Co-Packaged Optics in the AI Data Center: A Ten-Year Market and Technology Forecast

Table of Contents

Executive Summary

• E.1 Market Environment and Situations Influencing the Market
• E.2 Potential CPO Benefits
• E.3 Uncertainties Preventing a CPO Boom
  • E.3.1 Does AI Need CPO and is CPO Ready for AI?
• E.4 Technical/Market Evolution of the CPO Market for AI Applications
  • E.4.1 Adventures in Cooling
  • E.4.2 CPO Test Equipment: Sales Prior to the CPO Market
  • E.4.3 Other Technical Issues
• E.5 Why CPO is Likely to Succeed - At Least for Now
• E.6 Summary of CPO Market Forecasts 2026-2034

Chapter 1: Introduction

• 1.1 Background to this Report
• 1.2 Goals and Scope of this Report
• 1.3 Plan of this Report

Chapter 2: Co-packaged Optics: A Technology, Components and Business Opportunity Evolving

• 2.1 CPO in Traditional AI Data Centers
• 2.2 CPO for Next-Gen AI Data Centers
  • 2.2.1 CPO Data Rates
  • 2.2.2 Thermal Management
  • 2.2.3 Electrical Interfaces and Channel Loss
  • 2.2.4 Optical Interfaces
  • 2.2.5 Integration Strategies, Manufacturing and CPO
• 2.3 CPO-related Test Equipment
• 2.4 Optical Engines
  • 2.4.1 The Broadcom and NVIDIA Approaches
• 2.5 Fiber, Connector and Couplers for CPO
  • 2.5.1 Thoughts from Broadcom and NVIDIA
  • 2.5.2 Vertical Coupling
• 2.6 Fiber Solutions for CPO
  • 2.6.1 Multi-core fibers and Fiber Pitch Reduction
  • 2.6.2 Reducing the Pitch
• 2.7 Lasers for CPO
  • 2.7.1 External Lasers and ELSFP
  • 2.7.2 Module-integrated lasers

Chapter 3: CPO Standards and Implications

• 3.1 OIF and the Emergence of Co-Packaged Optics
  • 3.1.1 Framework IA (2022)
  • 3.1.2 OIF standards 3.2T CPO Module
  • 3.1.3 External Laser Small Form Pluggable ELSP IA (2023)
  • 3.1.4 CEI-112G / CEI-224G Electrical Interfaces
  • 3.1.5 IAs for CPO Management Interfaces
  • 3.1.6 Future IAs of the CPO Kind
  • 3.1.7 Telemetry and Management
• 3.2 CPO Standardization in China
• 3.3 UCIe and CPO
• 3.4 CPO and Ultra Ethernet
  • 3.4.1 Ultra Ethernet
  • 3.4.2 Advanced Photonics Coalition

Chapter 4: CPO Markets and Forecasts

• 4.1 Thoughts on the Growth and Size of the CPO Market
• 4.2 Organic Traffic Growth for CPO Impact on CPO Demand
  • 4.2.1 What Video Taught Data Centers: Bandwidth and Latency
  • 4.2.2 CPO Market by Size of Data Center
• 4.3 CPO and Hyperscale Data Centers
  • 4.3.1 Hyperscale Data Center Evolution
  • 4.3.2 A CPO Inflection Point by 2032: A Forecast
  • 4.3.3 Penetration of CPO into Switches
  • 4.3.4 Penetration of CPO into Data Servers
  • 4.3.5 Impact on Fiber and Data Center Rack Design
  • 4.3.6 Pricing of CPO Products
• 4.4 CPO and Conventional Data Centers: Prophesies
• 4.5 CPO and Edge Data Centers
  • 4.5.1 CPO at the Edge
• 4.6 CPO Data Center Interconnection
  • 4.6.1 Role of CPO in DCI
• 4.7 Non-AI Applications for CPO
  • 4.7.1 High-Performance Computing
  • 4.7.2 CPO's Impact on IoT
  • 4.7.3 CPO and Sensors
  • 4.7.4 Disaggregated Compute Systems: Applications for CPO

Chapter 5: End-user Perspectives, Strategies and Guidance: Problems Still to Overcome ?

• 5.1 AI Exaggerates the Importance of CPO!
• 5.2 Stage One: The Path to CPO - NPO, LPO and "Real" CPO
• 5.3 NPO (Near-packaged Optics)
  • 5.3.1 LPO (Linear Pluggable Optics)
• 5.4 Stage Two: Rebuilding the Infrastructure for CPO: Practical Considerations for Processes and Components
  • 5.4.1 Availability of Commercial Component Choices
  • 5.4.2 CPO and the Old Copper vs. Glass Debate
  • 5.4.3 Cooling, Power and Sustainability
  • 5.4.4 ELSFP and the CPO Supply Chain
• 5.5 Stage Three: Pilot Project, Plugfests and Demos
  • 5.5.1 Multivendor Plugfests
  • 5.5.2 Hyperscaler Internal Trials
  • 5.5.3 Vendor Demos

