CPO Set to Shine at Nvidia's GTC: Here's the Entire Supply Chain in One Chart

What exactly is CPO?

CPO (Co-Packaged Optics) integrates the optical engine, originally located in pluggable transceivers, with the host chip. This reduces the electrical signal transmission distance from tens of centimeters to tens of millimeters, makes the system use less power, carry more data, and work faster.

How does CPO change the traditional optical communication demand structure?

Compared to traditional pluggable optical modules, CPO completely or largely eliminates:

– The casing of optical modules

– MPO/LC interfaces

Parts that are retained/slightly changed/increased:

1. Lasers: Still a core component. EML lasers commonly used in optical modules are replaced by CW lasers in CPO. However, whether EML or CW lasers, main manufacturers remain companies like $Lumentum (LITE.US)$ .

2. DSP chips are retained but change form, with signal processing functions integrated into switch ASIC/optical engine EIC.

3. Silicon photonic integrated circuits: InP (Indium Phosphide) substrate is replaced by SOI (Silicon on Insulator, mainly produced by $GlobalFoundries (GFS.US)$ and $Intel (INTC.US)$ ), though InP is still used in lasers. Detectors and modulators remain largely unchanged.

NVIDIA's phased deployment in CPO:

Vera Rubin series products: Used in Quantum-X Spectrum-X (Ethernet), CPO technology is applied in Scale-out areas. Quantum-X and Spectrum-X were introduced by $NVIDIA (NVDA.US)$ at the 2025 GTC conference, with new versions possibly launching this year.

Vera Rubin Ultra and subsequent Feynman architecture: CPO is expected to be directly used in rack trays, in Scale-Up scenarios. This year's GTC conference may see NVIDIA disclose detailed Scale-Up optical interconnect solutions and supply chain ecosystems.

NVIDIA's work on CPO will make lasers and optical engines more valuable. As more optical parts are combined into single units, fewer suppliers will be needed, but the top suppliers will likely do well. NVIDIA's investment in $Lumentum (LITE.US)$ and $Coherent (COHR.US)$ shows which suppliers they might prefer in the future.

CPO supply chain in one chart

Some big names in tech are major participants and promoters of CPO technology. For example, $Broadcom (AVGO.US)$ has full-stack self-research capabilities in DSP, silicon photonic modulators, and drivers, eliminating the need to purchase core chips externally like traditional module manufacturers. Broadcom, through deep cooperation with $Taiwan Semiconductor (TSM.US)$ , uses its COUPE (Compact Universal Photonic Engine) packaging technology to solve yield issues in integrating optical engines with electrical chips.

$Marvell Technology (MRVL.US)$ mainly entered the optical interconnect field through its 2021 acquisition of Inphi, with its CPO solution closely matching its Teralynx series switch chips.

Besides Lumentum and Coherent previously covered by Mooomoo Insights, $GlobalFoundries (GFS.US)$ and $Tower Semiconductor (TSEM.US)$ hold important positions in silicon photonics foundry.

Tower Semiconductor plans to expand capacity to over 5 times that of Q4 2025 by 2027. GlobalFoundries entered the first tier of the industry by acquiring Singapore's silicon photonics company AMF last year.

Even though these two companies don't make the newest, most advanced chips, they have developed a lot of knowledge about CPO. This allows them to work on different parts of the process compared to TSMC.

Data center structural changes may cause huge growth in optical devices needs

To maximize data center utilization and efficiency, data center network architecture is shifting from traditional three-tier network architecture to leaf-spine network architecture.

The leaf-spine architecture makes data centers larger and flatter, requiring more switches and higher transmission rates between switches, as well as higher fiber coverage rates to meet the massive internal traffic flow, driving optical communication devices to upgrade to higher density and higher transmission rates. The number of high-speed optical modules and fiber optic cabling products required for leaf-spine architecture is more than 10 times that of traditional three-tier architecture.

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