With the iteration of optical module rates, the SerDes transmission rate and power consumption of switches may become bottlenecks. The CPO (Co-packaged Optics) solution integrates optical modules into optical engines and packages them with switch ASIC chips, shortening transmission distances while reducing link loss and power consumption.
According to LightCounting, CPO shipments are expected to start with 800G and 1.6T ports, with commercialization beginning between 2024 and 2025. Volume production is anticipated between 2026 and 2027, primarily serving short-distance data communication scenarios for hyperscale cloud service providers. Global CPO port sales are projected to increase from 50,000 in 2023 to 4.5 million in 2027. By 2027, CPO ports will account for nearly 30% of total 800G and 1.6T port shipments.
Yole previously estimated that CPO would enter trial production between 2027 and 2029, with mass production starting in 2029. The iteration of AI chips is expected to accelerate the CPO industry's progress. According to Yole’s report, the CPO market generated approximately $38 million in revenue in 2022 and is projected to reach $2.6 billion by 2033, with a compound annual growth rate (CAGR) of 46% from 2022 to 2033.