Taiwan Semiconductor Manufacturing Co. is leveraging its partnership with Marvell Technology to accelerate development of silicon photonics technology, marking the foundry giant’s strategic expansion beyond conventional chip manufacturing into next-generation optical communication systems.
TSMC’s collaboration with the California-based chip designer involves production of application-specific integrated circuits using the foundry’s most advanced 3-nanometer and upcoming 2-nanometer processes. More significantly, the partnership will incorporate TSMC’s Compact Universal Photonic Engine (COUPE) platform, which integrates photonic and electronic circuits to enable data transmission speeds exceeding traditional electrical connections by more than tenfold.
The Taiwanese manufacturer commands over 67% of the global foundry market, with Samsung Electronics trailing at 7.7%. TSMC’s dominance stems from its technological leadership in advanced processes, making it the preferred manufacturing partner for leading semiconductor companies. The company’s entry into silicon photonics represents a calculated move to capture additional value in the expanding artificial intelligence infrastructure market.
TSMC’s COUPE technology stacks electronic integrated circuits on photonic integrated circuits using the company’s advanced packaging capabilities. This approach addresses growing bandwidth demands in data centers by replacing electrical signals with light-based communication, reducing power consumption while increasing data transmission rates.
The foundry’s silicon photonics initiative comes as major cloud service providers accelerate development of custom AI chips. Marvell, which holds approximately 15% of the custom semiconductor market, has secured contracts with Amazon, Google, and Microsoft. The company’s AI-related revenue exceeded $1.5 billion in fiscal 2025, with projections surpassing $2.6 billion for fiscal 2026.
TSMC’s technological advancement in photonics positions the company to benefit from the projected growth of the custom chip market, estimated to reach $32.8 billion by 2031 from $20.3 billion currently.
