Direct:
Two large non-Nvidia chip designers are funding their own silicon photonics suppliers in Taiwan, and one of those suppliers just turned profitable on the strength of it. BE Epitaxy Semiconductor, a Taiwanese SiPh design house, reportedly flipped to profit in 2025 on orders and funding from AMD (NASDAQ: AMD) and MediaTek (TPE: 2454), with 800G and 1.6T co-packaged optics as the target.
Optical interconnect is becoming a hard constraint for AI clusters, and the supply base is concentrated. Innolight (SHE: 300308) holds more than half of Nvidia's (NASDAQ: NVDA) 800G module procurement. A bigger pinch sits a layer upstream, in indium phosphide laser epitaxy, where global capacity is thin and lead times are long. Control there buys real leverage over how fast 1.6T optics can ship.
AMD has been telegraphing this move for two years. It teamed with two Taiwan startups for SiPh R&D in late 2024, bought Enosemi outright in May 2025, and is standing up a silicon photonics R&D center in southern Taiwan under Taiwan's A+ program, total investment above NT$8.64 billion (roughly USD$270 million). MediaTek came at it from the module side, taking a stake in Ayar Labs and demonstrating an 8x800G CPO engine with Ranovus.
Both are hedging the same risk. Neither wants to depend on the Nvidia-aligned optics circle of TSMC (TSM), Coherent (COHR), Corning (GLW) and Lumentum (LITE), or on Innolight's module capacity, when their own AI silicon needs the same parts. Capitalizing a small Taiwanese epitaxy and design shop is a low-cost way to secure early supply.
The demand behind it is concrete. Forecasts have 1.6T module shipments rising from roughly 2.5 million units in 2025 to around 20 million in 2026 as AI networking upgrades roll through, and TSMC's COUPE packaging reaches volume this year. The suppliers getting capitalized now are the ones positioned to feed that.
One caveat on the specifics. The BE Epitaxy profit figure traces mainly to Taiwanese trade press, and “profitable” for a design house this size is a small absolute number. The structural read, AMD and MediaTek buying into Taiwan's optics supply base, is plausible across several independent threads.
Drafted with AI assistance against parallel reporting.
Sources:
- DigiTimes, “BE Epitaxy Semiconductor targets 1.6T CPO with AMD, MediaTek,” Jun 2026
- TrendForce, AMD Taiwan SiPh R&D center under A+ program (NT$8.64B), Oct 2025
- TrendForce, AMD-Taiwan SiPh startup partnership, Sep 2024
- TechCrunch, AMD acquires Enosemi, May 2025
- TrendForce, TSMC COUPE 2026 production, Apr 2026
- wccftech, MediaTek stake in Ayar Labs
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