The Future and Reality of CPO Optics: Silicon Photonics Packaging, System Design and Taiwan's Supply Chain Decoded

🔍 Introduction | Who Is Disrupting the Golden Age of Pluggables?

As AI training scales explode, data center architectures are evolving from simple scale-up to complex scale-out designs, and data movement is becoming an ever more pronounced bottleneck. Co-Packaged Optics (CPO) is seen as a potential answer: by tightly integrating the optical engine with the ASIC, it promises to tackle system power consumption and interconnect losses.

But theoretical advantages often meet a harsh reality in practice. From pluggables to OBO, then NPO, and finally true CPO, the industry has spent years in trial and error, and the technology is still taking shape.

Taking a view as close as possible to the production line and the supply chain, this article breaks down where CPO technology stands today, its market bottlenecks and the actual progress of each player, and analyzes the positioning and competition among key players in Taiwan's and the global supply chain.

Five Key Takeaways

• 🔥 Is CPO a vision or a mirage? From Microsoft OBO and Broadcom NPO to NVIDIA Quantum Spectrum, who has actually commercialized it?

• 🌡 Why do pluggable modules still dominate? The practical realities of thermal design and serviceability.

• 🧠 A full breakdown of Broadcom's and NVIDIA's two CPO architecture strategies.

• 🏗 TSMC's silicon photonics packaging strategy, and the supply chain contest among FOCI, Shunsin and Browave.

• 📈 CPO market share forecasts through 2030, the expected decline of pluggable modules, and the outlook for the 3.2T and 6.4T generations.

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🔍 Why Are Pluggable Modules Still Irreplaceable?

Although CPO is seen as the future, 800G and 1.6T modules remain mainstream today. According to LightCounting, pluggable modules will still hold roughly 16–29% share of the 3.2T generation in 2030.

The main reasons include:

• High serviceability (modules can be swapped quickly)

• High design stability and maturity

• No major overhaul of system operations required

CPO's advantages, such as lower power, shorter electrical traces and a heatsink shared with the ASIC, are attractive, but reliability, serviceability and manufacturing maturity are still in the "validation phase."

🔍 OPO vs. NPO vs. CPO vs. OIO Architecture Comparison

Architecture	Location	Thermal	Loss	Flexibility	Lead companies
OPO	On the PCB	Not integrated	High	High	Microsoft (abandoned)
NPO	Near the ASIC	Can share heatsink	Low	Medium	Broadcom
CPO	On the ASIC package	Fully integrated	Very low	Low	Broadcom, NVIDIA
OIO	GPU/TPU card side	Moderate	Medium	Medium	Broadcom, Meta, Ayar Labs

🔍 Broadcom vs. NVIDIA: The Two Giants' Strategies

Broadcom

• Flagship products: TH4, TH5, TH6

• Customers: Meta, Alibaba, Tencent and others

• Module partners: Shunsin (assembly), Chung Da (lasers), SPIL (packaging)

NVIDIA

• Flagship products: Quantum Spectrum series (Pro Compact)

• Architecture: Spectrum built from four 28.8T switches, with a technical bar similar to TH4

• Deployment expected in 2025–2026 (approx. USD $xxxxx)

• Initial volume will be driven by NVIDIA itself, with estimated shipments of <xxx units per year

  
  

🔍 Taiwan's Supply Chain: Who Is Winning, and Who Is Still Waiting?

• FOCI: Pushing hard on FAU and PIC assembly to enter TSMC's supply chain. Building a plant in Thailand and clearing out tenants at its headquarters to expand capacity.

• Shunsin: Broadcom's designated CPO optical module assembler, with genuine volume production experience.

• Browave: Unexpectedly landed a core role in NVIDIA's optical engine.

• xxx: Focused on FAU assembly and test equipment, targeting key process stations.

• TSMC: A decade of investment in silicon photonics processes; now the core player leading the packaging supply side.

  
  

🔍 5. The Keys to CPO's Future: Reliability, Standardization and Equipment Maturity

Even with its technical advantages, CPO still has to overcome the following bottlenecks to truly go mainstream:

1. Reliability validation cycles remain long (Broadcom's offering has yet to see large-scale deployment since launch)

2. High packaging equipment costs and demanding integration requirements

3. Customers remain highly cautious about serviceability and adoption risk

Notably, while TSMC pushes to localize the CPO module supply chain, some suppliers such as Browave, as well as foreign competitors, still hold an edge. Whether Taiwanese suppliers can break the existing landscape will depend on how quickly assembly equipment and packaging quality improve.

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1. Optical Interconnect Evolution: Trends and Challenges from Pluggables to Co-Packaged Optics (CPO)

• Pluggable optical modules

  The traditional form factor: the ASIC sends signals over the PCB to front-panel modules. The upside is easy replacement and high flexibility, plug-and-play like USB; the downside is a fixed form factor with a thermal ceiling (e.g., 40 W for coherent modules), which limits power and performance. This form factor is expected to persist until xxxx.

