TAIPEI (Taiwan News) — MediaTek will invest NT$2.8 billion (US$88.9 million) in US startup Ayar Labs, entering the growing field of optical chip technology as data centers and artificial intelligence processors seek faster ways to transfer information.
The investment would be made through MediaTek’s subsidiary Digimoc Holding. If completed, the move would give the company a roughly 2.4% stake in Ayar Labs by acquiring about 1.72 million preferred shares, according to CTEE.
Ayar Labs specializes in silicon photonics chips that use light instead of electricity to transmit data. This technology can be incorporated into co-packaged optics, where optical components are integrated directly with processors or switches to improve speed and power efficiency over traditional pluggable modules.
Ayar Labs’ third-generation products are already working on TSMC’s advanced chip packaging platform. The company has also teamed up with Taiwanese chip designers Alchip Technologies and Global Unichip.
Semiconductor industry operators say MediaTek’s investment helps fill a gap in its optical chip technology portfolio and positions the company for the next generation of AI hardware. New 3.2-terabit optical modules and co-packaged optics are expected to grow quickly, changing how chips are designed.
Instead of using separate pluggable modules, electrical-to-optical connections will be integrated directly into chips, and chip designs will increasingly incorporate optical technology. Analysts note that AI data center competition is starting to shift from building more computing power to improving how efficiently data moves between chips.
Companies that master optical and electrical integration could gain a key advantage. However, optical interconnects enabled by silicon photonics are expected to complement existing modules rather than immediately replace them across all use cases.
Networking chipmaker Airoha Technology said pluggable modules will likely remain popular over the next five years since they are flexible and widely supported by cloud providers. Co-packaged optics, on the other hand, are aimed at ultra-high-speed applications and help reduce power use at extreme data rates.
