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GlobalFoundries, Tower Already Seeing Silicon Photonics Boom. Is SilTerra Malaysia’s Next Hidden AI Infrastructure Play?

The next AI bottleneck may not be compute.

It may be moving data fast enough between thousands of AI chips.

This is where silicon photonics is becoming strategically important.

Recent updates from $GlobalFoundries (GFS.US)$ and $Tower Semiconductor (TSEM.US)$ show that silicon photonics has moved beyond the technology demonstration stage.

GlobalFoundries disclosed that silicon photonics revenue exceeded US$200 million in 2025, roughly doubling from the previous year.

Management expects SiPho revenue to more than double again in 2026, implying a potential US$400 million+ annual business.

Tower Semiconductor's update was even more interesting.

Management stated silicon photonics reached a US$680 million annual revenue run rate in Q2 2026, compared with US$180 million a year earlier.

That implies roughly US$170 million quarterly revenue if annualised.

The key message:

Silicon photonics is no longer just a future technology story.

Customers are already spending. Foundry capacity is becoming a strategic asset.

AI data centres are moving from 800G to 1.6T and eventually higher-speed optical connectivity.

The winners may not only be chip designers.

The next opportunity could be the companies manufacturing the optical highway.

This brings Malaysia into the picture.

Silicon photonics manufacturing is not something every semiconductor fab can easily add overnight.

It requires:

– specialised photonics process technology

– silicon germanium capability

– optical wafer manufacturing know-how

– customer qualification

– proven high-volume production capability

This is where $DNEX (4456.MY)$ SilTerra becomes interesting. SilTerra has been building its Emerging Technology platform, including silicon photonics capability.

The company has been working with ecosystem partners to position itself in the growing photonics supply chain.

Recent updates showed strong momentum in its Emerging Technology segment, with silicon photonics becoming a key growth area.

The global supply chain shift is also creating another tailwind.

With increasing geopolitical pressure and customers seeking supply chain diversification, more semiconductor and optical companies are looking for manufacturing capacity outside China.

Malaysia already has a strong semiconductor ecosystem in testing, packaging and wafer manufacturing.

The question now:

Can Malaysia become part of the silicon photonics manufacturing map?

GlobalFoundries is showing SiPho can become a hundreds-of-millions-dollar business.

Tower is showing demand can scale even faster than expected.

SilTerra does not need to capture the entire market.

Even a small share of the global silicon photonics expansion could become meaningful for a Malaysian specialty foundry.

The AI race is not only about who builds the fastest chips.

It is also about who builds the fastest connection between those chips.

The next semiconductor opportunity may not be silicon alone.

It may be silicon carrying light.

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