TSMC Begins Mass Production of COUPE Silicon Photonics Platform as AI Data Centers Shift from Copper to Light
TSMC's Compact Universal Photonic Engine enters volume production in 2026, with NVIDIA's Spectrum-X Photonics switches and AMD's new $280 million R&D hub positioning optical interconnects as the successor to copper wiring in AI infrastructure.
The End of Copper
TSMC has begun mass production of its Compact Universal Photonic Engine (COUPE) platform, marking the first time a leading-edge foundry has manufactured silicon photonics at scale for AI data center applications. The technology replaces traditional copper electrical interconnects with optical signals carried by light through silicon waveguides, delivering higher bandwidth at a fraction of the power consumption.
COUPE uses TSMC’s SoIC-X chip stacking to bond an electrical die directly on top of a photonic die, minimizing the distance between compute and optical components. The first-generation product targets OSFP connectors with data transfer rates of 1.6 Tbps, double the maximum of current copper Ethernet solutions. A second generation, expected to integrate into CoWoS packaging with co-packaged optics by 2027, aims for 6.4 Tbps at the motherboard level, while a third generation on the COUPE roadmap targets 12.8 Tbps within processor packages.
NVIDIA and AMD Race to Deploy
NVIDIA is the most visible early adopter. The company introduced two silicon photonics-based switching platforms at GTC 2025: Spectrum-X Photonics for Ethernet and Quantum-X Photonics for InfiniBand, each capable of 400 Tb/s aggregate throughput. Both are built on TSMC’s COUPE technology and are expected to ship in the second half of 2026. NVIDIA has argued that silicon photonics and co-packaged optics will become mandatory for next-generation AI data centers, where GPU clusters are scaling toward millions of accelerators.
AMD is also investing heavily. The company established a $280 million silicon photonics R&D center in Taiwan to accelerate its own co-packaged optics roadmap. While AMD has not publicly committed to COUPE specifically, the proximity of its new facility to TSMC’s advanced packaging operations suggests close collaboration.
First Working Demonstrations
The technology has already moved beyond concept stage. In December 2025, Alchip and Ayar Labs demonstrated the industry’s first TSMC COUPE-based optical connectivity solution for next-generation AI chips. Ayar Labs, which counts NVIDIA, AMD, and TSMC among its investors, has been developing optical interconnect technology for chip-to-chip communication and views COUPE as the manufacturing backbone for its TeraPHY product line.
The demonstration validated that photonic and electronic integrated circuits can be combined using TSMC’s 3D stacking process without compromising the performance of either component, a key concern that had slowed earlier co-packaged optics efforts.
Why It Matters
The shift from copper to optical interconnects addresses a fundamental scaling problem. As AI models grow and GPU clusters expand, the electrical wiring connecting chips becomes the primary bottleneck, consuming disproportionate power and adding latency. Co-packaged optics positions optical engines directly adjacent to processors, reducing per-port power consumption from approximately 30 watts to 9 watts according to industry estimates, a 3.5x improvement. For a data center with 1,000 switches, that translates to savings exceeding 2.6 megawatts.
Samsung’s foundry division has announced competing plans, with optical engines targeted for 2027 and turnkey co-packaged optics services by 2029. Samsung has emphasized its vertically integrated memory capabilities as a differentiator, offering HBM, foundry, advanced packaging, and silicon photonics within a single platform. TSMC, which relies on external memory suppliers, maintains a significant timeline advantage but faces the challenge of coordinating a complex supply chain with partners including Coherent, Sumitomo Electric, and Advantest.
Taiwan’s broader semiconductor ecosystem is also mobilizing. In 2024, more than 30 companies including TSMC, ASE, Foxconn, and MediaTek formed the Silicon Photonics Industry Alliance to coordinate development across the supply chain, signaling that the island’s chip industry views photonics not as a niche technology but as the next major platform shift.