CPO modules worth US$5.5bn by 2027 – report

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Industry analyst firm CIR, predicts that the co-packaged optics modules market will reach US$5.5 billion in 2027, including NPO products, in its latest report Markets for Co-Packaged Optics 2023-2028.  CIR sees data centres generating US$19 plus billion revenues of aggregate spending on CPO over the 2023-2028 period.  CIR believes that there will be significant deployment of CPO in the access network reaching US$323 million in access deployments in 2027. The company says that driven by the new OIF Implementation Agreement (IA), co-packaged optics now has a much clearer adoption path within data centres.  In addition, this new interface standard created specifically for the age of latency-sensitive traffic such as that created by the current AI boom provides an additional, and crucial enabling factor.

CIR says an inflection point in the evolution of optical integration is rapidly emerging that is bringing together CPO with chiplets and a new take on silicon photonics.  This new type of optical integration does not yet have a name but differs from the approach that is based on novel materials. It adds, until recently CPO has seemed a way to protect US firms from Chinese competition in the transceiver module space.  However, the Chinese have set up their own CPO development organisation with widespread ambitions to place CPO deep in the network. At the same time a review of technical papers suggests that some of the more prominent Chinese transceiver companies have advanced plans to offer CPO products.

The report concerns itself with CPO and precursors to CPO, meaning near-packaged optics (NPO). In terms of applications, we cover all likely applications, but aside from organic traffic growth made up of voice, data and video traffic, the forecasts also reflect an expected boom for low-latency traffic and how the growth of AI (enterprise, SaaS and individual) is resetting the thinking. The market for CPO in HPC, disaggregated computing applications and sensors are also analysed and forecasted. Finally, the report considers the market impact of the emerging standards for CPO including the just-released OIF standard and the work on standards setting beginning in China.

This report updates CIR’s forecasts of the co-packaged optics modules market with breakouts by network segment application and data rate.  It also provides an update on CPO strategy from the key influencers in the market. In terms of speed, it looks at 800G and 1.6T. Another objective of the latest report includes efforts to better present the product roadmap for CPO in the near- to medium-term future. The report includes some analysis of important subsystems of CPO devices, notably the external lasers and the potential additional cooling for the CPO module. It also addresses the role of silicon photonics and the impact of optical integration on the future of CPO.

“CIR sees tremendous potential for co-packaged optics that can begin to be realised in the next two years,” says CIR’s president and the report’s author, Lawrence Gasman. “CPO provides a pathway to 1.6T and beyond.”

For more information, visit https://cir-inc.com