• OPO (On-board Optics)

  Optical components are mounted directly on the motherboard and use system cooling, but this does not solve the signal loss caused by long PCB traces. The technology was driven by xxxxx but faded after about a year. The main vendor was xxxx.

• NPO (Near-packaged Optics)

  An intermediate solution between pluggables and CPO. The optical engine sits very close to the ASIC to shorten the signal path, reduce loss, and leverage the ASIC's cooling. xxxx has demonstrated this architecture.

• CPO (Co-packaged Optics)

  The optical engine is co-packaged with the ASIC. The biggest advantage is a significant power reduction; for example, a 1.6T optical module can drop from 30 W to under 10 W. The biggest drawback is the loss of replaceability, making repairs difficult. The concept was proposed in 2019–2020, but volume production has been pushed back repeatedly from 2020, and even 2025 remains a question mark.

• OIO

  Essentially an extension of the CPO architecture with different applications. CPO is mainly used in switch systems, while OIO is applied on boards and cards such as GPUs, TPUs and XPUs.

• Market trends and forecasts (LightCounting)

  LightCounting forecasts that by 2030, pluggable modules' share of the 3.2T generation could fall to xxxx%, while CPO's share at 1.6T is only 8%, a figure that may be underestimated. CPO's real battleground will be at speeds of xxxx and above.

• AI demand for optical interconnects

  AI is the key driver of continued growth in optical communications, overturning earlier market expectations that module demand would peak in 2024–2025 and then decline. The trend remains upward, and demand for AEC (Active Electrical Cable) is growing in parallel.

• Key player moves: Broadcom vs. NVIDIA

  
  

• Supply chain and technology maturity

  
  

• TSMC's leadership in silicon photonics

  
  

2. Supply Chain Analysis of High-End Switches and Optical Components

• NVIDIA CPO supply chain

  Key suppliers include xxxxxxxx. xxxxx is mainly responsible for the FAU and shuffle parts in the OE (optical engine). This supply chain is led by Mellanox, NVIDIA's Israeli subsidiary. xxxxx is not included.

• TSMC CPO supply chain

  TSMC is the main owner of the OE. TSMC tends to nurture Taiwan's supply chain and hopes to bring xx in, but xx is not the only option and still has to compete with Chinese suppliers. xxx will not enter TSMC's supply chain, while xxx will not enter the Israeli (Mellanox) supply chain.

• FOCI's strategy and development

  
  

• NVIDIA Spectrum-X switch specs and pricing

  
  

• Broadcom CPO switch (Bailly)

  
  

• Broadcom CPO supply chain

  
  

• FAU (Fiber Array Unit) technology

  
  

• The custom silicon trend among cloud service providers (CSPs)

  
  

3. CPO (Co-Packaged Optics) Technology and Supply Chain Analysis

• CPO volume production timeline

  
  

• Light source supply chain analysis

  
  

• CW and EML laser market conditions

  
  

• Foundry

  
  

• Packaging and testing (OSATs)

  
  

• Test supply chain and equipment

  
  

• Roles of specific test equipment vendors

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4. CPO Optical Supply Chain: FAU Assembly, Test Equipment and Key Vendor Moves

• FOCI / All Ring Tech

  
  

• Chroma ATE

  
  

• MPI

  
  

• Ficontec

  
  

• Accton

  
  

• BizLink

  
  

• Lianjun

  
  

• Fabrinet

  
  

• Chung Da

  
  

• Shunsin (Shun-Sin)

  
  

• Gallant Precision (GPM)

  
  

• Luxnet

  
  

• Assembly houses

  
  

• Meta

  
  

• Hongshuo

  
  

5. The Evolution of High-Speed Copper in Data Centers: AEC Becomes the Mainstream Solution

• Copper product categories: DAC, ACC, AEC

  
  

• 800G reach comparison

  
  

• Relative cost and power comparison

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• AEC becomes the market mainstream

  
  

• Major AEC players and their business models

  
  

• Credo's market position and patent litigation

  
  

• AEC's physical advantages

  
  

• Future trends for AEC

  
  

• AOC use cases

  
  

• Thermal requirements of AEC adoption

  
  

6. Data Center Optical Technology and Supply Chain Ecosystem Analysis

• Coherent technology challenges: high power and high cost

  
  

• Market positioning of key companies (by track)

  
  

• The deep tie-up between Credo and BizLink

  
  

• Current state of the 400G coherent market

  
  

• Coherent Lite: a new technical approach

  
  

• Marvell dominates the DSP chip market

  
  

• Oracle supply chain analysis:

  
  

• 800G product adoption progress

  
  

• Factors behind AOI's operational volatility

  
  

• Tight supplier-customer lock-in

  
  

• Manufacturing challenges in the optical communications industry