Co-Packaged optics worth US$2.3bn by 2030 – report

Created December 24, 2020
News and Business

Analyst Communications Industry Researchers (CIR), has published a new report stating that the Co-Packaged Optics market (CPO) will reach around US $344 million by 2026 going on to US $2.3 billion by 2030. Although CPO is currently associated primarily with data centre transceivers operating at 800G and above, CIR sees opportunities for CPO in edge and metro networking, high-performance computing and sensors. Nonetheless, to reach these revenues, telecom and computing industry must work quickly to create new CPO products and standards.

CPO is increasingly enabling a number of high-performance applications in data and computing centres, broadband service provider networks as well as IoT. This report provides CIR’s assessment and ten-year forecasts of the new revenue opportunities for CPO with break outs by applications in the data centre, edge and metro telecom, industrial interconnects, supercomputers/high-performance computing and sensors.

The report assesses the potential of CPO in the data communications, telecommunications and IT sectors. According to the report’s author and CIR’s president Lawrence Gasman, “CPO is a new technology platform. No other technology can solve the thermal and power consumption problems of high-speed optoelectronics, while reducing form factors. CIR sees CPO as the next big thing after silicon photonics”.

Gasman added, “Going into 2021 two things are going to happen. First there will be a lot more standardization work being done, not just by the CPO collaboration and OIF — which is already in the game — but from the IEEE and some packaging industry organizations. Secondly, we expect to see 800G modules using CPO to make a commercial appearance in big data centres, with CPO-based HPC and interconnects becoming a thing.”

The report also contains a review of the organizations that are shaping the CPO sector including the Co-Packaged collaboration, OIF and other influencers. In addition, there are profiles of important companies that are actively working to develop CPO technology and products. These include Ayar Labs, Cisco, Facebook, IBM, Intel, Microsoft, POET Technologies, Rain Tree Photonics, Ranovus, Rockley Photonics, SABIC, SENKO and TE Connectivity. CIR believes that the high proportion of large public companies active in the CPO space indicate that CPO has serious and substantial backers.

According to the report, in the coming decade CPO will become a dominant enabling technology for cloud provider data centres, and will account for 63% of CPO products revenues by 2030. As the data rates for inter-machine and inter-building data communications increase beyond 400G it will be hard for traditional pluggable optics and the new on-board optics to keep up with CPO in terms of cost effectiveness. In the data centre, CPO-based optical engines and switch/optics combo are being actively developed by major equipment OEMs and large data centre user

CIR says that an area of considerable potential for CPO is in the high-speed industrial interconnect sector, where classical SerDes approaches may run out of steam over the coming decade. As high-speed interconnects become ubiquitous — in aerospace, video and military applications – the market for CPO-based interconnects may reach as high as US$450 million by 2030. However, this is an area where CPO-based products see competition from a new generation of modified SerDes with for example, no re-timers. CPO has its origins in the supercomputer/high-performance computing world and this sector continues to be a major source of technical thinking for CPO. As HPC becomes a bigger factor in the IT world as the result of new applications (AI, for example), CPO devices are likely to see new growth from HPC applications. By 2030, the market for CPO devices for use in HPC installations will be around US$170 million

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This article was written
by Peter Dykes

Peter Dykes is a independent telecoms and technology journalist who has over that last 30 years written for a wide range of B2B publications and companies. A former BT engineer, he specialises in networks and associated support systems. He is currently Editor of Optical Connections.