Investment Rating - The report rates the communication industry as "Outperform" [4] Core Insights - The communication sector has shown strong performance, with the Shenwan Communication Index rising by 6.27% during the week of December 8-14, 2025, significantly outperforming the broader market [12] - Cignal AI has raised its market size forecast for Optical Circuit Switches (OCS) to at least $2.5 billion by 2029, a 40% increase from previous estimates, driven by the expansion of AI and data center deployments [31] - UMC has obtained technology licensing for 300mm silicon photonics process from imec, which will accelerate the development of silicon photonics technology, addressing the bottlenecks of traditional copper interconnects [2] Summary by Sections Market Review - The communication sector ranked first among 31 Shenwan primary industries in terms of growth, with significant contributions from sub-industries such as communication network equipment (up 8.62%) and communication cables (up 8.28%) [15] - Notable stock performances included Dekoli (up 43.66%) and Zhongci Electronics (up 40.65%), while *ST Jinglun saw a decline of 13.99% [19] Industry Dynamics - UMC's licensing agreement with imec for the iSiPP300 silicon photonics process will enhance its capabilities in optical interconnect solutions, crucial for data centers and high-performance computing [24] - Nvidia has been granted permission to export its H200 AI chips to China, which could generate significant revenue despite a 25% revenue share to the U.S. government [28] - Cignal AI's report indicates that OCS technology is evolving from a niche application to a foundational technology for large-scale AI systems, with a growing number of active suppliers and deployment scenarios [31][32] - Broadcom's Q4 financial results showed a record revenue of $64 billion, driven by AI semiconductor sales, with expectations for continued growth in the upcoming quarters [35]

Core Viewpoint - United Microelectronics Corporation (UMC) has signed a technology licensing agreement with imec to acquire the iSiPP300 silicon photonics process, aiming to develop a 12-inch silicon photonics platform for next-generation high-speed connectivity applications [2]. Group 1: Technology Development - The iSiPP300 silicon photonics process is compatible with Co-Packaged Optics (CPO) and addresses the bottlenecks of traditional copper interconnects due to increasing AI data loads [2]. - UMC plans to combine imec's proven 12-inch silicon photonics process technology with its Silicon-On-Insulator (SOI) wafer process to offer a highly scalable Photonic Integrated Circuit (PIC) platform [2]. - UMC is collaborating with multiple new customers to provide photonic chips for optical transceivers, with risk production expected to begin in 2026 and 2027 [2]. Group 2: Market Implications - The partnership with imec is expected to accelerate the development of UMC's 12-inch silicon photonics platform, enhancing the market for silicon photonics solutions and facilitating the introduction of next-generation computing systems [3]. - The iSiPP300 platform features compact and efficient components, including micro-ring modulators and GeSi electro-absorption modulators (EAM), which will contribute to diverse low-loss optical fiber interfaces and 3D packaging modules [3].