In recent years, there has been a noticeable trend in optical transceiver technology, moving toward bringing the transceiver closer to the ASIC. Traditionally, pluggable optics—optical modules inserted and removed from the front panel of a switch—have been located near the edge of the printed circuit board (PCB). These pluggable optics are widely used in data center networks to interconnect switches and servers. While they offer flexibility, scalability, and easy upgrades, they come with significant challenges, particularly high power consumption and limited bandwidth density.
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Future AI Architecture Predicted by IDTechEx. Source: IDTechEx report “Co-Packaged Optics (CPO) 2025-2035: Technologies, Market, and Forecasts”
To overcome these limitations, the industry is experiencing a paradigm shift. Optical transceivers are being brought closer to the ASIC, with the goal of shortening the copper channel required for electrical signal transmission. However, despite advancements in reducing the length of the copper channel, the challenges posed by deviating from the industry-standard pluggable architecture are not yet fully resolved. As a result, the industry may move directly toward more advanced solutions, like Co-Packaged Optics (CPO). In their recent Co-Packaged Optics market report, market intelligence firm IDTechEx explores the latest advancements in CPO technology, highlighting how CPO adoption will transform future data center architecture.
IDTechEx Principal Analyst Dr Yu-Han Chang, author of the report, explains: “Co-Packaged Optics (CPO) represents a significant leap in data transmission technology. CPO integrates the optical engine and the switching silicon onto the same substrate. This design eliminates the need for signals to traverse the PCB, further reducing the electrical channel path and significantly improving performance.
“CPO is set to transform interconnect architecture for AI by improving data movement, reducing bottlenecks, and allowing for higher efficiency and scalability in next-generation AI systems. The future will likely see direct optical connections, eliminating compute switches and increasing bandwidth for AI workloads, though the complexity of connections will also rise.”
IDTechEx’s report, “Co-Packaged Optics (CPO) 2025-2035: Technologies, Market, and Forecasts,” offers an extensive exploration into the latest advancements within co-packaged optics technology. To find out more about this report, including downloadable sample pages, please visit www.IDTechEx.com/CPO.
About IDTechEx
IDTechEx provides trusted independent research on emerging technologies and their markets. For more information, contact research@IDTechEx.com or visit www.IDTechEx.com.
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