News
Published: December 2025 | Category: Technology, AI Infrastructure
To understand Co-Packaged Optics (CPO), we first need to grasp the hardware foundations of artificial intelligence. AI hardware revolves around three core pillars: computing power, storage, and networking. This article will explain the role of optical modules and the transformative potential of CPO technology in data centers.
Servers are the backbone of computing power, integrating storage and networking capabilities, serving as the critical node connecting the three core pillars.
High-speed transmission relies on optical signals, which are much faster than electrical signals. Below is a breakdown of networking components:
| Component | Primary Function | Description |
|---|---|---|
| Network Interface Card (NIC) | Connection and Adaptation | Connects servers to switches, handling data transmission and protocol adaptation. |
| Switch | Distribution and Routing | Routes and forwards data between computing chips and storage devices. |
| Optical Module | Optoelectronic Conversion | Acts as a bridge for photoelectric conversion, transforming electrical signals into optical signals for fiber transmission and back. It is the carrier of bandwidth and data rates. |
Transmission rate refers to the amount of data transmitted per second, measured in bps (bits per second).
Market Insight: According to industry research firm LightCounting, 800G and 1.6T optical modules are expected to grow rapidly by 2026. By 2030, the combined market size for 800G and 1.6T Ethernet optical modules is projected to exceed $22 billion.
| Rate Category | Speed | Primary Applications | Current Status |
|---|---|---|---|
| Basic Rate | < 10G | Home broadband, enterprise networks | Mature |
| Mid-to-High Rate | 25G / 40G / 100G | 5G transport networks, data center access layers, basic cloud interconnects | Widely deployed |
| Ultra-High Rate | 200G / 400G / 800G | Current mainstream AI data centers | Current standard |
| Cutting-Edge Rate | 1.6T / 3.2T | Core of CPO technology, serving AI clusters with tens of thousands of GPUs | Emerging/in development |
Simply put, CPO is the next-generation optical module technology—a more advanced form of optical modules.
CPO (Co-Packaged Optics), also known as co-packaged optics, integrates optical engines and switch chips directly onto the same substrate, significantly reducing the distance for photoelectric signal conversion and transmission.
Traditional (Pluggable): Optical modules are pluggable devices, with one end connecting to servers to receive electrical signals and the other to fiber. This separation can lead to signal latency and power loss during transmission.
CPO (Co-Packaged): The core component—the optical engine—is directly integrated into the switch chip package, reducing signal transmission distance from centimeters to millimeters.
Advantages of CPO: Moving from pluggable to co-packaged delivers higher data rates, lower power consumption, and smaller form factors.
Core Applications: AI computing clusters and hyperscale data centers. CPO aims to address the bottlenecks of high bandwidth, low latency, and high-efficiency interconnects.
At the 2025 GTC conference, NVIDIA unveiled two CPO switches—Spectrum-X and Quantum-X—integrating 1.6Tbps optical engines with switch chips. These products have been adopted and validated by Meta and Oracle.
Performance Comparison: Compared to traditional pluggable solutions, NVIDIA's CPO switches claim 3.5x lower power consumption, 63x better signal integrity, and 10x greater network elasticity.
Market Forecast: According to research firm Yole, driven by the ecosystem of global AI giants, the CPO market is projected to surge from $46 million in 2024 to $8.1 billion by 2030, with a compound annual growth rate of 137%.
Key Note: CPO does not entirely replace traditional optical modules but coexists in specialized scenarios. Traditional pluggable modules remain mainstream for cost-sensitive or flexible applications (e.g., telecom access and long-distance transport), but in hyperscale data centers and AI computing clusters where efficiency and density are critical, CPO's advantages are unmatched.
A global leader in optical modules, ranking first in domestic shipments of 800G/1.6T modules. It is a core supplier for NVIDIA, Microsoft, AWS, and other top clients, playing a leading role in domestic high-end optical module technology. The company is actively developing CPO technology and is a key supplier of optical engine components for NVIDIA's CPO switches.
The second-largest optical module manufacturer after Xunichuang, with similar business and client structures. Its CPO technology is currently in the R&D and strategic reserve phase.
An optical component supplier (upstream in the optical module supply chain) that has entered NVIDIA's CPO switch supply chain. It is developing laser diodes and optical transmitter components tailored for CPO.
Conclusion: While CPO represents a major breakthrough for the most demanding AI and hyperscale computing environments, its widespread adoption still faces challenges in technological maturity, cost, reliability, and the ongoing evolution of pluggable solutions. The transition will be gradual, with both technologies coexisting for some time, serving different market segments.
