Chunghwa Telecom, Fujitsu, and 1Finity Are Building the Photonic Network That AI Data Centers Will Run On

The next generation of AI data centers will require network connectivity that today’s electronics-based infrastructure cannot deliver. The bandwidth AI inference workloads generate — with data transfers between compute nodes, storage systems, and model caches measured in tens of terabits per second and growing — is pushing electronic signal processing toward its physical limits in power consumption, latency, and density. The answer that NTT, Fujitsu, and a growing consortium of Asian telecoms have been developing since 2020 is All-Photonics Networks: communications infrastructure built on photonic rather than electronic signal processing, dramatically reducing energy use while delivering the low-latency, high-bandwidth connectivity that AI-scale distributed computing requires.

On July 22, 2026, Taiwan’s largest telecommunications carrier took a significant step toward deploying that technology commercially. Chunghwa Telecom, Fujitsu, and Fujitsu’s optical networking subsidiary 1Finity signed a two-year strategic memorandum of understanding covering both the expansion of All-Photonics Network deployment across Taiwan and the joint exploration of quantum technology applications for the next generation of communications security.

What Was Signed

Fujitsu’s global website confirmed the agreement on July 22, 2026, describing the partnership as accelerating APN deployment and advancing quantum technologies in Taiwan through a strategic partnership. The MOU formalises and extends an existing collaboration: Fujitsu and Chunghwa Telecom first signed a two-year strategic agreement in January 2024, and have been conducting APN technology verification in Taiwan since that date, using the IOWN framework — Innovative Optical and Wireless Network — as the underlying technical standard. The July 2026 MOU adds 1Finity as a third party and expands the scope to include both commercial APN deployment and quantum security research, deepening what had been an R&D collaboration into a combined deployment and innovation programme. The MOU covers three specific workstreams: using Chunghwa Telecom’s submarine cable systems to verify APN technology for international connectivity; testing the feasibility of distributed data centers connected via All-Photonics Networks; and jointly exploring quantum technology applications for distributed data center network control security.

What All-Photonics Networks Are

From Electronic to Photonic Signal Processing

In conventional telecommunications and data center networking, electrical signals are converted to optical signals for long-distance transmission over fibre and then converted back to electrical signals for processing at the receiving end. Each conversion — optical to electronic and back — consumes energy, introduces latency, and requires hardware that generates heat and occupies rack space. All-Photonics Networks eliminate a significant portion of those conversions by maintaining signals in the optical domain throughout transmission, switching, and routing operations rather than converting back to electronic signals at each network node. The result is dramatically lower power consumption per bit transmitted, lower latency, and the ability to carry much higher bandwidth over the same physical fibre infrastructure by reducing the signal processing overhead at each hop.

The IOWN Framework

All-Photonics Network is the core technology within the IOWN initiative, originally proposed by NTT Corporation. The IOWN Global Forum, which includes NTT, Sony, Intel, NVIDIA, Microsoft, Chunghwa Telecom, and dozens of other companies, was established to promote APN as an international standard for future communications infrastructure. Chunghwa Telecom and NTT activated the world’s first international IOWN APN connection — between Taiwan and Japan — in late 2024, demonstrating 100 Gbps bandwidth of optical path with 33.84 millisecond round-trip time across a near-3,000-kilometre network. That activation proved the technology works at international scale. The current Fujitsu-Chunghwa partnership is building from that proof of concept toward domestic commercial deployment within Taiwan’s existing submarine cable infrastructure.

1Finity’s Role

1Finity is Fujitsu’s optical networking subsidiary, providing the specific hardware and software components for APN switching and routing that a commercial deployment requires. Adding 1Finity to the existing Fujitsu-Chunghwa partnership is the step that converts a technology research collaboration into a commercially deployable system: 1Finity’s equipment provides the APN switching infrastructure, Fujitsu provides the system integration and software expertise, and Chunghwa Telecom provides the submarine cable plant and domestic network infrastructure across which the technology can be deployed and verified at production scale.

Why Submarine Cables Matter

The MOU’s specific focus on Chunghwa Telecom’s submarine cable systems is strategically significant for a reason beyond Taiwan’s domestic networking needs. Taiwan is one of the world’s most important submarine cable hubs: the island sits at the intersection of multiple transpacific and regional cable systems that carry a substantial fraction of the internet traffic flowing between Asia, the Americas, and the rest of the world. Submarine cable systems are also the infrastructure most exposed to the dual pressures driving this partnership: they must carry rapidly increasing bandwidth driven by AI data flows, and they must do so at power budgets constrained by the physical limits of undersea power feed systems. APN technology’s ability to deliver higher bandwidth at lower power consumption per bit is directly applicable to submarine cable amplifier and repeater design, where power efficiency is a primary engineering constraint. Taiwan’s geopolitical position adds a further dimension: as the island that manufactures a substantial share of the world’s advanced semiconductors, the resilience and security of its communications infrastructure — including its submarine cable connectivity — has become a strategic concern for both Taiwan itself and the allied countries that depend on Taiwanese chip manufacturing. As covered in our earlier reporting on NVIDIA’s partnerships across South Korea’s semiconductor infrastructure, the resilience of Asia-Pacific technology infrastructure has become a core concern for how global AI infrastructure investment is structured.

