For a decade, photonics packaging was the last mile of assembly that nobody talked about. AI has pushed it center stage, with the market set to grow from $4.5B to $14.4B in six years — driven not by transceivers but by three new tracks opening at once: CPO, AR microLED and FMCW LiDAR. Part 1 of the series lays out the big picture.

Silicon photonics leader Lightmatter unveiled microring-based 800G/1.6T interconnect technology at OFC 2026. It tackles thermal compensation in AI compute environments and, through 3D-stacked packaging and integration with the TSMC/ASE ecosystem, marks a new milestone for silicon photonics commercialization.

CoW hybrid bonding yield is first gated by the initial bonding-front angle. By tuning the angle to D so the bonding wave advances in order from center to edge, ASE lifted yield on 8×12×0.05mm dies from 2.8% to 99%, and held 95–99% on ultra-thin dies with 102.4µm warpage, 6µm pitch and organic interfaces, greatly widening the process window.

600mm panels give FOPLP high utilization but warp easily during assembly. ASE's hybrid flow — RDL on 600mm panels, assembly on 300mm panels — delivers 7.1x productivity at low risk, with 3-layer 5/8µm RDL, ±5µm placement accuracy and passing 3x/6x reflow. A pragmatic panel route for AI packaging.

Whether AI systems can ship no longer depends on process technology alone, but on integrating compute, optics and power at volume. ASE's CP Hung spelled out this shift with his “advanced packaging trilogy” — and as the battlefield moves from scaling to integration, Taiwan's supply chain holds a stronger hand.

Jensen Huang declared that "compute has been disaggregated"; Matt Murphy supplied the missing physical timeline. AI's next bottleneck is connectivity, and the deciding factor is a copper wall moving into the rack. Every doubling of bandwidth halves copper reach — at 400G/lane, copper can't even span a single rack, and physics forces CPO from slideware into shipments.

At OCP, ASE laid out CPO's three-step energy-efficiency math and delivered the most honest line of the event: almost nobody is talking about optical engine yield testing. CPO's technology debate is over; the yield debate has begun. The next signal to watch is not who announces more Tbps, but who first publishes KGOE test yield.