Chapter 6: Profiles: Suppliers and Influencers

• 6.1 AMD (United States)
  • 6.1.1 Acquisition of Enosemi
• 6.2 Ayar Labs (United States)
  • 6.2.1 Product Evolution
  • 6.2.2 Alchip Technologies/TSMC alliance
  • 6.2.3 Partnership with Quantifi Photonics
  • 6.2.4 Partnership with HPE
  • 6.2.5 Ayar the AI Infrastructure
  • 6.2.6 Financing and Collaborators
• 6.3 Broadcom (United States)
  • 6.3.1 Emerging CPO Product Range
  • 6.3.2 The Bailly Switch
  • 6.3.3 Long-term CPO Strategy at Broadcom
• 6.4 Ciena/Nubis (United States)
  • 6.4.1 Ciena's Long-term Participation in the CPO Market
• 6.5 Cisco (United States)
• 6.6 Coherent (United States)
  • 6.6.1 CPO Product Evolution
• 6.7 Corning (United States)
• 6.8 DuPont (United States)
• 6.9 Furukawa Electric (Japan)
• 6.10 Google (United States)
• 6.11 Hengtong Optic-Electric (China)
• 6.12 Huawei (China)
  • 6.12.1 Huawei Thinking on CPO
• 6.13 IBM (United States)
  • 6.13.1 IBM CPO-related Innovations in 2024-2025
• 6.14 Intel (United States)
  • 6.14.1 First Bi-Directional Compute Interconnect
  • 6.14.2 CPO and Multiwavelength Integrated Optics
  • 6.14.3 The Future of CPO at Intel
• 6.15 Kyocera (Japan)
• 6.16 Lightmatter (United States)
• 6.17 Lumentum (United States)
  • 6.17.1 CPO Related Activity
• 6.18 Marvell (United States)
  • 6.18.1 CPO and the Marvell XPU Architecture
  • 6.18.2 CPO and Marvell Switches
  • 6.18.3 Acquisition of Celestial AI
• 6.19 Meta/Facebook (United States)
• 6.20 Microsoft (United States)
• 6.21 Micas Networks (United States)
• 6.22 Molex (United States)
• 6.23 NVIDIA (United States)
  • 6.23.1 Silicon Photonics: Strengths and Architectures
  • 6.23.2 The NVIDIA Switch Family
  • 6.23.3 Emerging Markets for NVIDIA CPO Switches
• 6.24 POET Technologies (Canada)
  • 6.24.1 The POET Interposer
  • 6.24.2 Light Sources and Collaboration with Semtech and Sivers Semiconductors
  • 6.24.3 Recent Alliance with Quantum Computing Inc. (QCI)
  • 6.24.4 POET Products for AI Data Centers
  • 6.24.5 Manufacturing and Foreign Subsidiaries
• 6.25 Quantifi (New Zealand)
• 6.26 Ranovus (Canada)
  • 6.26.1 ODIN Optical Engine and its Versions
  • 6.26.2 Collaborations with AMD
  • 6.26.3 Collaborations with IBM
  • 6.26.4 DARPA, Cerebras Systems and Ranovus
  • 6.26.5 Alliance with Jabil
• 6.27 SABIC (Saudi Arabia)
  • 6.27.1 EXTEM Resin
  • 6.27.2 ULTEM Resin
• 6.28 Senko Advanced Components (United States)
  • 6.28.1 Acquisition of Cudoform
• 6.29 Skorpios Technologies (United States)
  • 6.29.1 The Skorpios Technologies Chip
  • 6.29.2 Applications
• 6.30 Sumitomo Electric (Japan)
  • 6.30.1 External Lasers
  • 6.30.2 Electronic Integration on Glass
  • 6.30.3 Fiber-array Interconnects for CPO
• 6.31 TE Connectivity (United States)
  • 6.31.1 The TE Path to CPO
• 6.32 Teramount (Israel)
• 6.33 Third-party Transceiver Suppliers and Distributors and the Future of CPO
• 6.34 Startups, Investors and Pure Players in CPO
  • 6.34.1 Product/Technology Focus of Future CPO Start-ups

About Lawrence Gasman and CIR

Acronyms and Abbreviations Used in this Report

List of Exhibits

• Exhibit E-1: Summary of CPO Markets by Type of Data Center ($ Millions)
• Exhibit 2-1: AI Data Center Switches Today
• Exhibit 2-2: Thermal Management for Future CPO: Technology and Opportunities
• Exhibit 2-3: Current Use of Silicon Photonics for CPO
• Exhibit 2-4: CPO Testing Functionality
• Exhibit 2-5: ELSFP: Possible Project Range
• Exhibit 3-1: Future IAs of the CPO Kind
• Exhibit 4-1: Types of AI Data Centers in 2025
• Exhibit 4-2: CPO Markets by Product Type in Hyperscale AI Data Center
• Exhibit 4-3: Switches in Hyperscale Network Racks
• Exhibit 4-4: How CPO Changes the Physical Rack Layout
• Exhibit 4-5: CPO Markets by Product Type in Non-Hyperscale AI Data Center
• Exhibit 5-1 NPO vs. LPO
• Exhibit 6-1: CPO Start-Ups