OCP Global Summit 2025 | TeraHop | Optics for Scale-Up

Introduction

At OCP Global Summit 2025, TeraHop focused on one core theme: "Scale-Up Optics" — as optical links move from between racks into the GPU cluster itself.

The talk stressed that the scale and bandwidth demands of AI training and inference clusters are pushing optical applications from "Scale-Out" (across racks) to "Scale-Up" (within racks), and in the future further to "Scale-Across" (across data centers). This is the optical communications industry's next growth engine in the AI era.

Content

1. The New Frontier for Optics: From Scale-Out to Scale-Up

TeraHop noted that optical modules have traditionally been used mostly for scale-out (long-distance links between switches). But as GPU clusters expand from 64–72 GPUs in a single rack to 1,000–2,000 GPUs across cabinets, AI system bandwidth demand surges more than tenfold.

Within this range of just a few meters, optical interconnect replacing electrical signaling becomes critical —

because:

• Bandwidth demand rises sharply (10x bandwidth growth)

• Space is constrained, and higher density creates thermal and cabling pressure

• Reliability requirements are extremely high, and repairs are expensive

Therefore, TeraHop believes Scale-Up Optics will be the next main battleground for optical applications.

2. Core Requirements: Bandwidth, Density, Reliability and Cost

In this new scenario, several design principles become critical:

• Bandwidth and density: achieving higher I/O counts in limited space requires low-power, highly integrated SiPh (silicon photonics) solutions.

• Reliability: with optical modules sitting right next to the GPU/NIC and hard to service, MTBF (mean time between failures) must be far higher than that of traditional optical modules.

• Cost and power ratio: optical link cost must be commensurate with the GPU investment and must not become a burden on the overall system.

TeraHop cited field data showing that, as of this year, its SiPh platform has accumulated more than 40 billion device hours with an average failure rate below 0.1%, indicating that silicon photonics has reached commercial maturity.

3. The Evolution of Silicon Photonics and High-Density Optical Modules

TeraHop showed its latest 1.6T optical module design, built on a 5nm DSP + SiPh platform, which is already in volume production.

Within the next two years it will transition to a 200G/lane architecture and introduce:

• LPO (Linear-Drive Pluggable Optics) and LRO (Linear Receiver Optics), reducing DSP power and cost

• RTLR (Retimed Transmitter Linear Receiver) architecture, balancing power and channel stability

  Overall power is expected to fall to <10 pJ/bit, and with full LPO adoption it could drop further to below 6 pJ/bit.

On cost, TeraHop expects per-bit cost to fall from about $0.5/Gbps today to $0.1/Gbps.

This trend reflects the exponential cost decline the entire optical communications industry is achieving through volume production and packaging integration.

4. High-Capacity Pluggables Remain the Near-Term Mainstay

Although the long-term direction is Near-Packaged Optics (NPO) and Co-Packaged Optics (CPO), TeraHop emphasized that high-density pluggables remain its mainstay products.

The roadmap it presented includes:

• 1.6T → 3.2T → 12.8T pluggable optics

• Support for PAM4/PAM6/PAM8, with interoperability verified in OIF public testing

• Support for diverse transmission modes ranging from "Fast & Narrow" to "Slow & Wide"

This means pluggable modules will continue to evolve in the near term, rather than a wholesale switch to CPO.

5. Evolving Toward Near-Packaged and Co-Packaged Optics

TeraHop believes optics will ultimately transition gradually from pluggables to:

1. NPO (Near-Packaged Optics): optical modules sit adjacent to the ASIC but are not co-packaged, using short electrical connections to reduce channel loss.

2. CPO (Co-Packaged Optics): the optical engine and switch ASIC are integrated on the same substrate, forming a true opto-electronic co-design architecture.

But TeraHop also stated clearly that today's CPO market is still in a "vertically integrated trial phase," dominated by a few system players (such as Broadcom, Meta and Marvell). TeraHop called on the industry to build an "open CPO ecosystem" so that multiple suppliers can participate in co-specification, co-testing and co-manufacturing.

6. The Call for an Open Ecosystem

TeraHop emphasized that an open ecosystem is the core key to the future:

• Open socket and footprint standards are needed so NPO/CPO modules from different vendors can be interchangeable.

• The Advanced Photonics Coalition (APC) is already driving "Open CPO Standards," with 45 companies participating, in coordination with the OIF, IEEE and OCP communities.

• An open architecture allows different laser technologies (CW laser, EML, VCSEL, Micro-LED) to coexist on the same platform, letting the market — rather than closed supply chains — decide the technology direction.

Conclusion

TeraHop's talk at OCP 2025 made the point clearly:

"Scale-Up Optics is the next trillion-dollar market. CPO is not the end point but the starting point of open optical architecture."

Optical interconnect will move from between racks (Scale-Out) into GPU clusters (Scale-Up), and ultimately span multiple data centers (Scale-Across).

The maturity of silicon photonics, a declining cost curve and the establishment of an open ecosystem will allow optical links to formally replace electrical links as the data center foundation of the AI era.

Extended Perspectives

1. Technology impact

   • TeraHop's view represents the industry's new phase, shifting from "system integration" to "optical-domain computing": SiPh will no longer be just a transmission medium but part of the compute fabric.

   • The introduction of RTLR and LPO means the DSP is moving from the center to the edge, reducing latency and energy consumption.

2. Supply chain observations

   • The open CPO ecosystem TeraHop proposes directly challenges the vertically integrated models of Broadcom, Marvell and others.

   • If APC succeeds in driving Open CPO, it will redefine how optical module ODMs, foundries and packaging houses collaborate.

3. Market trends

   • Near term (2025–2026): pluggables and NPO coexist, focused on 1.6T–3.2T modules.

   • Mid term (2027–2028): CPO enters volume production and open standards take shape.

   • Long term (2030+): Scale-Up and Scale-Across converge, and data centers enter the era of "optical-domain networking."