Right” strategy, aimed at improving its overall manufacturing cost structure and driving continued gross margin expansion. The two transactions are expected to generate approximately USD 35mn in annual cost savings for onsemi. Initial savings are expected to begin in 2027, with the full savings to be realized in 2028. Under the agreements, onsemi will sell its facility in Tarlac, Philippines to Greatek Electronics, a Taiwan-based OSAT provider under Powertech Technology Group. The transaction is expected to close within the next three to six months. The two parties have also entered into a long-term supply agreement to ensure that onsemi can continue meeting customer commitments after the transaction closes. In addition, Sweden-based Silex Microsystems will take over onsemi’s facility in Mountain Top, Pennsylvania. The transaction is expected to close in January 2028. The extended transition period is designed to allow onsemi to transfer products currently manufactured at the facility to other fabs within its network in an orderly manner, ensuring business continuity for customers.
South Korea Plans Approximately KRW 800tn Investment to Build Four Chip Fabs in Southwest Region, with Samsung and SK Hynix Each to Build Two
On June 29, South Korea’s Minister of Trade, Industry and Energy Kim Jung-kwan said that four chip fabs are expected to be built in the country’s southwest region, with total investment of approximately KRW 800tn, equivalent to around RMB 4.2tn. Samsung Electronics and SK Hynix each plan to build two fabs. At the same time, the South Korean government said investment in the semiconductor sector over the next 15 years is expected to reach at least KRW 30tn, covering areas including next-generation memory, edge AI, and defense applications. Under the plan, the central region will focus on advanced packaging, while the southeast region will develop semiconductor materials, components, equipment, and next-generation power semiconductor clusters. Investment in the chip packaging cluster in the Chungcheong region is expected to reach KRW 81tn.