The Quantum Security Dimension

Why Quantum Security and APN Belong in the Same Agreement

The inclusion of quantum technology in the MOU alongside APN reflects a forward-looking but logical combination. Post-quantum cryptography — security protocols designed to remain secure against attacks from cryptographically relevant quantum computers — is becoming an urgent concern for communications infrastructure that carries sensitive or long-lived data, particularly after the US NIST published its first set of post-quantum cryptographic standards in 2024 and governments worldwide began mandating their adoption. Distributed data center networks, where compute workloads and model weights travel between nodes over physical infrastructure, are exactly the category of communications system that needs quantum-secure protocols: the data in transit is valuable, the infrastructure is long-lived, and an adversary who can record encrypted traffic today and decrypt it when quantum computers reach sufficient capability has an ongoing incentive to do so. The three partners will jointly explore quantum key distribution and quantum-secure authentication protocols applicable to distributed data center network control — specifically, the out-of-band signalling and orchestration systems that manage how workloads are routed across a photonic network.

Taiwan’s Quantum Security Incentive

For Taiwan specifically, quantum communications security carries a strategic dimension beyond the commercial business case. As a geopolitical flashpoint and home to globally critical semiconductor manufacturing, Taiwan’s communications infrastructure is a target for signals intelligence collection by multiple state actors. The combination of high-bandwidth APN for AI infrastructure connectivity and quantum-secure protocols for network control represents both a commercial next-generation infrastructure upgrade and a national communications security investment.

Backstory: Two Years of APN Verification in Taiwan

The July 2026 MOU is not a starting point — it is the commercial expansion of two years of prior technical work. Since the January 2024 MOU, Fujitsu engineers have worked with Chunghwa Telecom’s technical teams to establish an APN verification facility within Taiwan, test APN switching and routing under real network conditions, and develop the operational playbooks needed to integrate APN equipment with Chunghwa Telecom’s existing network management systems. That verification work is what makes the July 2026 expansion meaningful: the partners are not starting a research project, they are commercialising an approach that has been validated in Taiwan’s specific network environment over a two-year period. 1Finity’s addition to the partnership as a hardware supplier for the commercial deployment stage signals that the verification phase has concluded successfully.

What Happens Next

The two-year timeline of the new MOU, extending through mid-2028, spans three distinct workstreams that will proceed in parallel. APN verification on submarine cable systems will likely produce the first commercial results soonest, since the technical foundation is most mature. Distributed data center feasibility testing will take longer: connecting data center facilities to each other via APN requires both the switching hardware 1Finity provides and the orchestration software that manages workload routing across a hybrid electronic-photonic network. Quantum security protocol testing is the longest-horizon element — quantum key distribution hardware is maturing rapidly but is not yet at the cost point that makes it standard for data center network control, and the technical standards for integrating QKD with APN network control are still under development within the IOWN Global Forum. The partnership’s energy efficiency implications are directly relevant to the broader challenge documented in our analysis of AI infrastructure energy and water demand: a distributed data center architecture connected by APN rather than conventional electronic networking uses significantly less energy per bit of inter-node data transfer, which becomes a meaningful cost and carbon efficiency factor as the total volume of AI-driven data transfers continues to grow.

Why It Matters

The Chunghwa-Fujitsu-1Finity MOU matters for two distinct reasons. Commercially, it is the most concrete step yet taken by a Taiwanese carrier to deploy APN technology in a production telecommunications context, moving the IOWN initiative from international proof-of-concept to domestic commercial roadmap. At a broader infrastructure level, the combination of APN for energy-efficient high-bandwidth connectivity and quantum security for network control addresses the two most significant long-horizon challenges facing the global AI infrastructure buildout: the power and cooling costs of moving vast quantities of data between AI compute nodes, and the communications security requirements that protect the AI workloads and model weights travelling across that infrastructure. Taiwan, as both a major submarine cable hub and the global centre of advanced semiconductor manufacturing, is a strategically important place for that combination to be deployed first.

Sources

Fujitsu Global website (global.fujitsu), July 22, 2026. UDN Chinese-language reporting on Chunghwa Telecom announcement (udn.com), July 22, 2026. Chunghwa Telecom original 2024 MOU press release (cht.com.tw). Computer Weekly on NTT-Chunghwa International APN activation. TelecomLead Fujitsu-Chunghwa 2024 partnership coverage.