With the rapid development of data centers and artificial intelligence applications, the demand for CPO technology continues to rise. CPO technology is considered to be one of the optimal packaging solutions to achieve high integration, low power consumption, low cost and small size, and is recognized by the industry as the mainstream product form of higher speed optical communication in the future, and is expected to become the main focus of future competition in the industry. In the long run, with the continuous evolution of technology and the gradual expansion of the market, CPO is expected to reshape the optical communication industry chain and promote the transformation of optical modules from pluggable to sealed modules. According to market research firm Lightcounting**, shipments of CPO technology are expected to increase from 800g to 1The number of 6T ports will be gradually increased, and commercial use will begin in 2024-2025. By 2026 to 2027, CPO technology is expected to achieve large-scale mass production, and its market share will maintain rapid growth. According to **, by 2025, shipments of 800G CPO will exceed 1 million units, 800G and 1The total sales of the 6T CPO will exceed US$200 million. And by 2026-2027, 800g and 1The market share of 6T CPO is expected to maintain a year-on-year growth of more than 70% and exceed the US$800 million mark by 2027. CPO is expected to become the dominant enabling technology for cloud providers' data centers, initially applied to hyperscale data centers, followed by low-latency and high-speed applications to drive CPO demand, with artificial intelligence, machine learning, and other areas becoming the main drivers. Optical comparison of pluggable optical modules and co-packaging:
Profile**: Yole
In traditional optical communication systems, the connection between optical modules and chips is often quite complex, which not only increases the complexity and cost of the system, but also may reduce the communication efficiency. With the advent of CPO technology, this situation has changed radically.
Co-Packaged Optics (CPO) technology uses an innovative packaging method to tightly pack the optical module and chip in the same package, thereby greatly reducing the connection length and distance between them.
To put it simply, CPO is to continuously move the optical module closer to the switch chip, shorten the wiring distance between the chip and the module, and gradually replace the pluggable optical module, and finally package the optical engine and the electrical switch chip into a chip.
Source**: YoleCPO technology has achieved an important breakthrough in optical module packaging technology by packaging the optical transceiver optical engine and the electrical chip together, and only retaining the optical port as an interface with the outside world. This packaging method effectively shortens the distance between the optical engine and the switch chip, which in turn reduces the power consumption of the whole system, improves the signal density, and reduces the delay of data transmission. In addition, the co-packaged optical technology greatly shortens the distance between the IC and the optical engine, thereby reducing the power consumption of Serdes, improving the level of integration, and effectively avoiding the problem of yield degradation of multi-channel pluggable optical modules. CPO Structure Evolution Diagram:
Source**: Tencent Cloud's CPO solution bypasses the DSP (Digital Signal Processing) unit and heat dissipation structure in traditional optical modules, and adopts the co-packaging method of silicon photonic modules and ultra-large-scale CMOS chips. For data centers, fiber has a limited capacity per core, typically only 100-400g. Achieving large-scale data throughput requires an ever-increasing number of channels. CPO technology can meet this demand by increasing the level of integration and allowing more channels to be accommodated in a limited space, thereby greatly increasing the throughput capacity of the data center. According to relevant data, the power required for optical connection is expected to be reduced by more than 50% after the adoption of CPO technology. This means that data centers can achieve greener and more energy-efficient operations while ensuring high performance, and have a more obvious competitive advantage in AI and high-performance computing scenarios.
CPO can save power compared to pluggable optical modules
Fact**: Cisco
CPO technology is currently in the early stage of industrialization, and although it has great potential, it still faces a series of key technical problems that need to be solved urgently. CPOs face significant technical challenges in many aspects, including process, **, and testing. Among them, packaging process capability is one of the key factors restricting the development of CPO technology. The packaging of CPO involves a variety of advanced and complex packaging technologies such as TSV (through-silicon via) and T** (through-glass via). Each of these technologies has its own advantages and disadvantages, and needs to be continuously explored and optimized in the R&D and manufacturing process to find the most reliable solution. The development of CPO technology also faces challenges in many other aspects. For example, how to choose the appropriate optical engine modulation scheme to ensure the accuracy and stability of data transmission; How to construct the packaging between the internal components of the optical engine to achieve efficient photoelectric conversion and signal transmission; and how to achieve a feasible mass production of high-coupling efficiency light source coupling to improve the overall optical performance. According to a report by market research firm CIR, in the early stage of the development of CPO technology, that is, in 2023, the revenue of CPU equipment in hyperscale data centers will account for 80% of the total revenue of the CPO market. This suggests that the deployment of CPO technology will be largely driven by data center switching rates. As the switching rate of data centers continues to increase, the demand for CPO technology will continue to grow. Therefore, it is of great significance to solve the above key technical problems and promote the industrialization process of CPO technology to meet the needs of future data centers. 
