Co-Packaged Optics Gains Traction
Co-packaged optics (CPO) is emerging as a critical technology for AI data centers as traditional copper interconnects reach their physical limits at 1.6T speeds. The transition to silicon photonics is considered mandatory, creating a potential $25 billion market by 2030. Nvidia is actively pursuing this space, partnering with Tower Semiconductor to develop silicon photonics for 1.6T optical modules.
- Co-packaged optics can reduce power consumption by over 50% compared to traditional pluggable optical modules, dropping from 15-20 picojoules per bit (pJ/bit) to as low as 5-10 pJ/bit by shortening the electrical signal path from centimeters to millimeters. Meta's testing of Broadcom's CPO switch demonstrated a 65% reduction in optical power consumption. - Major competitors are actively shipping CPO products. Broadcom is delivering its Bailly 51.2 Tbps CPO Ethernet switch, which it claims reduces power consumption by 70% compared to pluggable transceivers. Marvell is also integrating CPO into its custom AI accelerators and has demonstrated a liquid-cooled CPO switch design in collaboration with Jabil. - The OIF (Optical Internetworking Forum) is driving standardization to ensure interoperability, a key challenge for adoption. They have released a Co-Packaging Framework Agreement and initiated projects for a 3.2T Module and an External Laser Small Form Factor Pluggable (ELSFP) to create a common foundation for vendors. - While promising, CPO adoption faces hurdles including higher initial costs, thermal management challenges from integrating optics and electronics, and operational complexities related to field serviceability and reliability compared to easily replaceable pluggable modules. - The market for co-packaged optics is projected to see significant growth, with one forecast predicting a market size exceeding $1.2 billion by 2035 at a CAGR of 28.9% and another suggesting it could reach $20 billion by 2036. - CPO enables higher bandwidth density, allowing for switch capacities of 51.2 Tbps and beyond, which can lead to network designs with double the bisection bandwidth and 64% fewer switches compared to current systems. - An intermediate step between pluggable modules and full CPO is Near-Package Optics (NPO), which places the optical engine adjacent to the ASIC on the same circuit board, offering a 2-3x increase in interconnect density over pluggables as a transitional technology. - Future advancements are already in progress, with Broadcom announcing its third-generation CPO technology capable of 200G per lane and planning for a fourth-generation 400G/lane solution. The industry is also looking ahead to 3.2T optical transceivers to meet the demands of next-generation GPUs.
