[News] TSMC PIC Capacity Seen Surging to 25K Wafers/Month by 2028; NVIDIA, Broadcom Eyed as Early COUPE Customers

TSMC’s push into silicon photonics is drawing growing market attention, with wafer capacity for PIC (Photonic Integrated Circuits ) expected to expand significantly. According to Commercial Times, institutional investors estimate that TSMC’s PIC capacity will increase from around 500 wafers per month to 10,000 wafers by the second quarter of 2026, rise further to 15,000 wafers by the fourth quarter, and reach at least 25,000 wafers per month by 2028.

As the report highlights, given limited PIC production capacity during the initial ramp, the primary customers for volume production on TSMC’s COUPE platform in 2026–2027 are likely to be NVIDIA, Broadcom, and AMD. As capacity expands further in 2028, CPO projects from customers such as MediaTek, Marvell, and Ayar Labs could also enter TSMC’s volume production platform.

PICs are responsible for converting, routing, and coupling electrical and optical signals. As AI server clusters continue to expand and switch bandwidth advances from 25T and 50T to 100T and 200T, demand for optical engines is also increasing, making the progress of TSMC’s COUPE platform a key market focus, the report adds.

According to the report, assuming 648 dies per wafer, increasing TSMC’s monthly PIC capacity from 500 wafers to 10,000 wafers would boost annual PIC output from approximately 4 million to 78 million units. If capacity further expands to 25,000 wafers per month, annual PIC output could reach approximately 194 million units.

Based on these projections, the report highlights three key implications of TSMC’s PIC production capacity expansion. First, it indicates that CPO is gradually moving beyond the experimental and small-volume validation stage toward mass production readiness. Second, the integration of silicon photonics with advanced packaging is expected to create a more comprehensive AI optoelectronic platform combining COUPE, SoIC, and CoWoS. Third, higher PIC output is expected to drive demand for fiber array units (FAUs), lasers, optical testing equipment, probe cards, test sockets, and automation equipment.

TSMC’s COUPE Platform Advances Toward Commercialization

As noted by Economic Daily News, TSMC has announced that the world’s first 200Gbps micro-ring modulator (MRM) based on its COUPE platform is scheduled to enter mass production later in 2026. The company also said the device has achieved a bit error rate below 1E-08 under process-controlled conditions.

However, Commercial Times also points out that increased PIC capacity does not necessarily mean CPO will immediately ramp into large-scale production. Downstream processes must still pass multiple stages, including SoIC integration, optoelectronic testing, optical engine packaging, FAU coupling, and system-level validation.

Read more

• [News] TSMC Targets 2H26 COUPE on Substrate; NVIDIA Could Eye Long-Term Substrate Deals Amid CPO Push
• Optical Interconnects Become Critical to AI Factory Expansion; CPO/NPO Market Expected to Exceed US$39 Billion by 2030, Says TrendForce

(Photo credit: TSMC)