Global chip manufacturing giant TSMC (TSM.US) is betting heavily on silicon photonics chips, the next generation of cutting-edge technology in chip manufacturing, to stimulate performance growth and strive to make generative artificial intelligence applications such as ChatGPT more powerful. Silicon photonics is an emerging technology field that combines silicon chips with optical technology.
TSMC is the world's largest contract chip foundry and is currently able to produce the most advanced artificial intelligence (AI) chips on the market, including Nvidia A100/H100 chips. TSMC executive Douglas Yu said that the company is currently looking to further improve the performance of AI chips.
"If we can provide a good silicon photonics integrated system... we can solve the key issues in energy efficiency and computing power (performance) of artificial intelligence," Douglas Yu said at a forum before the opening of the Taiwan Semiconductor Industry Expo in China on September 5. "This will be a new paradigm shift. We may be at the beginning of a new era."
Yu said the driver for a better, more integrated silicon photonics system is the immense computing power required to run large language models (LLMs) — the technology that underpins AI chatbots (such as ChatGPT and Google Bard) and other artificial intelligence computing applications.
According to media reports, TSMC has formed a research and development team of about 200 people to target the upcoming silicon photonic ultra-high-speed chip business opportunities next year. The company is not only actively promoting silicon photonic chip technology, but also cooperating with major customers such as Broadcom and Nvidia to jointly develop application scenarios centered on this technology. According to media reports, this cooperation aims to produce the next generation of silicon photonic chips. The relevant processes may cover 45nm to 7nm, and are expected to begin application terminals as soon as the second half of 2024.
The approach of Moore's Law to the limit has largely caused the performance enhancement of traditional electronic chips to slow down. Silicon photonic chips provide a performance enhancement solution based on light technology, which accelerates the expansion of chip performance despite the limitations of nanometer process technology.
As innovation and development in the global chip field enters the "Post-Moore Era", CPUs, which have been the main force in promoting the development of human society, are no longer able to achieve rapid breakthroughs at the "wide nm" level in less than 5 years like 22nm-10nm. Subsequent nm-level breakthroughs face many obstacles such as extremely high manufacturing costs and quantum tunneling technical difficulties.
However, with the advent of the AI era, it means that the demand for global computing power is experiencing explosive growth, and the demand for extremely high-performance chips will only grow. This has also made silicon photonic chips, which combine optical technology and silicon-based integrated circuits, increasingly important in the field of chip manufacturing.
Silicon photonics technology is a technology that integrates optical components such as laser devices with silicon-based integrated circuits to achieve high-speed data transmission, longer transmission distances and low power consumption through light instead of electrical signals. Additionally, it provides lower latency.
Silicon photonics has become an area of intensive investment in the chipmaking industry, with many technology companies eyeing its potential uses, from data centers, supercomputers and networking equipment to autonomous driverless cars and defense radar systems. Silicon photonics technology is currently used in fields such as optical communications and optical sensing, focusing on transmitting, processing and controlling optical signals; typical applications include data center interconnection, high-performance computing, optical fiber communications, etc.
Therefore, silicon photonic chips have considerable potential in high-bandwidth, low-power application scenarios such as high-speed data communications and data center interconnections. As the penetration rate of cloud computing services based on AI technology and ChatGPT generative AI applications increases, the demand for computing power surges, and silicon photonic chips may play an important role in these fields.
Tech giants such as Intel, Cisco and IBM have long been developing their own silicon photonics solutions and silicon photonics systems.
Nvidia, currently the world's most valuable chip company, currently has the largest market in chips that power accelerators for data center servers to develop/run large language models. The US company previously acquired fiber optic interconnect technology provider Mellanox.
Forecast data from the International Semiconductor Industry Association (SEMI) shows that by 2030, the global silicon photonics semiconductor market is expected to reach US$7.86 billion, with a compound annual growth rate expected to reach 25.7%, a significant increase from only US$1.26 billion in 2022.
The forecast data of Mordor Intelligence, a well-known research institution, is relatively conservative. The silicon photonics market size is expected to be US$1.49 billion in 2023. The agency predicts that it will reach US$4.54 billion by 2028, with a compound annual growth rate of 24.98% during the forecast period (2023-2028).
The agency noted that silicon photonics is a developing branch of photonics that has distinct advantages over electrical conductors in semiconductor products used in high-speed transmission systems. The technology promises to increase transmission speeds to 100Gbps, and technology companies such as IBM, Intel and Kothura have used the technology to achieve breakthroughs. Additionally, the technology has revolutionized the semiconductor industry, promising ultra-high-speed data transmission and processing.
TSMC executive Douglas Yu said that the chip manufacturing giant is studying chip manufacturing technology that uses its exclusively developed advanced chip stacking and packaging technology to build integrated silicon photonics systems. Advanced chip packaging has become an important area of great interest to several of the world's largest chip manufacturers - Intel, Samsung and TSMC, because advanced chip packaging technologies such as 2.5D/3D are helping them create more powerful chips.
But Yu also said that such an integrated system, which combines and connects silicon photonics and different types of chips, and uses its own advanced chip packaging and stacking technology, is still in development and trial production, and has not yet entered large-scale mass production.
Tien Wu, CEO of ASE Semiconductor (ASX.US), one of the world's largest chip packaging and testing service providers, has a similar view. He said that a new method of packaging and integrating silicon photonics technology will play a vital role in solving one of the key bottlenecks of the next-generation computing power system.
The current mainstream silicon photonics advanced packaging technologies include the following: Vertical Integration Packaging, Co-Packaged Optics (CPO), Fiber Attach Packaging, Waveguide-Based Packaging, and Glass Substrate Packaging.
Among them, CPO technology is an area of packaging technology that global chip manufacturers focus on. This is a highly integrated method of co-packaging optical and electronic components in the same package. This helps reduce the distance between optics and electronics, improving the energy efficiency and performance of data center interconnects. Industry analysts said that as chip giants such as TSMC, Intel, NVIDIA, and Broadcom have successively developed silicon photonic chips and the crucial co-packaged optics (CPO) technology, the CPO market is expected to experience explosive growth as early as 2024.
A recently released research report by Sphericalinsights, a well-known research institution, shows that the global co-packaged optics market is expected to grow at a compound annual growth rate of 68.9% from 2022 to 2032. The global co-packaged optics market is expected to reach US$2.84 billion by 2032. The agency estimates that the market in 2022 will be only US$15 million.
Sphericalinsights pointed out that silicon chip platforms are widely regarded in the industry as the most promising large-scale silicon photonics integration platform, while co-packaged optics are widely regarded as ideal for potential data center interconnects. Co-packaged optics (CPOs) or in-package optics (IPO) are complex hybrid combinations of optical devices and silicon-based devices on a single packaging platform, aiming to solve next-generation bandwidth and power consumption issues.
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