Co-Packaged Optics Market

Market Overview

According to Kings Research, the global co-packaged optics market size was valued at USD 107.5 million in 2025 and is forecasted to reach USD 786.2 million by 2033, exhibiting a CAGR of 28.01% during the forecast period (2026-2033).

The market is growing with the rising deployment of Artificial Intelligence (AI), driving the demand for high-speed, energy-efficient data transmission. Additionally, advancements in integration, thermal management, and packaging are enabling compact, scalable designs for next-generation data centers and cloud infrastructure.

Major companies operating in the co-packaged optics market include Ranvous Inc., Quanta Computer Inc., Broadcom, Marvell, Molex, LLC, Furukawa Electric Co., Ltd., Lumentum Operations LLC, SENKO, Cisco Systems, Inc., NVIDIA Corporation, IBM, Huawei Technologies Co., Ltd., POET Technologies Inc., Coherent Corp., and Ciena Corporation.

Kings Research estimates that growing demand for high-bandwidth data transmission in data centers to support increasingly data-intensive workloads is driving the market. According to industry analysts, electrical interconnects struggle to meet performance requirements at scale due to signal degradation and power inefficiencies.

This demand for higher-speed, energy-efficient connectivity is driving the development of co-packaged optics in modern high-performance computing and data center environments, with companies like Broadcom and Marvell advancing their own CPO product lines and XPU architectures alongside POET Technologies, showing industry-wide traction beyond a single vendor.

These estimates come from Kings Research’s proprietary research methodology, which combines primary interviews with industry participants, secondary research from published market reports and regulatory filings, and validation against public company disclosures.

• In September 2025, POET Technologies introduced its Blazar light source for Co-Packaged Optics (CPO) and 1.6T Teralight optical engines, aimed at AI-scale-up networks and hyperscale data centers. The company’s Optical Interposer platform delivers scalable, high-bandwidth, lower-power optical solutions to address the growing connectivity demands of AI infrastructure.

Key Market Highlights

• The global co-packaged optics market size was valued at USD 107.5 million in 2025.
• The market is projected to grow at a CAGR of 28.01% from 2026 to 2033.
• North America held a market share of 35.95% in 2025, with a valuation of USD 30.4 million.
• The less than 1.6 T segment, the largest revenue-generating data rate category, garnered USD 25.4 million in revenue in 2025.
• The telecommunications segment is expected to reach USD 234.7 million by 2033.
• The Asia-Pacific market is expected to grow at a CAGR of 29.04% during the forecast period.

How are AI workloads enabling a shift from traditional interconnects to co-packaged optics?

The rising deployment of AI drives the co-packaged optics market, as it demands high-speed, energy-efficient data transmission across massive GPU clusters. Increasing AI workloads require scalable networking solutions that can support rapid data movement with minimal latency.

This growing reliance on AI infrastructure is accelerating the adoption of advanced optical interconnects in data centers and high-performance computing environments, leadingscalers and networking vendors to prioritize CPO in their next-generation infrastructure roadmaps.

• In March 2025, NVIDIA launched Spectrum-X and Quantum-X silicon photonics switches, designed to connect millions of GPUs across AI factories while significantly cutting energy use and operational expenses. These advanced networking solutions use optics with 4x fewer lasers, achieving 3.5x higher power efficiency, 63x better signal integrity, 10x greater resiliency, and 1.3x faster deployment than conventional approaches.

How do high fiber-count routing bottlenecks challenge the scalability and mass deployment of co-packaged optics?

The co-packaged optics market faces a significant challenge in the form of increasing fiber count per switch, which complicates system design and integration. The number of required fiber connections rises sharply as data center switches scale to higher bandwidths, creating space, routing, and management issues within the switch package. This complexity increases costs and limits the feasibility of compact, high-performance deployments.

Companies are developing advanced fiber management techniques, high-density optical connectors, and photonic integration solutions. Leading players like Intel, Broadcom, and Cisco are investing in modular CPO architectures and automated fiber alignment technologies to streamline integration and scalability.

• In March 2026, Corning will showcase new AI-focused fiber, cable, and connectivity solutions at OFC 2026. The innovations include multicore fiber, high-density micro cable, next-generation connectors, and co-packaged optics, which are designed to increase network capacity, simplify deployments, and support the rapid growth of AI data centers.

What technological advancements are creating new growth opportunities in the co-packaged optics market?

The co-packaged optics market is registering a trend of advancement in co-packaged optics technology. This includes a shift to higher data rates, improved integration of optical and electronic components, and enhanced packaging efficiency. Innovations in thermal management, fiber routing, and assembly processes are enabling more compact and scalable designs.

These technological improvements are helping CPO be adopted in high-performance computing environments, showing a shift toward more efficient and future-ready network architectures in data center and cloud infrastructure applications.

• In May 2025, Broadcom Inc. launched its third-generation 200G per lane (200G/lane) CPO product line, marking a major advancement in CPO technology. The company also showcased the maturity of its second-generation 100G/lane solutions, with notable enhancements in OSAT processes, thermal design, fiber routing, and yield.

Global Co-Packaged Optics Market Segmentation

Why does the less than 1.6 T segment capture the largest market share in the co-packaged optics market?

The less than 1.6 T segment earned USD 25.4 million in 2025, due to its widespread adoption in legacy systems and cost-sensitive applications requiring moderate bandwidth and lower power consumption.

Which application in the co-packaged optics market captures the maximum market share?

