Co-packaged optical (CPO) technology is entering the commercialization stage, driven by AI data center demand for higher bandwidth and lower power consumption. Volume production begins in 2026, with large-scale procurement expected in 2027–2028. Fiber alignment, thermal management, and testing costs are the three core technical barriers to production ramp. Silicon photonics wafers, InP substrates, and FAUs are highly concentrated among a limited number of suppliers, posing supply disruption risks. Taiwanese manufacturers are entering via contract manufacturing and assembly; securing upstream material access will be the defining strategic priority in the next phase. 

Key Highlights

• 2026 marks CPO's first year of volume production, with 2027-2028 as the critical window for large-scale deployment. 
• The three optical interconnect approaches will coexist in a tiered architecture; CPO will not displace LPO.
• Three technical barriers constrain CPO volume production: fiber alignment precision, thermal management, and testing and validation costs.
• Key materials are highly concentrated with limited substitutability, the single greatest supply chain risk to CPO scaling.
• Taiwanese manufacturers are entering via contract manufacturing and assembly; building upstream material supply resilience is the defining challenge for the next phase.

Table of Contents

1. CPO Background and Market Drivers
2. CPO Technology Architecture and Competitive Strategies
3. Global Major CPO Vendors' Mass Production Progress
4. Three Key Technical Hurdles to Mass Production of CPO
5. Key Materials Shortages and Supply Risks
6. TRI’s View

<Total Pages: 22>