Current 16T optical modules are accelerating the pace of commercialization, and the market demand has initially appeared, which is expected to become the core trend of development in 2025. According to Yole data**, by 2025, the CPO market will be dominated by 1The 6T light engine leads the application trend. And with the continuous iteration of the rate, after 2025 3The market share of 2T light engine will increase rapidly, 1The share of 6 tons is gradually decreasing. 2030 6The 4T optical engine is expected to start large-scale production, driving the rapid growth of the overall market space. With the continuous maturity and cost reduction of co-packaged optical technology, optical modules using this technology will gradually realize large-scale application. In November 2023, NVIDIA released its first new GPU, the H200, equipped with HBM3E memory. According to NVIDIA's latest product roadmap, it plans to launch higher-performance B100 GPUs in 2024, while the supporting IB switch Quantum and Ethernet switch Spectrum will also be upgraded to 800G interfaces. This trend will further drive the increase in the rate of network connection ports, which will accelerate 1Commercialization of 6T optical transceivers. At present, a number of domestic optical module companies, including Zhongji Innolight, Xinyisheng, Accelink, etc., have announced the launch of 16T optical transceiver products. These products mainly use 100G Serdes for electrical interfaces and single-wave 200G technologies for optical interfaces, showing that related companies have a certain degree of product maturity. According to Zhongji InnoLight, its AI major customers have clearly proposed to 16T optical modules to meet the requirements of GPUs with higher bandwidth and higher computing power in the future. This change in demand heralds 16T optical modules will play an important role in the future of data centers and AI computing. Zhongji InnoLight expects that in 2024 1The main work of 6T optical modules will be focused on testing, certification, and low-volume requirements, while the real large-scale production and application will begin in 2025. Progress of Major CPO Vendors:
Source**: Investment**Since 2020, CPO has gradually transformed from academic research results into products that meet market demand.
A number of large manufacturers with different backgrounds around the world have begun to deploy research and development in this field.
At present, cloud computing giants such as AWS, Microsoft, Meta, and Google, as well as network equipment leaders and chip leaders such as Cisco, Broadcom, Marvell, IBM, Intel, NVIDIA, AMD, TSMC, GF, and Ranovus, are forward-looking in the layout of CPO-related technologies and products, and promote CPO standardization.
Meta and Microsoft jointly created the CPO Alliance, which aims to attract leading companies in various industry segments to join and jointly promote the establishment of CPO standards and product development. Industry leaders such as Intel, Broadcom, and Marvell Technology have launched a number of CPO-based mass production products. Intel mentioned in its technology roadmap that in the future, it may combine XPUs with light engines to use optical signals to enable data communication between chips. The company has already demonstrated the industry's first switch product based on CPO technology in 2020, with 128tbps barefoot tofino2 chip and 16Tbps optical engine co-package. In addition, Intel also collaborated with Ayarlabs to report an optical IO link using FPGAs and silicon photonics chips in 2022, verifying for the first time512Tbps bandwidth signal interconnection.
intel 1.6 t silicon photonics engine with 128T programmable Ethernet switch with integrated CPO switch physical:
Cisco has developed its CPO technology through the acquisition of silicon photonics companies such as Lightwire, Luxtera, and Acacia. In 2020, ACACIA launched a 400G silicon optical transceiver solution, which first integrates discrete optical devices into PIC chips, then integrates them with self-developed DSP electrical chips on the SOI, and finally packages external lasers into optical modules. Acacia is also working with chipmaker Inphi in the area of CPO technology, with plans to launch 51. based on CPO technology in the future2Tbps switch. The development of the domestic CPO field is still in the development stage. Compared with foreign companies, domestic companies generally enter the CPO field late, and there is a certain gap in product development progress and technical research. As the only native CPO technical standard in China, the CPO standard led by CCITA is combining the differences in the development and application scenarios of optical interconnection technology at home and abroad, and uniting domestic manufacturers of optical modules, optical transceiver chips, electric drive amplifier chips, light sources, connectors and other manufacturers to jointly create a CPO standard that is more suitable for China. This initiative is expected to promote the rapid development and application of domestic CPO technology. Domestic manufacturers, including Accelink Technology, Hengtong Optoelectronics, Zhongji Innolight, Huagong Technology, Xinyisheng, Tongyu Communications, Hisense, Borche Technology, Cambridge Technology, Liante Technology and Ruijie Network, have begun to set foot in the field of optoelectronic co-packaging; In terms of equipment manufacturers and end users, large manufacturers such as Huawei, Tencent and Alibaba have also entered the game.
With the first-mover advantage in the 400G era, leading domestic manufacturers are expected to continue to achieve leading advantages in the era of high-speed optical modules and make breakthroughs in the field of co-packaging optics. CPO progress of some domestic manufacturers:
Source**: Opportunities and Challenges of Optoelectronic Co-packaging Technology in the Era of Big Data" Leading companies in the field of upstream optical devices, such as Tianfu Communication and Liante Technology, are actively expanding their business territory and working together with international industry giants to jointly develop innovative CPO optical engines. With the cyclical intergenerational update of optical modules, the downstream market has put forward higher requirements for key indicators such as power consumption and cost. This has promoted the continuous penetration and popularization of technologies such as CPO and silicon photonics, and opened the door for more optical module manufacturers to enter the high-end product chain. This trend not only brings opportunities for these enterprises to transform and upgrade, but also with the gradual reduction of the highest cost, the profitability of optical module enterprises is also expected to be stabilized or even further improved, so as to form a more virtuous development cycle in the entire industry. With the rapid growth of AI large model training, the construction demand for AI server clusters has also increased dramatically. This is not only driving innovation in intra-cluster communication technology, but also creating a clear need for high-performance devices such as AI data switches and high-speed optical transceivers. Accelerating the localization process of high-end optical modules and CPOs and improving the ability of independent innovation has become an important task facing China's optical communication industry.
At present, there are still many key technical problems that need to be solved urgently in CPO, such as how to choose the modulation scheme of the optical engine, how to build the packaging between the internal components of the optical engine, and how to realize the coupling of light sources with high coupling efficiency feasible for mass production. Traditional designs based on discrete optical engines such as EML and DML can no longer meet some of the space requirements of co-packaging. Judging by industry trends, the CPO will be at 51The era of 2T switches will become an important technology school, and it will become an indispensable technology in the optical communication industry in a few years, and the combination of silicon photonics technology will maximize the advantages of co-packaged products.