The telecommunications segment held 38.61% of the market in 2025, due to the increasing demand for high-speed, low-latency optical connectivity to support expanding network infrastructure and 5G deployment initiatives. 

How does the competitive landscape shape the global co-packaged optics market?

Companies operating in the co-packaged optics industry are actively pursuing strategic initiatives to strengthen their market position. Key players are engaging in mergers and acquisitions to expand technological capabilities and accelerate product development. Additionally, firms are consistently introducing next-generation CPO solutions through targeted product launches. These actions show a very competitive environment, where organizations are aligning their resources and partnerships to take advantage of new opportunities and stay leaders in advanced optical interconnect technologies for data centers and high-performance computing.

• In January 2026, Lightmatter and GUC partnered to bring commercial 3D co-packaged optics (CPO) solutions to hyperscale AI customers. The collaboration combines Lightmatter’s Passage photonic interconnect platform with GUC’s ASIC design and advanced packaging expertise, and it aims to overcome bandwidth and power limitations in AI and HPC systems while enabling greater scalability across multiple racks.

• In December 2025, FormFactor acquired Keystone Photonics to expand its silicon photonics and co-packaged optics wafer-testing capabilities. The acquisition is targeted at combining Keystone's optical probing technology with FormFactor's advanced probing and test automation expertise, thus supporting the transition of SiPh and CPO technologies from development to high-volume production.
  

Who are the key players in the co-packaged optics market?

• Broadcom
• Ciena Corporation
• Cisco Systems, Inc.
• Coherent Corp.
• Furukawa Electric Co., Ltd. 
• Huawei Technologies Co., Ltd.
• IBM
• Lumentum Operations LLC
• Marvell
• Molex, LLC
• NVIDIA Corporation
• POET Technologies Inc
• Quanta Computer Inc.
• Ranvous Inc.
• SENKO

What is the market scenario across key regions in the global co-packaged optics market?

Based on region, the market has been classified into North America, Europe, Asia-Pacific, the Middle East & Africa, and South & Central America.

The North America co-packaged optics market share was around 35.95% in 2025, with a valuation of USD 30.4 million. The market is driven by the increasing need for high-performance photonics interconnects to support next-generation computing and data center infrastructure.

The demand for optical solutions that deliver higher bandwidth, lower latency, and greater energy efficiency is growing as data traffic continues to surge, especially in applications requiring massive parallel processing.

CPO enables these capabilities by integrating optical modules with switching silicon, which leads to faster, more reliable data transmission that meets the performance and scalability requirements of modern computing environments.

• In March 2025, Ranovus partnered with Jabil to enable mass production of its ODIN optical engine for AI and data center applications. The collaboration aims to scale production and cater to the rising demand for CPO and NPO solutions in next-generation AI computing platforms, supporting broader adoption of silicon photonics as an alternative to traditional copper interconnects.

Asia-Pacific is poised to register the fastest growth rate, with a CAGR of 29.04% over the forecast period. The market growth is mainly due to the rapid expansion of hyperscale data centers in the region, as leading cloud service providers and telecom operators invest heavily in high-performance infrastructure to handle increasing data traffic from accelerating digital transformation. This surge in demand for scalable, energy-efficient, and high-bandwidth interconnect solutions is fostering the widespread adoption of CPO, thus positioning Asia-Pacific as a key contributor to the global optical communication ecosystem.

• In May 2026, Ayar Labs and Wiwynn collaborated to bring co-packaged optics (CPO) to rack-scale AI systems for hyperscale data centers. The collaboration aims to design solutions that overcome copper interconnect limitations while improving scalability, bandwidth, and energy efficiency.

Regulatory Frameworks

• In the U.S., the Federal Communications Commission (FCC) plays a key role in regulating co-packaged optics by overseeing spectrum usage, electromagnetic interference, and compliance with communication infrastructure standards.
• In India, the market is primarily regulated by the Telecommunications Engineering Center (TEC), which oversees the standards, certifications, and compliance requirements for optical communication technologies used in data centers and telecommunication infrastructure across the country.
• In Europe, the European Telecommunications Standards Institute (ETSI) plays a key role in regulating CPO by developing standards that ensure interoperability, performance, and safety across optical communication technologies.

Key Industry Developments

• In May 2025, AMD acquired Enosemi to accelerate innovation in co-packaged optics for next-generation AI systems. The integration strengthens AMD’s in-house capabilities in photonics, leveraging Enosemi’s proven expertise in high-volume photonic integrated circuit development.
• In April 2025, Sivers Semiconductors announced a strategic OEM partnership with O-Net Technologies to deliver high-performance external laser sources for CPO applications. By integrating advanced DFB laser arrays into O-Net’s external laser small form factor (ELSFP) modules, the collaboration supports next-generation switches and network components, enabling reduced power consumption and improved efficiency in data centers and AI infrastructure deploying CPO solutions.
• In January 2025, Marvell Technology announced advancements in its custom XPU architecture by integrating co-packaged optics technology. This innovation enables cloud hyperscalers to scale AI servers from tens to hundreds of XPUs across racks, achieving higher bandwidth density, longer reach, and improved latency and power efficiency. The architecture is available for next-generation custom XPU deployments.

Research Methodology

How We Gather This Information

Our methodology triangulates insights from multiple independent and publicly available research databases, which is further validated against regulatory filings and public company disclosures. All estimates are cross-verified; no single-source data is presented without validation. Data collection includes primary interviews with industry participants and secondary research from published market reports, regulatory filings, and proprietary databases, using a combined bottom-up and top-down approach and additional validation from subject matter experts before final quality review.

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